Tuesday, Aug 17, 2010
Still over the 2% target...
BBC: UK inflation rate slows again in July
UK inflation eased to 3.1% in July from 3.2% in June, the third month in a row that prices have risen more slowly.
Posted by hpwatcher @ 09:45 AM (2220 views) Add Comment
27 Comments
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1. brickormortis said...
I love the celebratory manner in which the BBC cheerfully reports that this is the third consecutive month in which inflation has slowed. Brilliant because that is the main thing isn't it that the rate of price increase is falling.
At least Merv will hve to write another letter. You naughty boy! Write me another letter. You useless little boy!....What a waste of F**king time!
2. mrflibble said...
When is a letter coming back from the Chancellor asking Merv what the heck he's playing at?
I thought the whole idea of having a target was to try and hit it, at least now and again? This Wide Boy doesn't even shoot in the right direction.
3. techieman said...
nope dont get it - surely we should be going up up up edging toward hyperinflation @ 50% per month rather than going down? I know its just around the corner.........
4. mark said...
total BS inflation is 20% at least i see food prices going up and packet sizes going down , it is like a weekly event guess the increase in price or decrease in size, this weeks prize goes to sausage rolls for having 7% meat in them
5. Crunchy said...
3. techieman
Keep on dreaming. Deflation, only after total collapse.
Mervyn must be trying to work out whether it is cheaper for the mortgage holder to stomach inflation or higher interest rates.
It's a no win senario tech. Keep trading the 4 hourly and be happy with the odd zero stop hunt.
6. mark said...
The bit i dont get is king keeps blaming VAT for inflation, how can it be for so long it was reset to the normal level jan 2010 surely that cannot last, also the fact it is back to a normal level and he is blaming it all the time, does this mean VAT was the culprit prior to reducing it to 15% or is it simply a matter of King has no idea how to do his job.
7. jack c said...
"The Bank's governor, Mervyn King, said inflation was likely to fall back below the Bank's 2% target in 2012" - I hope Mr Osbourne points out to him that we are roughly mid way through 2010 and the last time he hit the target was November 2009 !
8. Crunchy said...
4. mark
UK inflation eased to 3.1%. It's all accumulative, even after a Gore'y massage.
True, a measly 7% sausage meat content can be put off to a consumer.
9. mystie010 said...
Who on earth set the inflation target at 2% that's so silly - what we need is a change in policy and set it at 5%. If you can't hit the target then move the goal posts - sorted!
I hate to say this but I reckon that this will be the next step. The BOE will be saying something like - Well actually the inflation target was set too low originally, so the best thing to is raise the target. Job done - simples!
10. growler said...
Now, now Techie
11. wdbeast said...
If house prices were included in the inflation figures (which if they had, would have prevented the boom in prices), I wonder what the rate would be.
How long before they include it?
Exclude on the way up, include on the way down, watch this space!
12. brickormortis said...
So we have a 2% target. If inflation hits it, well done Merv and the boys. If it's too low, it will surely rise adn anyway deflation wlil never happen. If it is too high, it will just fall back on its own if you leave it. Tell me then, what is the point of the MPC? Regardless of what is happenign ot inflation they just leave the base rate. Great job. Can I have your job Merv?
13. estrader said...
It would be great if all you had to do was write a letter to the police explaining why you broke the law.
14. hpwatcher said...
nope dont get it - surely we should be going up up up edging toward hyperinflation @ 50% per month rather than going down? I know its just around the corner.........
Isn't this just the deflation bit though? Much more inflation to follow later.
15. wdbeast said...
From The ONS July Factory Gate Inflation Report (06/08/10)
"Output price ‘factory gate’ annual inflation for all manufactured products rose 5.0 per cent in July. Input price annual inflation rose 10.8 per cent in July compared to a rise of 10.7 per cent in June."
Although I am firmly in the deflationist camp, this does not bode well for short term inflation.
16. techieman said...
"Isn't this just the deflation bit though? Much more inflation to follow later." - what? do i detect a change in tune? Later is the key isnt it... how much later, that is the real question. My god HPW you said the "D" word. What is going on?!?
