" U K Prices Falling At Record Rate"

[Realistbear]

http://www.telegraph.co.uk/finance/finance...ed-to-show.html

UK prices falling at record rate, new figures are expected to show

Prices across the British economy are falling at their fastest rate on record, official figures are expected to show on Tuesday.

Published: 8:34AM BST 18 Aug 2009

Economists forecast that figures from the Office for National Statistics will show that the Retail Price Index (RPI), the broadest measures of prices in the economy, was 1.7pc lower in July than the same month in 2008. RPI is also predicted to have dropped 0.2pc from June.

The figures will underline some experts' concerns that the economy has not yet fully extinguished the prospect of a deflation trap in which prices and typically wages fall while the value of debts remain the same..../

Assett prices about to crumble into the dust. Overpriced houses and high mortgages will suffer the most. We are going Japanese and it makes sense given the trillions that have dissappeared on Brown's decade of imprudence.

[Potwalloper]

Lower wages for Sibley with the same debt.

Lovely.

[red]

Assett prices about to crumble into the dust. Overpriced houses and high mortgages will suffer the most. We are going Japanese and it makes sense given the trillions that have dissappeared on Brown's decade of imprudence.

Ssshhh! Don't tell Daddy Bear!

I'm still yet to be convinced either way, tbh...

[awaytogo]

http://www.telegraph.co.uk/finance/finance...ed-to-show.html

UK prices falling at record rate, new figures are expected to show

Prices across the British economy are falling at their fastest rate on record, official figures are expected to show on Tuesday.

Published: 8:34AM BST 18 Aug 2009

Economists forecast that figures from the Office for National Statistics will show that the Retail Price Index (RPI), the broadest measures of prices in the economy, was 1.7pc lower in July than the same month in 2008. RPI is also predicted to have dropped 0.2pc from June.

The figures will underline some experts' concerns that the economy has not yet fully extinguished the prospect of a deflation trap in which prices and typically wages fall while the value of debts remain the same..../

Assett prices about to crumble into the dust. Overpriced houses and high mortgages will suffer the most. We are going Japanese and it makes sense given the trillions that have dissappeared on Brown's decade of imprudence.

Lower rents, all part of the big adjustment the goverment need to get prices back to normal.?

[BalancedBear]

This is the same old cracked record. Of course RPI is showing deflation because it includes the VAT reduction, falling rents, falling interest rates and falling oil prices since the peak last year. CPI is however not falling, and RPI will start jumping come the end of the year, and nobody will have seen it coming.

[Neverland]

This is the same old cracked record. Of course RPI is showing deflation because it includes the VAT reduction, falling rents, falling interest rates and falling oil prices since the peak last year. CPI is however not falling, and RPI will start jumping come the end of the year, and nobody will have seen it coming.

I agree with you apart from one point, the rate of increase in CPI is falling quite rapidly and the BOE expects CPI to fall to below 1% soon, which is quite an interesting development

[Realistbear]

Lower rents, all part of the big adjustment the goverment need to get prices back to normal.?

http://www.timesonline.co.uk/tol/news/poli...icle6799637.ece

From The Times

August 18, 2009

Social housing plans to be abandoned as Government cuts tenants’ rents

Crashing rents are just a part of the deflationary monster.

This may trigger a rush to sell by anyone who has BTL.

Edited August 18, 2009 by Realistbear

[Joey Buttafueco Jr]

http://www.telegraph.co.uk/finance/finance...ed-to-show.html

UK prices falling at record rate, new figures are expected to show

Prices across the British economy are falling at their fastest rate on record, official figures are expected to show on Tuesday.

Published: 8:34AM BST 18 Aug 2009

Economists forecast that figures from the Office for National Statistics will show that the Retail Price Index (RPI), the broadest measures of prices in the economy, was 1.7pc lower in July than the same month in 2008. RPI is also predicted to have dropped 0.2pc from June.

The figures will underline some experts' concerns that the economy has not yet fully extinguished the prospect of a deflation trap in which prices and typically wages fall while the value of debts remain the same..../

Assett prices about to crumble into the dust. Overpriced houses and high mortgages will suffer the most. We are going Japanese and it makes sense given the trillions that have dissappeared on Brown's decade of imprudence.

Have you ever let the truth get in the way of a good story?

[Realistbear]

The recession has ripped from many businesses the abiliy to lift prices, and it's being mirrored across much of the developed world. Consumer prices in America slipped by 2.1pc in the year to July, according to official data released last week.

It coincided with Eurostat figures showing that the eurozone's consumer price index dropped by 0.7pc in the past year, compared with deflation of 0.1pc in June.

And its not just in Brown's world that it is happening. Deflation, once it gains a foothold, takes decades to remove. Japan is the case in point. Unemployment will exacerbate the rate of deflation as spending power collapses, rents plummet and banks cut bnack even further on loans. You could say deflation is more self-perpetuating than even the most rampant inflation.

