Tuesday, September 16, 2008

Unit 2: Inflation rises to 4.7% so why doesn't the BoE respond by using Monetary Policy?

From the BBC comes this clip and article about why inflation continues to rise and what the BoE is doing to try and return it to it's target of 2%


Two other BBC video clips are at


This Ch4 video identifies another key reason for inflation, the fall in the value of the £


a) Explain what sort of inflation the UK seems to be suffering
b) What are the main reasons given for the rise in inflation?
c) Using the table at the bottom, explain how some prices can be falling if inflation is rising
d) How does the falling £ push up inflation (CH4 video)
e) To what extent do you think the BoE is capable of reducing the current inflation rate?

Want to calculate your own inflation rate? You can do it via the ONS calculator at


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