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Inflation 'is Higher For The Poor Than For The Rich'

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http://www.bbc.co.uk/news/business-13757680

People on low incomes have suffered higher inflation than those on higher incomes in the past decade, the Institute for Fiscal Studies has said.

The IFS said that the difference had been particularly strong since 2008.

The poorest 20% of households faced an average annual inflation rate of 4.3% between 2008 and 2010, while the richest 20% only had a rate of 2.7%.

People on lower incomes spend more of their money on gas, electricity and food, which have risen sharply.

At the same time, people with higher incomes have benefited more from lower mortgage rates.

Pensioners have experienced higher inflation than non-pensioners and pensioners relying on state benefits have been hit particularly hard.

Inflation inequality means, "that poorer households will have fared worse over the period of the recession than poverty and inequality statistics that don't account for these differential inflation rates would suggest," according to Peter Levell from the IFS.

And the prize for rocket science goes to????

I think the annual inflation rate for the poor will be a lot higher, especially if you weight gas/electric/food more.

Still a nice easy paper to write.

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This is why the tories are remarkably tolerant of inflation

The people who suffer from it dont vote for them

I think it was brown who tried to fiddle and change inflation targeting from RPI to CPI to begin with and then

in cohort to BoE to do a ZIRP for an extended period of time..

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http://www.bbc.co.uk/news/business-13757680

And the prize for rocket science goes to????

I think the annual inflation rate for the poor will be a lot higher, especially if you weight gas/electric/food more.

Still a nice easy paper to write.

relative but not absoulte inflation is higher for the poor.

You can double the price of something that costs 5p. Inflation is then 100% but the price of it is still only 10p.

You can put the price of an entry level car by 1000 pounds and the inflation is 10%

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I think it was brown who tried to fiddle and change inflation targeting from RPI to CPI to begin with and then

in cohort to BoE to do a ZIRP for an extended period of time..

Difficult to argue that brown and the BoE agreed on anything surely

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Difficult to argue that brown and the BoE agreed on anything surely

And surely BoE is totally independent... (and also the few treasury representative who sits on MPC...)

and if memory serves me well, I think Gordon also took credit for keeping interest rate low...

and from this MSE interview, he said:

If interest rates rise back to 5% levels this will leave many on 8-9% mortgages. What will you do now and in the future to ease this potential financial disaster?

Gordon Brown's answer: "We will do all we can to keep interest rates low. We have put special arrangements in place to keep mortgages flowing and we have introduced new support for first time buyers during the recession, as well as a wide range of extra help for anyone struggling to keep up with their payments."

http://www.moneysavingexpert.com/news/family/2010/04/mse-leaders-debate-what-will-labour-do-for-your-wallet

and Brown was an economist...

Edited by easybetman

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And surely BoE is totally independent... (and also the few treasury representative who sits on MPC...)

and if memory serves me well, I think Gordon also took credit for keeping interest rate low...

and from this MSE interview, he said:

If interest rates rise back to 5% levels this will leave many on 8-9% mortgages. What will you do now and in the future to ease this potential financial disaster?

Gordon Brown's answer: "We will do all we can to keep interest rates low. We have put special arrangements in place to keep mortgages flowing and we have introduced new support for first time buyers during the recession, as well as a wide range of extra help for anyone struggling to keep up with their payments."

http://www.moneysavingexpert.com/news/family/2010/04/mse-leaders-debate-what-will-labour-do-for-your-wallet

and Brown was an economist...

re. Kings outspoken praise for conservative election promises about one year ago?

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re. Kings outspoken praise for conservative election promises about one year ago?

BoE is just an arm of the government and will support the existing government policies (may that be Labour or Conservative)

and may that be ZIRP or strong currencies or whatever else...

If Brown (pre May 2010, or Georce, now) wanted a rate rise, they would have got it. However, to both man, inflating the way

out is the most attractive political choice.

Edited by easybetman

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And surely BoE is totally independent... (and also the few treasury representative who sits on MPC...)

and if memory serves me well, I think Gordon also took credit for keeping interest rate low...

and from this MSE interview, he said:

If interest rates rise back to 5% levels this will leave many on 8-9% mortgages. What will you do now and in the future to ease this potential financial disaster?

Gordon Brown's answer: "We will do all we can to keep interest rates low. We have put special arrangements in place to keep mortgages flowing and we have introduced new support for first time buyers during the recession, as well as a wide range of extra help for anyone struggling to keep up with their payments."

http://www.moneysavingexpert.com/news/family/2010/04/mse-leaders-debate-what-will-labour-do-for-your-wallet

and Brown was an economist...

err no he wasnt, hes an historian, of the Labour Party in fact, not sure where this bollarcks about him being an economist comes from, having said that having an economist run any country or decide its economic path wont help if all the economist cares about is themself

Edited by georgia o'keeffe

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err no he wasnt, hes an historian, of the Labour Party in fact, not sure where this bollarcks about him being an economist comes from, having said that having an economist run any country or decide its economic path wont help if all the economist cares about is themself

You are correct - he is a historian. Stand corrected. Thank you.

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may that be Labour or Conservative

I love the way you pretend they are in some way different parties.

Policies are the same, people pulling the strings are the same. they are the same party.

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  • 311 Brexit, House prices and Summer 2020

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      • down 5% +
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