Tuesday, Dec 30, 2008
UK Inflation Forecast 2009
The Market Oracle: UK CPI Inflation, RPI Deflation Forecast 2009
UK is heading for deflation during 2009, which gives opportunities to investors to scale into investments.
Posted by nadeem walayat @ 11:02 AM (851 views) Add Comment
4 Comments
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1. nopensionnohouse said...
Jesus Nadeem, even by your standards the graphs are mental!
2. paul said...
Good article Nadeem - thanks.
It is interesting that although M4 is shooting through the roof, the adjusted growth is through the floorboards.
3. techieman said...
a picture is worth a thousand words......Congrats on the charts! And the text aint bad either.... nadeem when are you going to produce an updated HP forecast?
4. Inbreda said...
"To date the Bank of England has only succeeded in hitting its inflation target for 5 months out of the 5 years that the BOE has been targeting 2% CPI inflation" - yes, they are overpaid and useless. No surprise there.
"the headline growth of UK M4 money supply, that is being mistaken jumped on to signal hyper-inflation." - I don't buy this. I get that M4 growth is meant to displace 'fictional' credit bubble money, but I think the inflationary effects are different. Credit is borrowing in the present to be paid off by future earnings - it doesn't affect the value of the GBP. It will cause inflation in certain speculative areas such as house prices, but probably hasn't had an effect on the price of bread or in fact the value of imported goods (as it hasn't affected the value of the GBP). But printing money DOES affect the value of the GBP which will cause inflation in imported items and essentials such as bread. Meanwhile the borrowed money still needs to be repaid. It is an attempt to halt the deflation in house prices (by inflating away the debt) at the expense of stagflation in essentials.
The UK is ruined either way.