If you didn’t watch or read the news, the vast majority of us would barely notice anything was wrong with the country’s finances. The shops are open, wages arrive, the pubs are full. The only giveaway is that the weekly shop stings a bit more than it used to. But tune into the headlines and you’d think the sky had fallen in because inflation went up a smidgin last month. Cue the screaming, the frothing pundits, the graphs with angry red arrows. Thank heavens, the newsrooms sigh with relief, they’ve found something to pad out the void between celebrity scandals and football transfers.
The Bank of England’s target is two per cent. Not 2.000 per cent carved in stone, not 2.1 per cent on Tuesdays and 1.9 per cent on Thursdays – just a broad anchor that says “somewhere around here is fine.” Everyone who actually understands monetary policy knows a bit of drift is normal. Energy spikes, harvests fail, some lunatic starts a war – inflation wobbles. That’s life.
Try telling that to the press, though. They’ve turned each CPI release into a horse race. A tenth of a point up and it’s the end of civilisation. A tenth down and we’re all dancing in the streets. It’s absurd. Real volatility was the 1970s, when inflation roared past 20 per cent, or the ERM fiasco, when interest rates jumped like kangaroos on amphetamines. Today’s fluctuations are a tea-cup ripple by comparison.
But context doesn’t sell papers. You can’t whip up panic out of “perfectly normal quarterly drift within historical averages.” You need doom, drama, and preferably a chart pointing upwards in blood red. The media has become the nation’s economic hypochondriac, checking the pulse every ten seconds and crying “heart attack” whenever it skips a beat.
If we had any sense, we’d switch off the noise and look at the long term. But then, where would the hysteria merchants be without their decimal-point dramas? Certainly not on the front page.
Try telling that to the press, though. They’ve turned each CPI release into a horse race. A tenth of a point up and it’s the end of civilisation. A tenth down and we’re all dancing in the streets. It’s absurd. Real volatility was the 1970s, when inflation roared past 20 per cent, or the ERM fiasco, when interest rates jumped like kangaroos on amphetamines. Today’s fluctuations are a tea-cup ripple by comparison.
But context doesn’t sell papers. You can’t whip up panic out of “perfectly normal quarterly drift within historical averages.” You need doom, drama, and preferably a chart pointing upwards in blood red. The media has become the nation’s economic hypochondriac, checking the pulse every ten seconds and crying “heart attack” whenever it skips a beat.
If we had any sense, we’d switch off the noise and look at the long term. But then, where would the hysteria merchants be without their decimal-point dramas? Certainly not on the front page.
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