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HPCbeliever

Bank Of England Inflation Report

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Merv and friends publish the inflation report tomorrow at 10.30am http://www.bankofengland.co.uk/publication...endar/index.htm

I assume that inflation (on CPI) fell this month. The question is can it for much longer? The weak pound (and even with its rally it is historically weak) will raise the price of imports an commodities.

Edited by HPCbeliever

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They've been consistently wrong for years now, why anyone listens to their readings of the tea leaves is beyond me.

Guaranteed they will say deflation is a threat and predict very low inflation for years to come, which will be proven to be totally wrong as the the year progresses.

weakening pound + rising oil + rocketing sugar + most commodities rising = huge inflation

Yes it really is that simple

Edited by I Told You So

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What are the B of E pension managers doing with their holdings?

Dunno but I wouldn't bet on them even getting that right.

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Oh, yup...

and think what a VAT reversal back to 17.5% or (god forbid) higher would do to the RPI...

Then think what higher IR's (via Gilt yields going up in a bond market collapse) would do to the 'disposable' income people are so happy to spend on tat....

And how Mortgage interest payments lowered the RPI so effectively last Oct08-Jan09...

Time is running out, the RPIX is already showing we will have +1% RPI by january if there is no change in the monthly index at all between now and then...

Edited by chris c-t

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I have already had a look at the national statistics office website and their stats. Looking at their RPI data, positive RPI should return at a fairly robust level in November / December time, even without the VAT increase. Underlying RPI excluding mortgage interest and indirect taxes has been increasing all year. Once last years figures drop out, any risk of deflation will be gone. The thing is nobody will have seen it coming when it does, even though the stats show that now.

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Guest Daddy Bear
Merv and friends publish the inflation report tomorrow at 10.30am http://www.bankofengland.co.uk/publication...endar/index.htm

I assume that inflation (on CPI) fell this month. The question is can it for much longer? The weak pound (and even with its rally it is historically weak) will raise the price of imports an commodities.

I assume that inflation (on CPI) fell this month.

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Although interestingly Merv has more or less pegged sterling to the dollar price of oil (WTIC).

It is now pretty much the same price in sterlings as it was Oct '07. The '08 inflationary ramp up to $147 and subsequent powerful deflationary collapse to $3x have worked their way through.

It is lower than it was this time last year, so the crash-phase deflationary influence of the bungeeing oil price appears to have been mitigated. It is still lower than last August/September so there can't be much y-o-y inflationary force from oil/stuff linked to oil.

We'll have to wait and see what happens to both the price of oil and sterling and whether that relationship holds. Perhaps if sterling is topping out v dollar then oil is also about to move lower.

http://stockcharts.com/h-sc/ui?s=$WTI...id=p53117074440

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Merv and friends publish the inflation report tomorrow at 10.30am http://www.bankofengland.co.uk/publication...endar/index.htm

I assume that inflation (on CPI) fell this month. The question is can it for much longer? The weak pound (and even with its rally it is historically weak) will raise the price of imports an commodities.

Bear in mind that the CPI has risen for the last 5 months:

FEB 09 = 109.6

MAR 09 = 109.8

APR09 = 110.1

MAY 09 = 110.7

JUN 09 = 111.0

Yes - prices are going up.

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Yes, I wonder where they have put their pension pots for long-term security :rolleyes:

Think it might all be in index-linked gilts to match the liabilities.

EDIT: Sorry, prev post beat me to it. Using index linked gilts doesnt necessarily mean they anticipate inflation- it is the best way to match a liability which is linked to RPI

Edited by Toilet-Currency

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I have already had a look at the national statistics office website and their stats. Looking at their RPI data, positive RPI should return at a fairly robust level in November / December time, even without the VAT increase. Underlying RPI excluding mortgage interest and indirect taxes has been increasing all year. Once last years figures drop out, any risk of deflation will be gone. The thing is nobody will have seen it coming when it does, even though the stats show that now.

So you think that inflation wise we are going to be in for a shock in Nov / Dec?

Isn't Sept the month a lot of govt agencies get their wages pegged to? Clearly in govt interest to get inflation down for then.

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