Wednesday, Jan 16, 2008
US inflation reaches 17-year high but not in the UK
BBC News: US inflation reaches 17-year high
Consumer prices rose by 4.1% for all of 2007, up sharply from a 2.5% increase in 2006, the US Labor Department said.
The figures also showed consumer prices rose by 0.3% in December, down from November's increase of 0.8%.
Energy prices jumped 17.4% in 2007, while food prices rose 4.9% - their biggest increase since 1990.
UK inflation at 2% an all time low? Who's cooking the books?
You can fool some of the people some of the time!!!
Posted by lloyd @ 03:25 PM (492 views) Add Comment
8 Comments
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1. Icarus said...
In the CPI for the UK the weighting for 'Food & non-alcohic beverages' is only 10.8%, i.e., only that % of total expenditure is on that item. If food went up another 10 - 12% next year and every other item went up 2.1% ( = the current CPI figure) this would take CPI up to no more than 2.2%. The categories with bigger weightings than 'Food etc.' are 'Housing and household services', 'Recreation & culture', 'Transport' and 'Restaurants & hotels'. Not far behind 'Food etc.' are 'Furniture & household goods' and 'Clothing & Footwear'. It's obvious that the CPI doesn't measure what the average household spends since a most of the weighting goes on the categories ('Recreation etc., Transport' and 'Restaurants etc.') in which the expenditure of companies (tax-deductible) and tourists is substantial. Little wonder that unions get upset when they're told that their members' cost of living is going up by just 2.1% p.a. No doubt the credit crunch will limit expenditure on furniture, clothing and bits of the 'Housing and household services' category and therefore give a slightly greater weighting to food, but this re-weighting probably wouldn't be substantial and would take years to happen anyway.
2. Yellerkat said...
OMG! Slash interest rates!
3. Bobrisk said...
I dont see how the UK's inflation can be so low. I live in the US (A Brit) and speak to my mother (A pensioner) each week. She tells me how prices are rising in the shops in the UK. We live in NJ and really haven't noticed any real change. Someone in the UK is lying.
4. Albertini Albertino said...
Someone inform me here - is the US measure of inflation nearer to RPI or CPI?
5. shipbuilder said...
'Economists said that the inflation data was unlikely to deter the US Federal Reserve from cutting interest rates aggressively at its next meeting.
"What this means for monetary policy, it seems, is that there is some room in there for the Fed to go ahead and cut rates without fear that inflation is going to rear up," said Oscar Gonzalez, an economist at John Hancock in Boston.'
Errr...am I missing something here?
6. geed said...
Yes, he's American so therefore quite possibly cerebrally challenged.
With comments like that it is no wonder the States is in such a financial ruin.
7. Little Professor said...
Economists are still saying a 0.5% drop is a dead cert for this month, and there is a 44% chance of a 0.75% drop.
8. Ash4781 said...
Clothing - cutting prices to shore up demand as last cash is available due to rising energy costs. Deflation ?