The UK CPI inflation figure has jumped from 2.5% to 3%.

The CPI figure is the official control target for the Bank of England which is required to maintain CPI at or near 2% using it’s primary weapon; interest rates. The BoE, however have been cutting interest rates in recent months causing Sterling to dive against the Euro.

The CPI figure is consistent of a basket of goods which is arbitrarily altered in an apparent attempt to engineer a low figure making it somewhat useless for continuous comparison. The RPI figure which is arguably more realistic yet still flawed jumped from 3.8% to 4.2%. As someone who actually has to buy food, oil, and necessary commodities (rather than ipods) in the UK, I would suggest that the real rate of inflation is somewhere between 6% and 10% and I’ve no shortage of people these days who will agree with me.

In this BBC article, some ’some analysts’ say that the high rate of inflation is caused by the high prices of oil and food and that raising interest rates would do little to control this inflation.

Ok, ’some analysts’, lets us say we cut interest rates; what then happens to the pound? That’s right, it falls against other currencies as the carry-trade legs it. Oh, look, the cost of oil and food of which we are net importers and must pay for in foreign currencies just increased. Congratulations, ’some analysts’ you just fueled inflation.

There is news today that Électricité de France (EDF), Europe’s largest energy producer may be about to make a takeover bid for British Energy plc, the UK nuclear power provider.

Électricité de France produces 22% of Europe’s electricity mainly from French nuclear reactors, some of this energy is already exported to the UK.

The UK has aging nuclear power stations, some of which are scheduled to go offline soon and there is projected energy black-hole. The UK government dragged it’s feet for 10 years up until the last few months when they finally decided that nuclear power would be needed to keep the country running.

If British Energy plc were to be sold, the UK government would give up it’s stake so potential energy export revenue for the British from new reactors sited in the UK may be limited.

Possibly the only chance for avoiding the energy gap in the United Kingdom is the purchase and deployment of quick-assembly modern nuclear reactors from France.

According to FT.com, the Russian government have signed off on plans to increase fuel prices which would ultimately see the wholesale price of Russia’s natural gas product increase by 28 percent a year.

Russia’s Gazprom supplies the European Union with around 25% of it’s natural gas supplies.

In possibly the most inexcusable bought of stupidity ever seen in the field of privacy, the outgoing Italian government deliberately published the income figures for every tax paying Italian citizen on a publicly accessible website.

This move was made under the auspices of a crack-down on tax evasion. Well, nothing would make me want to avoid paying tax more than keeping my income details of a public website!

The website was apparently up for several hours and attracted huge interest but was taken down after a formal complaint was received from the Italian privacy watchdog.

It has been suggested the data was published due to a case of ’sour grapes’ by the outgoing centre-left government. If so, Italy clearly has a huge problem with the way their government operates. The government’s duty is presumably to protect it’s citizens but this move will have endangered many. I should imagine that within moments of the data becoming available, any theif worth their salt would have been poring the data for the juiciest and least protected targets.

If I run a wooden spoon award this year, the Italian government would be a front runner.

According to a report by Nationwide Building Society, home prices in the UK have now been falling for six consecutive months and are now also year-on-year negative by 1.1%

During 2008, the price of the average home has been falling by nearly £45 every 24 hours.

Chief economist for Nationwide, Fionnuala Earler comments:

“The latest fall in house prices follows from the steep decline in house purchase transactions over the last half
year. As a result of falling demand from first-time buyers, higher mortgage rates and tighter lending criteria, the
number of mortgages approved for house purchases has fallen to record lows. The fall in transactions has pushed
up the stock of unsold property on the market and improved the bargaining power of buyers, thus pushing down
on prices.”

The last 10 years has seen an alarming asset bubble develop in the UK, a similar if not worse situation as to that which happened in America.

A merchantman, Westward Venture has fired warning shots at a small boats, thought to be Iranian in the Persian Gulf.

The Westward Venture is reportedly under contract with the US military.

On the approach of the Iranian boats, Westward Venture first attempted to raise them by radio, then fired a pyrotechnic flare and when the boats continued to approach, the ship’s security crew opened fire with automatic small arms. It is not immediately apparent whether the gunfire was directly toward the Iranian boats.

SS Westward Venture is a 17,500 gross tonnage 744 foot long freighter launched in 1977 and registered in Tacoma (US)

According to ULS, there would be a maximum of 45 people on board.

SS Westward Venture can be tracked online in near-real-time.

It is expected that the news of this tension-increasing event in the Gulf will apply further upward pressure on oil prices.