Tuesday, Jan 16, 2007
Oooops! (he-he!)
BBC: UK inflation rate increases to 3%
The UK's rate of inflation jumped to 3% in December, according to the latest set of official figures.
The rise in the Consumer Prices Index, up from a rate of 2.7% in November, was at the top end of expectations.
Posted by tyrellcorporation @ 09:52 AM (169 views) Add Comment
24 Comments
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1. denzil said...
No surely this cannot be true, can it?
The UK has a miracle economy based on low interest rates and low inflation.
Oh and BTW, surely a "calming rate cut" is in order.
2. george monsoon said...
I wonder what Mervyn's letter will contain?
3. This comment has been removed as it was found to be in breach of our Blog Policies.
4. Kc said...
I heard on the BBC this morning that Mervyn will only have to write that letter if rate hits 3.1. Is that correct?
5. tyrellcorporation said...
... some soiled underpants!
6. Time To Raise Petrol Prices said...
Not quite chaps - the rate has to touch 3.1% (i.e. GO OVER 3%) in order for the Governor to have to write to the Chancellor. The pen stays in the inkwell for now!
7. sovietuk said...
It seems that there is a continuous flow of bad data coming though now. Or a better description is "it's no longer possible to hide the cracks". Low interest rates for so long combined with unaffordable public spending and (in reality) a worsening economy. A runaway train that will cause carnage before it comes to a stop.
8. tyrellcorporation said...
Apparently he doesn't have to write a letter this time round (which seems a bit odd to me). He's basically got three months to get inflation dropping otherwise he's in some serious do-do! I reckon another 0.25% next month is a real possibility as he won't want to leave anything to chance now.
9. Scumbag said...
Unless the huge city bonuses stop then inflation will keep rising. They are responsible for a huge chunk of the rise in inflation because of their increased spending power. So their exuberance will affect all of us. It's like taking sanctions against Iraq. It didn't work because it only affected the people of Iraq and not the regime. There was no incentive for the regime to change their ways.
10. paul said...
I find it very interesting that it's 3%. Not 3.1%, 3.2% but 3% exactly because it means that that letter won't have to be written.
What I do know is that once you're fiddling the fiddled statistics, Rome must be burning.
What's the betting that inflation will drop next month to 2.99%, the BofE will breathe a vocal and public sigh of relief and lower rates by .25%?
11. paul said...
And if the inflation measure wasn't changed, he'd have had to write that letter.
RPIX of 3.6% and above is unacceptable according to the old rules of MPC incompetence.
It's currently 3.9%. They've got away with it but only by fiddling it. I hope the media have them for breakfast and plop them out before lunch.
12. tyrellcorporation said...
...more like my savings must be burning!
13. tyrellcorporation said...
I thought RPI has jumped to 4.4%
14. tyrellcorporation said...
'The Retail Prices Index, which includes mortgage interest payments, rose to 4.4% in December from 3.9%. '
15. converted lurker said...
petrol did not go up by 2p in my neck of the woods
16. headmelter said...
I think another .25% in Feb is the order of the day, the shops seemed pretty busy in early January.
17. paul said...
tyrell, the RPI and RPIX are different.
The X is excluding mortgage interest payments.
18. Rickyb said...
The BofE should have started raising interest rates when it was clear that energy prices were increasing over 2 years ago. A little misery two years ago will now be replaced by even greater misery over the next few years. It has been obvious to many of us on here for some time (but not apparently to leading economists nor the BofE) that inflation was going to take off.
19. autopilotengage said...
What have "mortgage interest payments" got to do with "retail" prices anyway? What hokum these measures are.
20. monty said...
B*gg*r. Way back in the dark depths of December I said to Paul that "If it ever exceeds 3% then I shall join you in querying their competence".
http://www.housepricecrash.co.uk/newsblog/2006/12/blog-threat-of-rate-rise-in-new-year-escalates-2092.php
Well, there you have it and here I am. I don't really care if it's 2.99% or 3.01%. The MPC has not done its job and should explain why. I think a letter to Gordie is warranted. Demanding resignations at this stage would be counterproductive but it's time to start scouting for replacements. Roger Bootle perhaps? He's not great with the old crystal ball (who is?) but his fundamentals are sound.
I'm willing to bet it'll be down this month. Oil 'n gas have taking a fair nosedive recently and that should feed through into the January figure.
21. tyrellcorporation said...
The US have just sent two nuclear powered carrier groups to the Middle East and we've sent two RN minesweepers to the Straits of Hormuz. Is this a precursor to military action against Iranian nuclear sites? Watch this space and watch the price of oil! I make a bold prediction that we will see Israeli air strikes in the next 3-4 months and that the Iranians will try to block a 1/4 of the World's oil supply as a result.
...oil price driven inflation will then go ballistic!
22. sold 2 rent 1 said...
tyrellcorporation,
Oil price is still falling.
http://www.bloomberg.com/energy/
I agree that the price will rebound from a botton of 45-50 when the US gets involved in a third war.
23. inbreda said...
If the US stretch themselves with too many more wars, they'll find Chavez invading their country with a hundred farmers with pitchforks. And I reckon Chavez would win!
24. enuii said...
About sums this country up if all we can rustle up these days is 2 minesweepers to join two carrier groups! Anyway oil prices won't fall much further as someone will start something to get them going up again thats the beauty of the middle east, those Arab chappies are not daft.