Gordon Clown .Com

The Confederation of British Industry has said today that the number of manufacturers intending to raise their factory gate prices soon has hit the highest level for 12 years.  This is the latest in a sequence of events demonstrating that inflation is back with a vengence, and that suppliers and retailers have rediscovered their pricing power.  With commodity prices and food ingredients prices soaring, price rises at supermarkets look set to continue for the forseeable future.  The collective coma surrounding oil depletion has led to soaring biofuel demand causing food prices to shoot up, a situation that is not likely to be reversed easily or soon.  Pricing power has returned to supermarkets who are seeking to rebuild profits following the energy price shocks of 12-18 months ago, and in view of the likely future ramp up in food costs.  Gordon and the MPC should be very worried indeed about this.  King has already linked climate change to an increase in biofuel demand and hence food price inflation - this is not an issue that is going to go away soon.

The CBI’s Industrial Trends survey showed that 32pc of manufacturers expect product prices to rise, compared with 8pc thinking that they will fall. The resulting rounded balance of +25pc was the highest since March 1995.

It came as oil prices hit a nine-month high of $72 a barrel, fuelling fears that higher petrol prices and transport costs could generate further jumps in inflation.

Brent crude was up $1.10 at $71.70 a barrel in late trading, lifted by concerns about the potential for military action against Iran, and strikes by state oil workers in Nigeria.

With mounting evidence that worldwide oil supply is near to peaking, or may indeed have already peaked, the long term trend in oil prices from here forwards is likely to be up, and up fairly quickly.  Oil is vital for everything the world economy does, so the price of all goods and services is likely to be affected.  There is no easy way out of this one.

Howard Archer, chief UK and European economist at Global Insight, said: “The CBI survey adds to the pressure on the Bank of England to lift interest rates by a further 25 basis points to 5.75pc sooner rather than later, and a back-to-back [increase] in June is currently looking like a real possibility. Furthermore, there is an ever-growing danger that interest rates will reach 6pc before the end of the year.”

George Osborne, the shadow chancellor, said: “It’s official: Gordon Brown is leaving the Treasury with the public finances in the worst state in Western Europe. You have to be truly incompetent to combine the highest taxes in our history with a budget deficit higher even than Italy’s.”

While problems on the world stage can take some of the blame, the MPC and Gordon Brown must shoulder the greater share.  Inflation is a problem for the US and Europe too, but it seems to be affecting the UK worse than most - our food price infltaion is far higher than the eurozone.  Perhaps it’s because the British economy is built on debt, with enormous monetary growth needed to keep everything ticking along.  Until it all goes wrong, of course.

Gordon Brown is set to face a major headache just as he takes over as leader of the Labour party, an event that now looks to be mere weeks away.  It has recently transpired that Labour, who have long been running close to the wire in financial terms as witnessed by the various loans for peerages scandals that have come to light in recent years, are £5m in the hole for party funding.  When installed in office around the beginning of July, Gordon will have to go cap-in-hand to any and all who may cough up to keep Labour from going bankrupt.

Tony Blair has screwed Gordon again, somewhat, as it appears that a few rather sizeable loans taken out during his time are due for repayment very soon after Gordon takes over, and with the good favour of Tony amongst the wealthy a thing of the past, it now appears that those loans are likely to be called in.  The scale of the Labour party’s debts are staggering, and perhaps only outdone by the massive debt that Gordon has put the country in during his 10 years as chancellor.

On 13 September, Lord Sainsbury, the former science minister, is expecting £2 million to be returned.

On 30 September, £1 million is due to Nigel Morris, co-founder of Capital One Financial Corporation, and £400,000 should go to businessman Derek Tullett.

Sir Gulam Noon, the Indian food tycoon, is due to have £250,000 repaid on 30 October.

Another £1 million is owed to developer Barry Townsley in April, and two loans of £500,000 each from former Capita boss Rod Aldridge are due in autumn 2008.

The loans were taken out on Mr Blair’s orders during a panic over funding for the 2005 election. A police inquiry is thought to have recommended charges be brought over allegations that some of Mr Blair’s officials dangled honours, including peerages in front of wealthy backers.

Labour also owes £2 million to fashion magnate Richard Caring for a loan taken out last year and repayable next February.

