Tuesday, Dec 18, 2007
What a shocker (Part 2)
BBC: UK inflation holds steady at 2.1%
UK inflation remained unchanged in November as lower utility bills offset higher petrol prices. Official figures showed the annual rate of CPI inflation was unchanged at 2.1% last month, just above the government's target of 2%.
Observers say the data could give the Bank of England more opportunity to cut UK interest rates further.
My family must have a very obscure shopping basket based on these figures - just had the highest ever quarterly electricity and gas bills having lived in the same house for 23 years.
Posted by jack c @ 10:04 AM (2103 views) Add Comment
41 Comments
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1. tyrellcorporation said...
Official UK inflation statistics have detached from 'street' (actual) inflation.
Official UK interest rates have detached from the 'street' (actual) interest rates.
Central Banks are becomming irrelevant.
2. tyrellcorporation said...
'The Office for National Statistics said gas and electricity bills were falling at an annual rate of 5.6%, the steepest fall since records began.'
WTF!!! Anyone else got falling energy bills? Nope, I though not.
3. cyril said...
Maybe the boffins at the ONS just switched their gas and electric suppliers to the latest (time limited) special offer?
4. hpwatcher said...
They are trying to keep public sector pay down, with these false measurements.
Just as in the same way that commercial bank interest rates have detatched from BOE interest rates.
The real danger of falsification is that the systems and checks will be insulated from the real downturn when it comes.
5. C'mon Correction said...
Hmmmmm - 2.1% inflation you say. I think the public and the unions are starting to see this just doesn't add up anymore - even if it did our measure of inflation (and the weightings of the items basket) is seriously flawed in measuring the cost of living in the British Isles. Another 6 months of the government issuing these irrelevant inflation reports and everyone will cease to take notice and demand 5% wage increases yoy or strike regardless.
People are losing trust FAST with this government, they had better take note quickly.
6. waitingfor hpc said...
WHAT A LOAD OF CRAP - COSTS ARE WAY WAY UP. NO ONE IN MY OFFICE BELIEVES THE FIGURES ANY MORE. WE WERE LAUGHING WHEN WE READ THIS!!!!
7. Becky said...
These figures have lost all credibilty, same as our government. I've just looked in the Money saction of The Mail and found the following two articles - "Food prices hit new high" and "Npower shocks with 17% price hike"
8. cornishman said...
RPI is up to 4.3%
9. daft boy said...
Its just government lies about inflation. I also believe growth figures are being falsified. I would not be suprised if the last two months were negative which means we could already be in recession.
10. hpwatcher said...
I find it amazing that anyone has got the cheek to put their names to these figures.
This is how a financial crisis starts...with these ''people'' protecting their jobs and making it look like they are doing a brilliant job.
The CPI now means absolutely nothing.
11. waitingfor hpc said...
can we start a petition on here and do our own basket?
12. Dan670844 said...
What is going on? Even my sons pet mice realise that prolonging the correction will only make it worse when it happens. Is our government, the BofE etc that naive to think that adding liquidity will help. It will not make the debt mountain go away, the problem is institutions, companies, private household no longer have an appetite for debt......because they are already up to their necks in it and this will not go away
13. mrmickey said...
On News Night last night the general opinion was that the BOE should cut rates hard and fast , there was no mention of the effect this might have on inflation and the fact that the BOE's remit is to keep inflation within certain parameters.
14. Social Justice Through Housing said...
Why is anybosy suprised. The whole housing bubble is based on a lie.
My house costs me £300,000 6months ago; I repaint a few rooms and make an MDF fireplace (total cost £200); now it's worth £400,000
Stupidity and lies.
This government has always been in on the act.
This is not a New Jerusalem - it is a con-trick.
15. happyrenterz said...
Figures can be massaged. But in the end the true figures do emerge, when it suits the powers that be. In the US the October figure was ridiculously low and then spiked up again in November. Probably happen here too when wage deals negotiated etc.
16. rickyb said...
The figure for CPI inflation isn't relevant when trying to determine our personal cost of living increase. Personally, I regard RPI inflation + 2% to be a more realistic figure for most of us, and this has been the case since at least the 1970's.
