The Bank of England monetary policy committee surprised the City in January with an increase in interest rates. If inflation reaches a percentage point above (or below) the target rate of 2 per cent a year, the governor of the bank is obliged to write a letter to the chancellor explaining why the committee has failed. And prices are going up faster than 2 per cent a year, hence the rise in rates to try to keep inflation in check. But which prices are going up, and in which sectors of the economy? Certainly not in retail sales, the products people buy in the shops. The average price of retail sales has fallen in every year since 1999. The average price in 2006 was 4.7 per cent lower than when Labour came to power in 1997, and virtually the same as in 1994, over a decade ago. Of course, in part the average price measures shifts in spending by consumers towards cheaper products as well as genuine price falls for the same product, but inflation in the shops has still been negative.
Prices are steaming ahead in those parts of the economy where competitive forces are weak or non-existent. For example, over one quarter of council tax bills now go not on services to the public, but on the gold-plated pensions of council officials. And council tax increases, backed by the force of law, proceed apace. Many of the former nationalised industry sectors—energy and transport—also feel few constraints in raising prices, as the rail fare increases in early January show.
Shane Warne's failure
The debacle of the Ashes has come and gone. But things could have been even worse for England in recent years if Shane Warne had been less dedicated to the good life off the field. As a batsman, he notched up 3,154 runs in test cricket, by some margin the highest total in history that does not include a century. Warne made 12 scores of 50 or more, but never got to 100. He does of course hold the record for the highest number of wickets taken in test cricket: no fewer than 708. Only four other bowlers have even taken more than 500; Warne's main rival, Muttiah Muralitharan of Sri Lanka, is on 674. Yet in terms of runs conceded per wicket taken, Warne is not even in the top 50 test bowlers of all time, unlike his teammate Glenn McGrath and Muralitharan. McGrath also appears in the top 50 by strike rate—the average number of balls delivered per wicket taken—and Warne does not. Many of the all-time bests in terms of runs conceded and strike rates were set 100 years ago by English bowlers slaughtering weak opposition on rain-affected pitches. So perhaps McGrath, with a career total of 563 wickets, has a good case to be considered the greater of these two great contemporary Australian bowlers.