Channel 4’s Dispatches programme tonight examined some of the personality traits that Gordon is said to exhibit behind closed doors that may betray his unfit state to govern the country.  Chief among these was his propensity to only listen to a very small group of so-called “trusted advisors”, those from the past such as Geoffrey Robinson and Charlie Whelan, both now fairly disgraced, and present advisors such as Ed Balls.  Brown was portrayed in the programme as a control freak whose treatment of other ministers and colleagues ranges from ignoring them to bullying them and worse.

“I’ve been a political journalist for fifteen years and have closely followed the career of Gordon Brown. I have written pieces that both criticize and praise the Chancellor but one thing is unarguable - he is a massive politician of exceptional gifts, the kind of figure that comes along once in a generation - and in a few weeks time he’ll be Prime Minister. And yet some very senior figures on his own side are certain he is unfit for office - one has called him a ‘control freak’, another ‘psychologically flawed’ and one serving cabinet minister has said he’d be a ‘f***ing disaster’,” says Peter Oborne.

Again and again examples are given of how Brown snubbed, cut, bullied, ignored and ploughed his own furrow. Even friends acknowledge the problem. The film examines a double allegation of a refusal to collaborate with his colleagues allied to vindictiveness against those who threaten to stand in his way. These character traits have mainly been concealed from the public but they have shown themselves in a series of feuds, particularly with potential challengers; for example his clashes with Robin Cook, Mo Mowlam, Peter Mandelson and Alan Milburn.

Brown’s relationship with Blair is also put under scrutiny. Brown arrived at 11 Downing Street still believing he should be the man in No.10. He’d been given by Blair unprecedented authority over economic and domestic policy. Brown has interpreted this as a licence to defy No. 10.

Numerous and authoritative accounts of Brown’s behaviour in government, the sulks and surliness, refusal to co-operate - according to one extremely well-placed insider he even stormed into No 10 and hurled obscenities at Tony Blair - paint a very different picture from the warm man loved by his friends.

In conclusion Peter says, “Gordon Brown is going to be the next Prime Minister. It’s important for all of us - except perhaps the Conservative opposition - that he should be a success. But we’re taking a giant leap in the dark. Gordon Brown is a brilliant man, capable of great warmth and human decency - but he’s also very closed, clannish, suspicious, tormented and very difficult to deal with. The success of his premiership depends on whether, when he attains his lifetime ambition and enters No.10 Downing Street, he can become a changed character.”

Only time will tell whether Gordon genuinely can change his character and reverse the clear flaws which have been demonstrated by his time in Number 11.  The odds don’t look good.

The newspapers today are reporting that Gordon has admitted his mistakes in an aim to make a clean break with the Blair years.  These mistakes he has specifically admitted to are as follows:

• Some mistakes made in Iraq
• Some mistakes over ID Cards
• The culture of celebrity

Cunningly, none of these mistakes could be directly pinned on Gordon and for most of them, Blair is more to blame.  Although quite who can take the blame for the “culture of celebrity” is anyones guess.  Gordon, of course, failed to admit his more numerous and gross errors as Chancellor, preffering to brush the following under the carpet:

• Inflating enormous debt bubble
• Destroying pension schemes
• Massive PFI off-balance-sheet debts
• Massively increasing tax burden through fiscal drag
• Selling Gold reserves just before Gold tripled in value
• Creating the biggest trade defecit in 10 years
• Pricing hundreds of thousands of people out of owning their own home
• Nose picking
• etc

Conveniently the above mistakes were not mentioned.  Over the coming months and years, as the long term effects of these blunders become progressively clearer.

Peter Spencer of the Ernst and Young ITEM Club economic think-tank has characterised the UK consumer as being addicted to credit, according to the latest ITEM club report.  The report says that while the outlook for growth remains reasonably good, most of that growth is likely to be based on borrowing, as consumers follow Gordon’s lead and steal from their future to pay for current consumption.  That has created a country that is complacent about risk, and an economy that is skating on thin ice.

“Many people are following the Chancellor’s lead and are borrowing to finance consumption.”

“Both as individuals and as a country we have borrowed a huge amount to support this growth,” Mr Spencer said.

“The bottom line is that we are all living beyond our means. In the short term, Mr Brown has resorted to borrowing for consumption. If the Chancellor is forced to borrow so much when the economy’s so sweet, what will happen when it turns sour?”

The report highlights the fact that the current account deficit has ballooned, despite a healthy economy and robust tax revenues. Government borrowing is higher than forecast, with overall public sector net borrowing now expected to be £34bn in 2007 to 2008, up from the £31bn projected in the pre-Budget report.

