Meanwhile, with B&B entering the financial intensive care unit, former Monetary Policy Committee (MPC) member Willem Buiter is calling for a rise in base rates. Buiter, a professor at the London School of Economics (LSE), believes the threat of inflation is a real danger to the long term health of the economy. He doesn't go as far as me in suggesting that the attempts to alleviate the credit crunch are directly fuelling speculation in commidities, but he does suggest that governments are being dishonest in not owning up to the fact that there is an inevitable decline in living standards that governments are powerless to stop. As Gordon Brown is finding out, declining living standards don't play well with democracies.
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