I think i said over 3% and there might be some pressure to raise the rates but that depends on the detail of the calculation. I am not the least bit surprised the rate has fallen, i think i intimated as much last month. But it is true that the rate is being pulled both ways by competing forces - as WDbeast says.
I am scratching my head and pulling out some splinters here - looks like im not the only one though! :).
17. hpwatcher said...
"Isn't this just the deflation bit though? Much more inflation to follow later." - what? do i detect a change in tune? Later is the key isnt it... how much later, that is the real question. My god HPW you said the "D" word. What is going on?!?
I have both cash and commodities, so deflation is something I would dearly love to see, but so far I have been left very disappointed....all I ever seem to see more and more inflation.
18. techieman said...
"I have ... commodities, so deflation is something I would dearly love to see" Eh?
cant resist!! :).
19. andrew said...
This is pointless anyway.
The BOE follows the Fed's interest rates, it is as simple as that. There will be no move in the UK until US policy changes and interest rates rise.
20. hpwatcher said...
This is pointless anyway.
The BOE follows the Fed's interest rates, it is as simple as that. There will be no move in the UK until US policy changes and interest rates rise.
Actually, I think that the FED controls UK interest rates. There is an interview with Ben B, and he stated that the QE money was also used to hold down interest rates in a number of other places - not just the US.
21. Fubared said...
I don't know where to start....brickormortis is right, while the Bulls**t Broadcasting corporation churns this out as 'good news' - this is in fact disasterous and a clear indication of who's going to foot the bill for all this speculation.
Today Unite backed the 2% pay rise offered by BAA to it's members, but do they realise that in a 3.1% annual inflation environment this is in fact a 1.2% PAY CUT?
Do all those other workers out there understand this too? - and this is only based off the useless BoE measure. The real inflation rate - which is essentials only - is way, way above this figure.
...and we haven't even seen the wheat and cocoa prices peak with the commodity speculators taking their 'cut' from our needs.
Oh this is going to end soooooo badly - I am going to dance in the streets when I see the 'shocked faces' of ministers as they eventually realise what their idiocy has done.
They must believe that 'fiddling the figures' will actually change anything - well it doesn't, all it does it make people more angry when they find out what you've been covering up.
I'm looking forward to a 5-10 year steady decline in house prices - we're seeing falls already and they haven't even put rates up yet! If they leave it too late - it will be too late, if they do it too early then reposessions will go through the roof as there are a lot of people 'just getting by' with these ultra low rates - as I keep saying, in the 1990's we had base rates of 15% (no typo there folks) - and that was a much milder recession!
Oh some people are going to be very, very surprised - but it's not like it's not been coming for a loooong time.
22. alan said...
The UK is a junior partner to the USA, anyway. UK interest rates won't rise till the US rates rise. Why not watch the US market and guess how it will affect us? Maybe start with Fannie & Freddie (see other posts).
Back to the topic of inflation - wheat prices going up will drag lots of food indexes upward over the coming months as higher costs trickle through.
23. Crunchy said...
16. techieman
May the Hindenburg omen be with you.
You pays your money.......
24. peter said...
As some other people said, the obvious move now is for the inflation target to be raised or scrapped.
Remember when the money supply figure was watched closely? When they lost control of that they just said it didn't mattter any more.
The result? The mess we are in now.
25. peter said...
As some other people said, the obvious move now is for the inflation target to be raised or scrapped.
Remember when the money supply figure was watched closely? When they lost control of that they just said it didn't mattter any more.
The result? The mess we are in now.
26. Crunchy said...
18. hpwatcher & 19. alan
Yep.
No move till Bernanke's shiny nod. Come on, their all independent self serving banks working collectively to milk the cash cow.
'Just A Goddamned Piece Of Paper' George Bush.
27. easybetman said...
@7 mystie010
You see... inflation is about expectation. If they set the target to 5%, then the 5 years UK gilt will be at least 6% and the UK government cannot afford that.. With gilt at 6%, a 5 year fixed rate mortgage will be 7.5% or so... That is why Mr King has to be convenient with the truth..