Mr Spencer said: “The UK’s current deficit has reached 3.5pc of GDP which suggests that as a country we are close to the edge. Ultimately, we are all skating - not to say wobbling - on thin ice. There’s a danger that we are slithering into complacency.”

“The current benign macroeconomic environment has made both individuals and corporates overly relaxed about risk, inflating asset values and transactions and boosting borrowing and spending,” it reads.

“Homeowners have been under pressure from rising tax and utility bills but all the indications are that they have kept spending as if it was going out of fashion. The saving ratio [the proportion of income people save] has fallen back to just 3.7pc meaning that many households are borrowing to finance current spending.

“Lenders have relaxed their criteria and we have been gearing up accordingly.

“The US sub-prime market, which now threatens to contaminate the rest of the mortgage market, provides a clear warning of what can happen when lending criteria become too lax.”

Growth in the UK economy was driven by the business and financial services sector. The report said the strength of the business sector was reflected in industrial confidence, mergers and acquisitions, fixed investment and employment.

“It also underpins the high value of the stock market and low level of corporate yield spreads, lowering the cost of capital and providing further impetus to M&A and business investment.”

However, the ITEM Club expresses grave concerns over long-term risks to the economy: “A major threat is building up in financial market gearing, asset valuations and overconfidence.

” These markets can turn on a sixpence. The relentless upward march of prices leaves them prone to relatively minor shocks, as we saw in February. Moreover, the burgeoning current account deficit leaves the UK prone to currency weakness.

“The problem is that if asset prices do not stabilise this will leave the UK, with its heavy dependence upon financial markets, vulnerable to a crash.”

Over recent weeks we have seen a growing realisation amongst journalists and newspaper editors that Brown’s economic miracle is not all that he has promised, and that he is likely to leave a trail of destruction in his wake as his desperate gambles with the British economy begin to unravel over the coming few years.  The group was joined today by Larry Elliot in the Guardian who believes that Brown’s single achievement and selling point for his stay as Prime Minister, the economy, is not the “inflation proof show-stopper” that has been claimed.

Britain has become a giant offshore hedge fund in which the viability of the balance of payments depends on the City’s ability to gamble more successfully than its counterparts in Frankfurt, Tokyo and New York, and where an excess of cheap money has allowed consumers to feed their spending habit, either directly through their credit cards or by using their homes as cash machines. The result is an economy in which the financial sector is the main source of growth, and which is even more heavily skewed towards the south-east of England than when Labour came to power. The gap between rich and poor is growing too.

In his budget speech last month, Brown boasted that inflation since 1997 had averaged 1.5% during his stewardship of the economy, half the level of the previous decade. This week’s figures showed it running at 3.1%, and that’s using the yardstick for assessing the cost of living - the consumer prices index - that is most favourable to the government. Until 2003, Brown used the retail prices index excluding mortgage interest payments, and on that basis inflation is running at 3.9%. Indeed, had the chancellor stuck to his old measure, King would have had to use his fountain pen in three of the past four months.

Using the all-items RPI, still the preferred benchmark for pay negotiations, prices are 4.8% higher than they were 12 months ago. That has left the City convinced that interest rates will be raised by the Bank of England next month and that further increases may be necessary later in the year.

Brown would say that, even if interest rates were to rise to 6%, that would still leave them where they were when Labour came to power. The problem is, though, that Britain is now so heavily in debt that even quite small increases in borrowing costs could hurt. They will certainly affect political sentiment, not least because it’s a good bet that quite a few voters would themselves secretly admit that spending more than you are earning - be it at a personal or a national level - is unsustainable.

In the past, periods of excess have been followed by king-sized hangovers, and we may be in for some pain this time as well. Brown is reluctant to talk down the pound, which would be one way of boosting exports, and a different mix of monetary and fiscal policy - higher taxes to dampen down consumption, offset by lower interest rates and a lower pound - is a political non-starter at the present juncture, given the scale of the increase that would be needed.

New Labour is ideologically opposed to more innovative ideas, such as a two-tier system of interest rates that would discriminate between money borrowed for investment and that used for speculation. Nor has it done more than dabble with the idea that there needs to be radical reform of land and property taxation in the UK to keep the housing market in check. Having been blamed, unfairly, for single-handedly destroying pensions, Brown is hardly likely to lay himself open to the charge that he wants to do the same to property.