_____________________________

http://www.telegraph.co.uk/technology/vide...late-sales.html

Sony may cut PS3 price to stimulate sales

Multiply this accross millions of products and brands and voila! Deflation.

Edited August 18, 2009 by Realistbear

[aardvark]

and yet my food bill continues to go up week on week - deflation my ****!

[grasshopper]

Just released. CPI 1.8%. RPI -1.4%

http://news.bbc.co.uk/1/hi/business/8206748.stm

[IMHAL]

Just released. CPI 1.8%. RPI -1.4%

http://news.bbc.co.uk/1/hi/business/8206748.stm

Damn - there goes another deflation theory out the window

[porca misèria]

Hmm. I should think the most important forward-looking indicator on any twelve-month measure is this one.

It would seem to indicate the current downward pressure ending in about December, followed by upward pressure.

More to the point, the mere fact that I can point to such twelve-month precipices is yet another demonstration of just how bogus the CPI/RPI are as targets for policy.

[BalancedBear]

The recession has ripped from many businesses the abiliy to lift prices, and it's being mirrored across much of the developed world. Consumer prices in America slipped by 2.1pc in the year to July, according to official data released last week.

It coincided with Eurostat figures showing that the eurozone's consumer price index dropped by 0.7pc in the past year, compared with deflation of 0.1pc in June.

And its not just in Brown's world that it is happening. Deflation, once it gains a foothold, takes decades to remove. Japan is the case in point. Unemployment will exacerbate the rate of deflation as spending power collapses, rents plummet and banks cut bnack even further on loans. You could say deflation is more self-perpetuating than even the most rampant inflation.

_____________________________

http://www.telegraph.co.uk/technology/vide...late-sales.html

Sony may cut PS3 price to stimulate sales

Multiply this accross millions of products and brands and voila! Deflation.

Surely deflation itself is nowhere near as bad as inflation. You can have hyper inflation, but the maximum deflation you could have is 100%, and then everything would be free. I don't see that happening! Mild deflation must be good for most people as their purchasing power increases. The only down side is servicing debt, but even if we did get long term deflation which we will not, goods and services getting cheaper would free up more cash to service debt.

Deflation is preferable to inflation higher than wage inflation, as everyone gets poorer. We have already had static wages and inflation which has brought our economy to its knees as people have taken on more debt to make ends meet. A bit of deflation to cancel out recent inflation is no bad thing. Inflation has been above target for a long time, just enough deflation to cancel out the amount of extra inflation above target would be a good thing.

I just do not understand why so many people on this site say house price inflation is bad, but feel inflation is everything else is good?? Japan is still a rich country even with a bit of deflation. Its economy is still huge. It may not have had much growth, but if they had deflation people got richer. The old chesnut about the economy grinding to a halt is rubbish too. Electrical goods get cheaper, but people still buy them. It is a myth to say that deflation causes people not to buy anything, as things get cheaper. The only people who want constant inflation is governments so they can keep robbong the prudent.

Edited August 18, 2009 by BalancedBear

[BalancedBear]

http://news.bbc.co.uk/1/hi/business/8206748.stm

CPI figures are out now and show no change. Economists are "surprised" by it. Nobody can see that inflation is still there. The banks and governments want reduce the value of people's paypakets to encourage them to take on more debt. That is all it is. Total spin.

[porca misèria]

Sony may cut PS3 price to stimulate sales

Multiply this accross millions of products and brands and voila! Deflation.

Sony is in the technology business, where prices have been falling rapidly for more than a generation.

http://bahumbug.wordpress.com/2009/03/07/d...-friend-or-foe/

Our powers-that-be have invoked deflation as a kind of ultimate economic bogeyman. Prices fall, so people don’t spend, but wait to buy cheaper. Economy grinds to a halt.

Can we find any evidence to test that theory? Actually, it’s very easy. Look anywhere in electronics. WebThing’s first desktop computer cost about £2000. About 10 years later, a replacement was in the region of £200, not to mention more powerful by a yet bigger margin. Computers have been falling in price for 30 years. Other electronics, such as phones or home entertainment kit, show similar patterns.

So which electronic industries have been choked by this “deflation� Apple? Nokia? Sony? But you don’t need me to list a whole bunch of global giants.

And in recent years, we’ve had lots of other price falls due to globalisation and cheap imports: the rapid rise of Asian countries, most recently China. Clothes, for example, are cheaper than a few years ago not only because we have Primark, but also in staid and conservative M&S.

The problem they’re scared of isn’t falling prices, it’s falling consumption. Or in an economy reliant on growth, even static consumption. So we must consume ever more. Consumption grows above income, so we have to borrow. Over time, the borrowing grows into a bubble that can never be repaid, leaving the lenders to take heavy losses. But we can’t stop borrowing ever more against illusory future income, because then we stop spending, and that’s the bogeyman deflation.

