Liberal Burblings

A long time ago, when I had hair and my student grant was sufficient to fund a sumptuous lifestyle in the Union Bar, I dabbled in a bit of economics. I vaguely remember something about M1 and M2, and the increase of the money supply causing inflation.

So I did wonder if injecting an extra £25 billion (or is it £50 billion?) into the “money supply” via Northern Rock might not do an awful lot of good for the inflation rate.

It is nice to finally find someone in print speculating on the same subject. Simon Hoggart in his Diary today says, while commenting on the police pay situation:

As for inflationary pressure, what on earth is Northern Rock going to create?

Mind you, presumably £25 billion is peanuts in the scheme of things (e.g government expenditure of £600 billion-odd annually).

I welcome input from someone who knows what they are talking about on this subject. There usually seems to be someone with a PhD in most subjects floating around.

Related posts:

1. 2 days to go to Northern Ireland deadline
2. March 26th – another final Northern Irish deadline which will be broken?
3. Historic day for Northern Ireland
4. Another delay in Northern Ireland?
5. Northern Ireland Secretary offer to Ashdown – Only a cretin would take this seriously