A decade ago, a more activist industrial strategy - perhaps giving support to Britain’s fledgling biotech and environmental industry, as provided by competitor countries for their high-growth sectors - might have helped rebalance the economy, but it’s a bit late now.

Instead, Brown’s arrival in power will coincide with an economic slowdown of one sort or another. Either the chancellor will be successful in his attempt to put the squeeze on pay, in which case below-inflation wage deals will lead to falling real incomes, or deals will be struck at about the current RPI inflation rate, in which case the Bank will have kittens at the prospect of a wage-price spiral and keep on raising interest rates until higher unemployment drives the message home. A good way to overturn a 15-point opinion poll deficit? I wouldn’t bank on it.

The Daily Express has the pick of the bad news stories for Gordon today, with its frontpage headline suggesting that inflation could lead to base rate rises up to 6%, and consequently larger mortgage bills for homedebtors.  They also include a rather telling comment about Gordon’s handwriting, based on the signature in his letter to Mervyn King.

CRIPPLING rises in mortgage bills were forecast as “certain” last night after a shock leap in inflation.

Economists tipped the base rate to rocket over the 6 per cent mark, leading to eye-watering hikes in repayments for millions of home owners.

And the mortgage misery spelled humiliation for Chancellor Gordon Brown as the Bank of England took the unprecedented step of formally warning him that prices are running out of control.

Households now face punishing interest rate rises on top of spiralling costs for fuel and consumer goods as well as the biggest tax burden in history.

A quarter-point jump to 5.5 per cent will see payments on a £100,000 mortgage rise from £722.80 to £738.99.

But if interest rates peak at six per cent as predicted by some economists, the monthly payment will soar to £771.82 – an increase of almost £50 a month. Owners paying off a £200,000 home loan – the average price of a three-bedroom semi – will have to find an extra £1,176 a year.

At the same time there is the prospect of a summer of discontent, with huge pay de­mands by unions expected to keep wages in line with rising prices. Eco­nomist Phil Shaw, of international banking group Investec Securities, said: “The inflation figures make an interest rate rise a certainty, along with the possibility of another rate rise
bey­ond that.”

Figures due to be released today from the Office of National Statis­tics showed that inflation hit 3.1 per cent last month, way above the Treas­ury’s 2 per cent target.

The rise in the Consumer Prices Index – which does not include home loans – was up from 2.8 per cent in February.

The news sent shockwaves through global money markets, with the pound briefly passing over the two-dollar mark.

In exceeding the target by a full percentage point, the inflation rise reached the level where Bank of England Governor Mervyn King is obliged to provide the Chancellor with a written explanation.

It was the first time Mr Brown has faced such a letter. In it, Mr King warned that the Bank will almost certainly hike interest rates next month from 5.25 per cent.

He said: “The Monetary Policy Committee remains determined to set interest rates at the level required to bring inflation back to the two per cent target.” This was likely to have that effect on inflation “within a matter of months”.

He blamed an “unexpectedly sharp increase in energy prices” which had offset a fall in petrol prices, and he highlighted rises in food prices caused by global weather conditions hitting production.

Firms were also raising prices of consumer goods in response to “robust” spending by shoppers. “Furniture and furnishings rose by almost 10 per cent in March, a record rise,” his letter said.

Both the Chancellor and Tony Blair tried to shrug off the inflation nightmare yesterday. In his reply to Mr King, Mr Brown wrote: “Inflationary pressures have been a feature of the major industrial countries in recent times.”

Effectively backing further interest rate rises, he added: “I agree that the Monetary Policy Committee’s approach is appropriate to the Government’s monetary policy objectives, namely to maintain price stability.” Meanwhile, Mr Blair told his monthly Downing Street press conference: “There’s tremendous pressure on families all the time. I think it’s a feature of today’s world that people are stretched.” And he risked ridicule by claiming that Mr Brown was “the best Chancellor since the Second World War”.

Shadow Chancellor George Osborne said: “Gordon Brown’s reputation for economic competence is unravelling before our eyes.” Lib Dem Treasury spokesman Vince Cable said interest rate rises “will cause misery for thousands of people in severe debt who have borrowed up to the hilt to secure a mortgage. Debt servicing problems will only get worse.”

