UK interest rates are at zero. UK inflation is at 4.5%. How come...?

NEWLY KNIGHTED Mervyn King, governor of the Bank of England, has been busy – both in public speeches and before Parliament – addressing the issue of UK inflation, writes Adrian Ash at BullionVault.

Here's how...

- HELP!

- Oh hullo there. Having trouble?

- Please! Get your lion away from me!

- Lion...?

- Yes, your lion.

- It's not mine. What lion?

- The one you just let loose from its cage!

- I see no lion...

- What?!

- I see no lion here.

- Are you insane?! Do something!
 
- I would indeed if there were, as you put it, a lion. Why, I would crack this whip and shake this chair at him. Show him who's boss – grrrrr! – get him back in that cage. But as there is no lion...

- Christ, shoot him! He's going to pounce!

- That cage is very tightly locked I can assure you. And in any case, the cage is empty.

- You and your mates just let him out, you idiot! Shoot him!
 
- As the circus's most recent Lion Report makes clear, what little lion there is remains very well caged. Here outside the cage there is no lion, nor has there been any lion to speak of, and nor will there be any lion worth cracking my whip or shaking this chair at – grrrrr! – for the foreseeable future...

- It's eating my leg!!

- Clearly you are suffering a high level of discomfort. But the requisite conditions for there to be a lion, ravenous or otherwise, do not currently present themselves.

- Ow!!

- Lions require a very specific set of pre-conditions, most notably a dry sub-Saharan climate, vast tracts of open prairie land, and large herds of migratory bovine upon which to feed. Which hardly describes England in Wimbledon week, you'll agree. Apart from all those tourists on the Tube perhaps...

- Please, I'm begging you – get your lion off my leg NOW!

- Perhaps we could come back to that notion of it being "my" lion in a moment. Because your idea of there being any lion at all is a symptom – and not the cause, I would suggest – of your leg being eaten.

- What?! Owwww!

- More importantly, the issue isn't whether or not there is a lion eating your leg right now. It's whether or not you expect there to be a lion eating your leg two years from now.

- Two years from now?! Oh, he'll be long finished by then...

- My point exactly.

- I thought you were the ring-master. But a clown? Owww!!

- Well, one wears many hats in my job...

- And the big red nose? Ow!! Mother! Anyone! Help!

- Really, I am fully concerned by your discomfort. But as there is no lion, I don't believe there is much that I can do to stop him eating your leg.

- Christ...help! Please...!!

- Your constant screaming, plus all that blood, as well as the very substantial chunk now missing from your thigh, could easily lead reasonable people to believe that there is indeed a lion eating your leg. And if I also saw a lion gorging on you too, then I would of course be concerned about my ability to stop him eating the rest of you, sometime over the next two years.

- NOW! NOW! Shoot it now! Or shoot me! Owwww...

- Such severe measures may perhaps be required down the road. But only if the lion – which doesn't exist – were to break out of this big top and start mauling people. Whereas shooting it now, when it isn't here, would risk not only my shooting you by mistake, but it would also jeopardize my chance of wowing the crowd by cracking this whip and shaking this chair – grrrrr! – at one or other performance in the intermediate future.

- Mummy...I...I...

- See? You've stopped yelling already. Whereas a lion attack would have been very much more severe. I've studied and written several books about the beasts, you know. Haven't seen any around lately, though...

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