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As this is Decs figures, this doesn't include VAT going back up to 17.5% either. That's going to cause another massive leap next month !!!

It now looks almost certain that CPI annual rate will go over 4% next month.

Incidentally, RPIX (which the BoE used to target at 2.5%) is now at 3.8% and could well go over 5% next month.

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That's massive for 1 month. And no VAT rise yet.

Is this linked to QE or is there something else at play?

When you annualise the CPI from those last two months you get a really scarey figure over 20%.

Just trying to get my head around the way they work out the CPI. They compare the CPI between months this year and last, not this month to last....and we already know that when they compare it next month, they will get another high figure next month because prices increased immensly from february 2009, so wont we expect a 2% increase each month for the next 11 months as we know what prices were a year ago, and we know the prices today, if prices stay the same but we roll forward time - they CPI / RPI is going through the roof?

Edited by STRLondon
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Actual Forecast Previous Commentary

09:30 GBP Consumer Price Index (MoM) (DEC) 0.6% 0.3% 0.3%

09:30 GBP Consumer Price Index (YoY) (DEC) 2.9% 2.6% 1.9%

09:30 GBP Core Consumer Price Index (YoY) (DEC) 2.8% 2.3% 1.9%

09:30 GBP Retail Price Index (DEC) 218.0 217.3 216.6

09:30 GBP Retail Price Index (MoM) (DEC) 0.6% 0.3% 0.3%

09:30 GBP Retail Price Index (YoY) (DEC) 2.4% 2.1% 0.3%

09:30 GBP Retail Price Index Ex Mort Int.Payments (YoY) (DEC) 3.8% 3.5% 2.7%

for a more detailed breakdown. Ouch, look at RPI ex mortgages 3.8%, here come the rate rises, GBP stronger on the crosses in expectation of this.

http://www.dailyfx.com/calendar/

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Yeah, yeah, yeah, Redhat - BoE have been purposefully underestimating inflation for as long as I can remember - it's part of their perverse strategy.

Heaven knows how high it's going to climb. Friggin joke!

What a shocker. Protect yourselves people!

Edited by gruffydd
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I do hope not - that will really bugger Labour up heading into a GE! biggrin.gif

If CPI goes up to 3.5-4% next month (which is likely given the VAT increase), people are going to be getting very worried about out of control inflation.

No doubt the BBC will soon roll someone out to tell viewers to buy as many houses as you can instead of having cash.

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It just makes you wonder why these "highly paid eonomists" cannot see what is happening. I, along with a few others have been banging on about inflation increases for the last year. The official figures all showed it, there is no surprise. The only surprise is just how stupid the economists are who only read the YOY figure, and look no further. I bought NS&I bonds in September and they begin tracking the index about 3 months before that.

QE is destroying the currency and making us all poorer.

Edit - typos

Edited by BalancedBear
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It just makes you wonder why these "highly paid eonomists" cannot see what is happening. I, along with a few others ahve been banging on about inflation increases for teh last year. The official figures all showed it, ther eis no surprise. The only surprise is just how stupid the economists are who only read teh YOY figure, and look no further. I bought NS&I bonds in September and they begin tracking the index about 3 months before that.

QE is destroying the currency and making us all poorer.

They are liars.

Quite simple really.

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