Tyler has learned that the Bank of England is following a revolutionary new approach to monetary policy. According to a top secret Bank report, it works by exploiting "the expansion of space-time as a consequence of the vacuum ground-state of higher dimensional graviton fluctuations" (see key formula above).
As you will know, this is the approach long envisaged in sci-fi, most famously in the warp drive that powered the Starship Enterprise. But never before has a central bank had the sheer dilithium balls to fire it up for real. The Bank is boldly going.
So how's it working out?
Today we got an update. According to the Bank, we're rapidly winding up to warp speed, and from its current slump, GDP is about to make the jump to hyperspace:
Growth will be so strong, that we'll have recovered our entire output fall within two years. It will be the fastest strongest recovery we have ever had from any slump.
And it's all thanks to the warp drive's combination of zero interest rates and a roaring printing press.
Unfortunately, at this speed, the old ship is beginning to vibrate rather alarmingly.
For one thing, the exchange rate is down 25% since we first hit the asteroid belt back in 2007 (ERI = Exchange Rate Index - sterling's value against a basket of currencies):
That's one helluva fall, and it's made us all poorer because it has increased the price of imports. Which also means upward pressure on inflation.
And surprise surprise, the Bank is now warning that inflation itself is set to increase:
Which sounds pretty worrying. Although the Bank reckons it's nothing to worry about, and inflation will subsequently come right back down again later:"Inflation is likely to rise sharply to above the 2% target in the near term, reflecting higher petrol price inflation and the reversal of last year’s reduction in VAT."
Do you believe that? Do you believe it any more than you believed all those dire forecasts of falling prices/deflation?
The fact is that this warp drive technology remains highly experimental and very scary. The various captains up on the bridge may believe they can control it. But down here in the crew quarters we're not at all convinced the ship can take it.
We do not want to perish in an inflationary black hole. And now that the Bank reckons we're back on track for growth, we think it's time to disengage the warp drive, and go back to good old fashioned propellor power.