That’s where we are now. And there’s no way out.

Printing money won’t help: you haven’t added anything to the real economy, you’ve just debased it. More borrowing won’t help, when the only people who want to borrow are those who’ll never repay. More lending won’t help in a saturated market.

We have deflation, because a bubble is deflating. At the same time we have inflation, which the government is desperately trying to raise higher. And we have the bottom line: even when we’ve push inflation up to 1970s crisis levels (above 20%), we’ll still have the deflation. Because it’s not, nor ever was, about consumer prices!

Someone should explain biflation to our powers-that-be.

[Timm]

http://news.bbc.co.uk/1/hi/business/8206748.stm CPI figures are out now and show no change. Economists are "surprised" by it. Nobody can see that inflation is still there. The banks and governments want reduce the value of people's paypakets to encourage them to take on more debt. That is all it is. Total spin.

"It's only temporary"

Too bluddy right.

It's going to jump up in a few months, as other posters have already said.

[Timm]

"We have deflation, because a bubble is deflating. At the same time we have inflation, which the government is desperately trying to raise higher. And we have the bottom line: even when we’ve push inflation up to 1970s crisis levels (above 20%), we’ll still have the deflation. Because it’s not, nor ever was, about consumer prices!

Someone should explain biflation to our powers-that-be."

And there it is.

[BalancedBear]

"It's only temporary"

Too bluddy right.

It's going to jump up in a few months, as other posters have already said.

It sure is. It looks like buying NS&I indexed linked certs could be a great move in about November. As inflation climbs and we get the VAT increases added back in, it could be a great time to earn a bit extra tax free linking to RPI. That is what I plan anyway.

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

RPI has increased to -1.4% - from -1.6% in June, CPI has stuck at +1.8% - was widely predicted to fall to around 1.5%. The BoE and most economists are wrong AGAIN!

UK prices are no longer falling at June's record rate of -1.6% (RPI)

Edited August 18, 2009 by gruffydd

[AteMoose]

Its clearly BS...

RPI includes mortgage and rent, house prices have been falling and mortgage costs went down when IRs were cut. This is what is causing negative RPI, when IRs go up or 1 year after the IR cut this will cause an inflationary effect on RPI, causing to pop up like a cork out of a bottle. and remeber that RPI and CPI are being artificially lowered because of the VAT cut, the Vat Cut took .5 off both indexes.

The real rates if you account for the VAT cut are :

RPI : -1.2%

CPI : 2.3%

RPI will bounce MUCH higher from Dec onwards when the falling IRs are nolonger in the past 12 months figures.. (and higher still if IRs rise) I wont be surprised if RPI rises to 5%+ by feb next year, it could be much higher...

Edited August 18, 2009 by moosetea

[bearORbullENIGMA]

and yet my food bill continues to go up week on week - deflation my ****!

Really?

At least the price of bread is coming down.

The range of seedy, nutty breads that I usually buy has dropped from around

£1.80 to around £1.20. In fact, one of my favourite loafs has dropped from

£1.50 to £1.00 as of yesterday.

The tomato & garlic flatbread thingamajig has dropped from £1.29 to £1.00.

It may just be bread & serials though. Sure I read an article a few weeks ago about

the falling price of wheat.

[BalancedBear]

Really?

At least the price of bread is coming down.

The range of seedy, nutty breads that I usually buy has dropped from around

£1.80 to around £1.20. In fact, one of my favourite loafs has dropped from

£1.50 to £1.00 as of yesterday.

The tomato & garlic flatbread thingamajig has dropped from £1.29 to £1.00.

It may just be bread & serials though. Sure I read an article a few weeks ago about

the falling price of wheat.

Wheat may be down, but sugar is up. Overall food inflation is rife. It is not very scientific, but every week we buy two trolley bags of similar stuff in Tesco. Over a year ago it would cost me about £80, by December it was £100. Last week I paid £120. Deflation is a myth, and the fudged figures will soon come to an end.

[Minos]

Really?

At least the price of bread is coming down.

The range of seedy, nutty breads that I usually buy has dropped from around

£1.80 to around £1.20. In fact, one of my favourite loafs has dropped from

£1.50 to £1.00 as of yesterday.

The tomato & garlic flatbread thingamajig has dropped from £1.29 to £1.00.

It may just be bread & serials though. Sure I read an article a few weeks ago about

the falling price of wheat.

Man can't live on bread alone.

[ralphmalph]

Wheat may be down, but sugar is up. Overall food inflation is rife. It is not very scientific, but every week we buy two trolley bags of similar stuff in Tesco. Over a year ago it would cost me about £80, by December it was £100. Last week I paid £120. Deflation is a myth, and the fudged figures will soon come to an end.

You need to stop buying those brands. Sainsburys value butter is the same as Lurpack but cheaper.