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Cpi Could Bite Back

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A lot has been said on this site about CPI and how it makes inflation look better than it really is. Well I read an artical the other day (sorry cannot remember where) that suggested that actually that might be about to change.

No not because GB is about to change the inflation meassure again (although he might be) but because CPI is about to become rather more lively than we have seen so far. :) Why? Because fuel has a very strong impact on CPI. We have already seen that it rose sharply this month and with oil still accelerating away and likely to do so for a couple of months yet I think we will see CPI rise quite fast over the next few months.

Remember also that last years oils rises will start to feed through into manufactured goods as well, and those prices will not slow anytime soon because oil has increased rapidly all this year as well (close to 50% YOY). Inflation could be about to make a very strong come back! For how long is uncertain, but my guess is for quite sometime, because if China and India continue to suck in oil at their present rate then demand will very soon completely out pace supply. As oil is used in the production of everythng from food, to clothes, all prices will rise.

Inflation is back. Probably for quite sometime and when the central banks recognise that publically you will know that IR's are about to go up and stay up as the fight against inflation is resumed.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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