3.7% inflation in the UK yoy

The latest figures out of the UK show inflation running at 3.7% yoy.  The UK has been diverging from the USA and the EURO currency area.  Both the USA and EURO are running below inflation targets.  In the case of the US dollar well below, even below 1% yoy in some months.  This means both the US and EU central banks have all the room in the world to print if needs be. 

But it appears the UK is not in a position to print with inflation at 3.7%.  They are still running a budget deficit of 12% of gdp, the coalition government has wisely stopped trying to cut the deficit.  Fortunately for the UK the debt to gdp ratio is still quite healthy at only 65% of gdp.  So they should have a few years left of room to maneuvre.