17. nopensionnohouse said...
Everything you ever wanted to know about inflation calculations but were too afraid to ask!
http://www.statistics.gov.uk/elmr/04_07/downloads/ELMR_April07_Wingfield.pdf
http://www.statistics.gov.uk/CCI/article.asp?ID=1746
18. soldinjune said...
All about energy prices:
http://www.berr.gov.uk/files/file41491.pdf
19. new user 2007 said...
The BoE is meant to look at future trends, not just current prices. When energy costs were really high they said base effects meant that for their forward looking purposes i.e. 12 to 24 months, prices would be weaker next year (year on year). This means that if prices for energy really did fall this time they will expect a base effect to cause them to rise in 12 months time?
Also, with the economy slowing but wages still rising at recent trend rates, we will see a fall in labour productivity (firms won't sack quickly but demand will weaken). This is the same as saying unit costs will go up and this is very inflationary...the BoE does not worry as long as salaries are going up at the same rate as output. Lets see if it does worry when the reverse happens. Sadly, I do not think it will.
There always seems to be an excuse on hand as to why a cut is needed, even though the excuses used are inconsistent when the need to raise rates is obvious e.g. the current high price means that the base effect next year means prices will fall, so we can cut BUT the current low base effect does NOT mean that the base effect next year means prices will rise.
20. new user 2007 said...
This link was on the same page.
http://news.bbc.co.uk/1/hi/business/7140069.stm
Apparently, the UK is the first country where a tightening labour market will actually ease inflationary concerns (and so allow further interest rate cuts?), rather than mean upward pressure on wage bills and so push up prices.
21. planning4acrash said...
The RPI/CPI gap has extended by 5% because RPI is up 0.1% to 4.3%. The gap now stands at 2.2%, up from 2.1%. The gap is more than double the CPI measure. So this month actually represents an inflationary milestone, a dangerous shift that can only be overcome by doubling interest rates. Maybe we shall see another black monday. The trigger could be a massive spike in LIBOR rates. So The trend continues, undiminished. Anybody care to post the graph? I don't know how to.
http://www.statistics.gov.uk/cci/nugget.asp?id=19
22. who stole my pension? said...
If the U.K. CPI is calculated as per the European standard method (which is should be) then why is the Euro zone CPI twice that of the U.K. CPI. All the factors increasing CPI are global factors (food, petrol etc). Something smells here. Is Gordon cooking the books? Can someone explain the difference?
23. planning4acrash said...
Actually, the trigger would more likely be a falling pound. In defence of currency?! So, all we need do now is watch the currency levels to call the true end of the bull market. So long as the banks can maintain confidence in the currency the boom remains relatively intact and a soft landing remains credible. It is my opinion that there is a general asset bubble, but that it is larger than normal primarily because of the RPI CPI gap, which is a bubble in its own right, that continues to be inflated. This bubble will collapse at some point, but calling the top will be like calling the top of the housing market. No doubt it has a couple of years to run, the way that central banks are pumping it with liquidity and interest rate cuts at the moment. like any bubble it is self perpetuating and unsustainable. Keeping the CPI and RPI gap at the same level will not counteract the credit crunch, so the gap must be increased to support the market. That process should give the market support and some momentum for some time yet and the scary thing is that this process has become accepted as necessary by banks accross the world, who, by joining forces, are merely amplifying the unsustainable to yet giddier hights.
24. Planning4acrash said...
Either that or a sign of wage led inflation, which the government is clearly concerned about with their treatment of the police.
25. sovietuk said...
Systematic fraud and lies
26. Fulhamfrankie said...
wtf
27. george monsoon said...
we all know that this is a BIG FAT LIE cooked up by the ONC on behalf of the government. It makes feck all difference to the fact that we are heading for a massive depression globally, and there is not a stuff that this puppet reigime will do to change it.
I would stockpile longlife luxury foodstuffs and machine parts.