Howard Archer, economist at Global Insight, said: “This is a thoroughly nasty set of data that essentially guarantees that the Bank of England will raise interest rates.”

Graeme Leach, chief economist at the Institute of Directors, said: “The case for a further quarter-point rise cannot be in doubt. It looks like a done deal.” Louise Cuming, head of mortgages at moneysupermarket.com, said the increase had taken the City by surprise.

It threatened those trying to get on the property ladder. “If we don’t get new buyers into the market, the market will stagnate,” she added.

Tony Woodley, general secretary of the Transport and General Workers Union, said: “Employers had better get used to the idea that our pay claims this year are aimed at winning workplace victories on pay so that workers can afford to meet their rising living costs.”

Mr Brown’s reply to the Bank of England interested handwriting experts. Erik Rees, of the British Institute of Graphologists, said: “This is the handwriting of a man whose statements you have to check and check again. The fact the word sincerely is virtually illegible is very apt.”

The pain continues for Gordon today as readers of the Telegraph are asked to comment on how the Great Pension Robbery Of 1997 will affect them.  The sentiment is clear for all to see, and it’s not pretty.  It must be plain to all but the most backward members of the general public now that Brown has created a crisis waiting to happen by raiding our future to pay for his.  The Labour Party will surely soon realise Gordon is a lame duck candidate and a non-starter as Labour leader and Prime Minister.  Who knows what damage he could do if he ever makes it as far as nextdoor?

Some of the comments by Telegraph readers are shown below to give an impression of just how anti-Gordon the public is becoming:

Mr Brown should face criminal charges for stealing £100bn of pension funds from us over the last 10 years.
He is a duplicitous serial offender from whom we have no protection.

…

I am age 68 and it looks as if I will need to work to age 75 in order to erase the damage made to my pension by Mr Brown, I ask the people of England, do we want this man in charge of us ?. I think not.

…

The RECENT REVELATIONS with the release of the ’suppressed’ treasury documents show just how completely Gordon Brown is unfit for high office. I had always assumed that his disasterous decision to abolish the tax relief on pension fund investments was due to incompetence. Now I realise just how callous the man is. Along with millions of others my pension fund will be worth at best half of what I had expected when originally planning my retirement. The number of families destined to have a much poorer quality of life in retirement can directly lay the blame on one person. Adding ’salt’ to the wound is the realisation that his generous pension postion is not only ‘ringfenced’ but will be paid for by his many victims.

…

This is a disgrace. He ignored advice and has ruined, or will be responsible for the ruin, of the lives of nearly everyone in the country except for foreign immigrants. In better times this would have been a resignation issue. I expect we wont even get an apology. Blame the CBI? Like all New Labour they blame everyone but themselves and take responsibility for nothing.

The above are just a handful of the 250 comments that the Telegraph website has received on this issue at the time of writing, universally condeming Gordon Brown for his out-and-out theivery.

Gordon’s forecasts in his past budgets have been exposed as a sham today, the lies laid bare for all to see by Liam Halligan.  Gordon has borrowed from the future simply to buy his way into Number 10, and seeming has got away with it so far.  But the true cost will only become clear several years after he has departed from the Treasury.

I worry that the Chancellor is heavily relying on our “future” to secure his “future”. He is chalking up massive, multi-billion-pound liabilities, the vast majority of them hidden from the national accounts, which taxpayers will have to meet only once Brown has disappeared from the political scene, his prime ministerial ambitions fulfilled.

In 2003, when we went into deficit, the Chancellor said we would be out of the red by 2004. When 2004 arrived, and the deficit had deepened, he said a surplus would be achieved, instead, by 2006. Well, here in 2007, we are still in deficit. And - surprise, surprise - Brown again predicts a swift turnaround.

This Chancellor often declares that he has “proved independent forecasters wrong”. It is true that the economy has grown quite strongly in recent years - and often by more than non-Treasury economists have predicted.

When growth is stronger than expected, though, tax receipts should be higher and spending lower, meaning that Brown’s fiscal forecasts should also be better than expected. But in each of the past seven years the Chancellor has ended up with a bigger-than-forecast fiscal hole - meaning higher borrowing too.

In this year’s Budget, Brown said he would need to borrow £118bn between 2007/08 and 2010/11. In his 2006 budget, he forecast borrowing of only £102bn during the same period.

So, in a single year, Brown has quietly increased taxpayers’ future liabilities by £16bn. Paying that off will cost us the equivalent of an extra penny on income tax over the four years during which the extra borrowing will take place.

