The Old Lady’s blind spot
Julian Jessop
The Spectator
The failure to discuss growth in the money supply when talking about inflation is “worrying”, says Julian Jessop. “Changes in the supply of money are key to understanding what has happened to inflation – and where it might be heading.” The latest figures show that the annual growth of M4ex (cash, sterling deposits and short-dated bonds held by households and non-financial companies) has “slowed to zero”. With no extra money circulating, inflation should lower further.