28. Koala Bear said...
2.1%!!! I can't believe the average person is not outraged by this news. Even the RPI figures seem articifially low. My personal RPI is approximately 6%. Why aren't people demanding reform?
29. renting2 said...
I think the ONC must have changed where they shop from M&S food hall to Tesco Blue Stripe! And walked there!
Sadly most people can't seem to see past Christmas to their next credit card bill. Let alone worry about what the government spins about these days.
30. Weathly Vagrant said...
How do these people keep a straight face?
From what I remember, and I may be wrong, but when calculating inflation they do strange things like;
If last year a £500 computer came with 512Mb and a 1.5GHz CPU etc, and this year for £500 pounds you get 1024Mb and a 3GHz CPU etc then they consider this that inflation on the computer has gone down by ~50%
The same thing would apply for TVs, mobile phones etc.
Of course the old electronic item may no longer be "compatibile" with the latest "systems", and you're highly unlikely to find anywhere that sells it.
31. denzil said...
Utter rubbish.
CPI 2.1% yeah right, a herd of young pigs just flew past my window too.
32. speculatorone said...
This has GB's prints all over it, what a disgrace this country has become. You couldn't make this rubbish up if you tried...
33. planning4acrash said...
Since student loans are linked to RPI, this means a 0.1% (pro-rata) increase in student loan charges.
34. planning4acrash said...
Students subsidising low cost home loans for their parents.
35. drewster said...
27. george monsoon said...
- "I would stockpile longlife luxury foodstuffs and machine parts."
Well I wouldn't. History has been unkind to people who stockpile things, whether it's crazed cults in a compound in Texas or eccentrics in the UK filling their cellars with baked bean tins. The only way stockpiling food becomes sensible is if we face Zimbabwean-style hyperinflation (+10,000%) and/or government-imposed price controls on basic foods. Alternatively if we face an oil shortage on an even larger scale than during the 2000 fuel protests, stockpiling food would become a sensible course of action. For now, spend your money on more fun things!
36. justwatching said...
Drewster, why spend your money on more fun things, fook it, spend someone else's (just like gordooooooon does regularly)
37. it_is_going_with_a_bang said...
They probably lost the real figures in the post and just had to make something up quickly.
38. geed said...
C'mon C'mon, cougettes are cheap and diamond solitaire rings are a bargain. I mean, I need my diamond rings, in fact I need a new one every week. I also download mobile ringtones on a daily basis. My rent is going down which is great, but my mates who have mortages are screaming mercy at present but it doesnt matter as mortgage repayments are not included i the CPI!
Cars are cheap and so are caravans and boats, clearly all day to day requirements......What a great measure of real inflation!
Seriously though. Rail fares and mortgage arangement fees will (sorry that is "should") push this unrealistic index upwards in January.
It appears this index is ridiculously selective, including rents but not mortage repayments (I understand the danger of this but ther must be some representation of home ownership mortage costs other than arrangement fees or get rid of rents, they can't just have it one way). Vehicle service fees but not road tax etc...
Dinners ready all this ranting is making me hungry...
39. denzil said...
geed said:
>>C'mon C'mon, cougettes are cheap
I just mulched a load of these down for fuel for the motor. Just served up Ipod and chips for the kids.
Seriously though, the figure that is supposed to represent CPI has passed rapidly through the sublime on its journey to rediculous. Over the last few years real expendible income has shrank for just about everybody I know but this is being masked by the con that is the CPI. To suggest CPI is 2.1% is patronising at best.
40. dohousescrashinthewoods said...
One thing to say, Gordon "@$%!*£" Brown:
BUUUUUUUUUUUUUUUUULL Sh@t.
41. wiltshire said...
Just one example of the lie that is CPI -
Inflation hits pensioners and middle class -
"Living costs for many pensioners rose by 7.7% in the year to April, compared with the consumer price index inflation figure of 3.1%, according to figures produced by Capital Economics.
Meanwhile, middle-class families inflation is running at 7.4%, caused by significant increases in education costs and university tuition fees."
http://www.digitallook.com/news/1288658/Inflation_hits_pensioners_and_middle_class.html