Glint Special Report: Mario Innecco – “I’ve caught the Bank of England red handed, fudging the inflation data”

The financial markets and macroeconomics analyst reveals shocking evidence to Glint Founder and CEO, Jason Cozens that the UK’s central bank is manipulating data to make inflation look lower than it is.

Mario has been using the Bank of England’s inflation calculator for the last few years and has found it a useful tool to bring home the point that under a sound money system the currency maintains its value and there is virtually no inflation.

The Bank of England (BOE) inflation calculator goes as far back as 1209. “In my YouTube channel(3) I have focused on the period from 1821 to 1914, which is the period after the Restriction Period (1797 to 1821) which was when the Bank of England suspended the gold standard due to the Napoleonic wars”, Mario tells me.

And Mario knows the financial and monetary system. He’s spent over 30 years in the city dealing with everything from commodities and FX to equities, interest rates and government bonds. 60,000 have subscribed to his YouTube channel, that he runs under the name ‘maneco64’, to watch the informative 2,600 videos that he has posted and that have racked up over 18m views.

From 1821 to 1914, Britain went back on the gold standard and according to the BOE/IC inflation averaged -0.1% per annum and one only needed £0.95 in 1914 to buy the same basket of goods that cost £1 in 1821. “So for almost 100 years when Britannia ruled the waves the pound actually gained in purchasing power”.

“Up until June last year, which was the last time I referred to the BOE/IC I also checked the inflation rate from 1914 to 2020 and found that it averaged 4.6% per annum during that period and that one needed £118 in 2020 to purchase an equivalent basket of goods worth £1 in 1914!”

“I had also looked at the period from 1997 to 2020 as 1997 was when the Bank of England was granted independence by the Labour government and as a result given a 2% inflation target. In that 23-year period, the BOE/IC showed an average of 2.7% inflation per annum which clearly showed the Old Lady had missed its target”.

So when Mario did a recent report for his YouTube channel on the CPI he again referred to the BOE/IC and to his astonishment all the data that he had reported last year since 1914 had been dramatically changed to show much lower inflation.

“The 1914 to 2020 period now shows an average inflation per annum of 4.2% and one needing £78.53 in 2020 instead of £118 to purchase the equivalent of £1 worth of 1914 goods”.

The most shocking change for Mario was for the period (1997 to 2020) since the Bank of England was ‘granted independence’, (something we don’t think the bank really has as the Chancellor could at any time overrule the Governor of the Bank of England and the Bank’s Monetary Policy Committee).

“Instead of an average annual rate of 2.7% the BOE/IC now shows a much lower late of 1.9% which is actually under the 2% target!”

We leave it to you the reader to make up your mind about the Bank of England’s intention in appearing to revise history. Mario’s take is that along with the government they are likely to now try to make inflation look lower than it actually is.

Mario also thinks it’s probable that government or central bank officials might try and wriggle their way out of this and attempt a cover up when challenged. “Their excuse will be that they, with the number crunchers at the ONS, have found a “better” way to calculate inflation”.

Foot note:

Section 19 of the 1998 Act said:
19 Reserve powers.
(1)The Treasury, after consultation with the Governor of the Bank, may by order give the Bank directions with respect to monetary policy if they are satisfied that the directions are required in the public interest and by extreme economic circumstances.
(2)An order under this section may include such consequential modifications of the provisions of this Part relating to the Monetary Policy Committee as the Treasury think fit.

(3) https://www.youtube.com/c/maneco64