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Uk Inflation Rate Rises To 0.1%

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http://www.bbc.co.uk/news/business-33971890

The UK's inflation rate turned positive in July, with the Consumer Prices Index measure rising to 0.1% from June's 0%.

A smaller fall in the price of clothing was the main reason for the rise, the Office for National Statistics said.

The Retail Prices Index measure of inflation was unchanged at 1% - the figure that will be used to calculate rail fare increases next year.

CPI has been almost flat for the past six months, having turned negative in April for the first time since 1960.

The ONS said falling food and non-alcoholic drink prices partially offset the positive impact of the smaller rise in clothes prices.

Great news, prices going up....

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So £10 now only buys you £9.99 worth of stuff.

OH well it did until on hearing the news the pound went up 0.8% against the dollar so now £10 can buy you £10.07 worth of stuff.

Every body moving into the pound because they think interest rates may go up 0.25%.

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Can anyone explain how we can have essentially zero inflation, yet low unemployment and be in the 4th year of a recovery? Forget sarcasm for a moment, but isn't low inflation down to low demand for stuff? If demand was higher, prices could go higher, and retailers would earn more, so could pay more to get the best staff. All of that sounds like a recovery to me. Yet we have low productivity (lower than 2007) because demand is low. Why is demand low if we're in a recovery? Why aren't Tesco and Morrisons recovering too - with all the feel-good factor you'd expect being into a 4th year of a recovery?

Is it because GDP is the only metric used to determine if we're in a recovery or not? And that adding 500,000+ consumers to the economy every year will inevitably bump up GDP? But at the same time, productivity can fall (because productivity is based on numbers of people) - GDP-per-capita can fall (but we never count that).

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Ignore headline CPI.

Core CPI was 1.2% v 0.9% consensus.

Wages strong. Productivity increasing.

Theres a huge difference between a +ve energy supply shock (which this is) & a demand crisis (which this isnt, at least not yet).

We havent even started the boom phase yet........

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Terrible news for the supermarket majors this deflation in food prices. I read Morrisons may spin off the convenience arm. Alo asda numbers for quarter were terrible.

Word is those that are caught up in the recovery are spending money on eating out more. Those at the lower end squeezed. Seems like a doomsday/end of days situation ?

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Wages strong. Productivity increasing.

Theres a huge difference between a +ve energy supply shock (which this is) & a demand crisis (which this isnt, at least not yet).

We havent even started the boom phase yet........

FTBs - time to get your wallets out!

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In my area I'm starting to see 113p litre unleaded. I think from memory that's within expectations for the MPC. Hopefully this time we'll go below £1 a litre unleaded. Looking forward on the horizon are expected gas , electricity and continued food price cuts. China is a worry but imagine it'll mean even cheaper products (clothes, tech,etc) ?

Not sure on further out though. Possibly the CPI index itself might become more of an issue e.g. they are increasingly looking at the core CPI...

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