Tuesday, Mar 20, 2007
Inflation down, believe it or not
Telegraph: Energy prices to weigh down inflation
Inflation could be set for an even more abrupt fall this year than originally expected, after the Office for National Statistics announced it has dramatically increased the weighting of gas and electricity prices in the Consumer Price Index.
.....
He added that there was now next to no chance this year of CPI rising above the 3pc mark, at which point the Bank of England Governor would have to write a letter of explanation to the Chancellor.
Posted by monty @ 09:44 AM (170 views) Add Comment
16 Comments
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1. harold said...
Monty, the BBC are reporting that inflation rose in Feb from 2.7% to 2.8%. Still, if you insist on reading the Telegraph...
2. paul said...
"He added that there was now next to no chance this year of CPI rising above the 3pc mark, at which point the Bank of England Governor would have to write a letter of explanation to the Chancellor."
So the answer to being accused of cooking the books on inflation is to ... cook the books even more. The old adage - "when you find yourself in a hole, stop digging" - hasn't causght on at the Bank of England.
3. mrmickey said...
This is driving me nut's it's like some Kafkaesk nightmare my gas/electricity bill has gone up 24% on last year, who believes this rubbish, as Hitler said if the lie is big enough and you say it enough times people will believe it.
4. monty said...
Apologies for confusing you harold, that title should have read "Inflation to go down". Yes, I did see the 2.8% news but you got to post it before I could. :-)
5. george monsoon said...
Pre-budget, predictable vomit from all the usual suspects.
Not even bothering to read this article. Its going to be tripe.
6. Andy said...
I am glad that gas and electricity prices are making a bigger influence on inflation, this is a commodity which we all use and I am certain that in a world of dwindling oil resources/political tensions the cost of gas/electric are going to skyrocket taking inflation with it.
The energy crisis is unfolding in front of our eyes - even, moving to nuclear power will not be a solution as there is only a finite supply of uranium ore and you will get the same probs. Biofuels/Windfarms requires acres upon acres of land to generate any power and consequently this will push up food prices as fuelcrops compete with food crops.
In our tiny little overpopulated island coupled to the global economy and fast emerging indio/pacific area markets lets face it we are on course for maximum inflation and I do not believe BoE can do anything about it, whether they raise or reduce interest rates the outcome is the same - it's going to hurt.
7. Tick Tock said...
But nobody cares what CPI is. It is a meaningless stat. designed to vastly understate the rate of inflation.
Looks like a 5% pay rise for me and my colleagues this year (wage negotiations almost complete) and that is for a FTSE100 Company. This isn't enough to Cover real inflation of course, but anyone excepting 2.4 is a mug (and probably not in a Trade Union!)
8. denzil said...
This is cynical. Both electricity and gas are expected to drop considerably this year so surprise, surprise the weightings have been adjusted to include more of these two items.
9. waitingfor hpc said...
raise the red flag the communists have landed in the UK! Socialism at it's best lie, lie again, and if that does not work then fire em (or shoot em) whichever is easier.
10. Randomkevlar said...
This is just dangerous, if this had been done 2 years ago before massive increases in gas/electric inflation CPI would be soaring over 5%. When these figures are adjusted in this way ONS should be forced to recalculate inflation for at least the last year to produce a valid rate before the any new data can be produced.
I am really beginning to feel the whole thing is getting out of control, the more you fiddle the books now the more pain later.
Danger Will Robinson, Danger
11. David20040_0 said...
How come inflation didn't rise like crazy when gas and electricity went up?
This is stupid, they know gas and electricty is going to drop so they are going to manipulate the figures to make it llok like inflation is dropping.
Why do they exclude things which are rising like crazy from inflation figures?
12. David20040_0 said...
Oh hell this could even lead to a drop in interest rates further fuelling the housing boom, when will this madness end?
13. pedagog said...
Reminds me of when the Tories kept changing the way unemployment was counted in the early eighties. Surprise, surprise, every time they changed the way they counted unemployment the figures went down.
Blair has always modelled himself on Thatcher, so no surprises to see a similar thing happening with inflation.
14. tyrellcorporation said...
Pedagog, this administration makes the Thatcher years seem like a democratic utopia!!!
15. royston said...
If the Financial Controller of ENRON proposed that, what would we call it?? Mmmmm - I've forgotten the word.....................
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