U.K. Prime Minister David Cameron said recent levels of inflation have been “concerning” as he offered Bank of England Governor Mervyn King his support in the “extremely difficult task” of setting interest rates.
“That is what the Bank of England have to get right,” Cameron told the BBC’s “Andrew Marr Show” yesterday. “I’m in no doubt the inflation is extremely harmful, it destroys people’s savings. We don’t want to go back to having an inflation problem as we had in the past.”
King and the other members of the central bank’s Monetary Policy Committee take their first rate decision of 2011 on Jan. 13, with all 61 economists surveyed last week expecting them to keep rates at 0.5 percent. While inflation was above the government’s 3 percent limit in November for a ninth month, the MPC has to balance that against the likely economic effects of government plans to implement the biggest budget squeeze since World War II.
Cameron, who acknowledged yesterday that this will be “a difficult year,” is looking to the private sector to lead recovery, and today will meet executives from companies including Wal-Mart Stores Inc.’s Asda unit, John Lewis, William Morrison Supermarkets Plc, J Sainsbury Plc and Centrica Plc to discuss their plans to create around 40,000 jobs this year.
Continue reading - Bloomberg - Cameron Warns Governor King Has `Extremely Difficult Task' on U.K. Rates
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