Peer into Brown’s “off-balance-sheet” liabilities and the numbers get scarier still. Chief among these is the future bill for the final salary pensions of state workers.

The Chancellor’s public sector recruitment campaign means the eventual cost of these pensions - all of which will be met by taxpayers - has ballooned in recent years. The latest official figures, relating to March 2005, put the bill at £530bn - bigger than the entire national debt.

Given all those extra state workers, such pension costs reached an estimated £640bn in 2006 and £685bn today. So again, Brown has jacked up taxpayers’ liabilities over the last year - this time by £45bn.

Then there is the controversial Private Finance Initiative - much of which, again, is not on the Government’s books. Brown has approved a slew of new PFI deals over the past 12 months, increasing our future liabilities by no less than £24bn.

So, a chancellor who last month claimed - amid much fanfare - that his fiscal rules had “once again been met” has, in one year, added a total of at least £85bn to the bill we taxpayers face.

In recent years, Brown has used our money in a crude attempt to spend his way to popularity. In my view, it is a popularity he will never achieve - not least because he consistently tries to fool us.

He tells us a tax rise is a tax cut. He tells us a deficit is a surplus. The British public are not stupid. Yet, as his final Budget shows, this Chancellor treats us as such.

Lies upon lies from Gordon, year after year.  And yet it seems some people still believe he is a prudent chancellor and a viable option for future prime minister!  But as we have seen recently, it seems that none of Gordons lies can remain uncovered forever.

Seems like Gordon has finally relented and allowed the truth to be known on this one! Incredible really as just a few days ago he was claiming Britain had the strongest economy in years!

In a statement today, the Chancellor admitted that he had “put pressure” on the Monetary Policy Committee to keep interest rates artificially low in order to maintain his popularity as chancellor. Gordon Brown, who delivered his 11th budget speech recently, said that this was the only way to avoid sending the country into recession and causing precipitous falls in asset markets, including housing. The plan was to “fuel consumer spending”, Mr Brown said, with low interest rates encouraging people to “flock to the high streets of Britain in order to save the economy”.

Nice one Gordon! Get us all into massive amounts of debt, the likes of which have never been seen before, then run off to become Prime Minister just before the real pain starts to hit! Brilliant idea.

“I have now realised that while this plan was successful in the short term, it could lead to greater problems further down the line as debt increases. I will now make it my mission as Chancellor and perhaps soon Prime Minister to address this problem and get Britain back to its once great status as a stable thriving economy built on sustainable and sound fundamentals.”

Good luck Gordon. Because if the results of this come about soon, you won’t be spending much more time in Downing Street!

Update: April fool!

Much as Gordon hates it, the MPC’s desperate flapping attempts to keep runaway inflation under control seem likely to lead to another interest rate rise, possibly as early as next week.  Swervin’ Mervyn King has commented that the rocketing money supply of 14% per year might - just might - be a sign that inflation is out of control.  Indeed with RPI already at 4.6% it’s hard to find anyone else who might have missed this fact - aside from Gordon of course. 

Desperate to keep rates down and voters happy, Gordon will no doubt attempt once again to knobble the MPC and fiddle the CPI figures for the umpteenth time.  The Office for National Statistics recently upgraded the weighting of fuel and oil in the CPI basket, a cunning move as with Oil prices currently lower than this time last year, they would at their current price be contributing to bringing CPI down from the current sky high 2.8%.  No sooner had they done this, however, when Iran stepped in and grabbed 15 Brits, which has helped push oil back up a few dollars per barrel.  And if the situation doesn’t get sorted soon, the price may rise yet more, and Brown and the ONS could be laughing on the other side of their faces.

Here’s what Merv had to say about M4:

Mr King said policymakers should ignore the recent increase in money floating around the UK financial system at their peril, saying it indicated that inflation would soon rise.
 
His comments, to the Commons Treasury Select Committee yesterday, underlined expectations that the Monetary Policy Committee is prepared to lift borrowing costs to 5.5pc either next month or in May.

Mr King said: “I’m more concerned with monetary aggregates than some of my colleagues. To ignore it as a potential influence could lead into tricky territory.”

“My concern about the money numbers is whether they are telling us something about the inflation numbers not in two years but in maybe three to five years. To ignore it as a potential medium-term influence could lead into potentially tricky territory.”