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Cpi Weighting

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Clearly there's a lot of distrust as to the current rate of inflation and the CPI on which it is based.

The weighting of some of the various costs when making up the total CPI makes it seem all the more suspicious...

1. Personal Transport fuel was weighted at 43 parts per 1000 in 1997, in 2005 it only accounts for 27 parts per 1000.

2. New car prices, which have fallen below inflation in recent years, accounted for 12 parts per 1000 in 1995, in 2005 it is 33.

3. Electric, Gas and other household fuel was weighted at 44 parts per 1000 in 1997 not it is only 28

http://*******.com/age96

The weighting allows the government to manipulate the CPI rate at will.

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How on earth can new cars have a greater weighting than domestic bills??

Everyone needs to buy new cars, whereas no-one needs to heat their house. Of course we don't need to buy petrol for all those new cars either.

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So basically, the things we have to buy, and which are going up the most, are having their weighting reduced, while areas in which we are more able to cut back, and which are less subject to price rises because people are cutting back, are being given more weighting. Looks like nothing more than one big corrupt scam to make the government look good.

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So basically, the things we have to buy, and which are going up the most, are having their weighting reduced, while areas in which we are more able to cut back, and which are less subject to price rises because people are cutting back, are being given more weighting. Looks like nothing more than one big corrupt scam to make the government look good.

and things we can't avoid like council tax aren't in there at all

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It is awareness of precisely this kind of information that makes this forum such a valuable asset.

If anyone has the time, could I request they tabulate and thus recalculate the data with 1997 weightings?

That would be of immense value to all of us.

cheers

[edit] oh sorry there doesn't seem to be any inflationary values attached to the yearly figures. Looks like it may take a little research [/edit]

Edited by ?...!

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It is awareness of precisely this kind of information that makes this forum such a valuable asset.

If anyone has the time, could I request they tabulate and thus recalculate the data with 1997 weightings?

That would be of immense value to all of us.

cheers

[edit] oh sorry there doesn't seem to be any inflationary values attached to the yearly figures. Looks like it may take a little research [/edit]

Why doesn't somebody construct an email and send it to:

Sharon Nevill

Office for National Statistics

Consumer Prices and General Inflation Division

D2/20, 1 Drummond Gate, London, SWIV 2QQ

Tel: 020 7533 5822

E-mail: sharon.nevill@ons.gsi.gov.uk

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and things we can't avoid like council tax aren't in there at all

No :( It's time the government were regulated. They should be made to pick an accurate way of measuring inflation and then to stick to it. It's quite ironic how our government goes swanning off to the Middle East with Uncle George to play god yet treat us so disgustingly.

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Making the BOE independent only gets us half way there. The weighings ought to be in the hands of an independent body as well.

There has been much talk over a long period of the government massaging figures to show a lower inflation rate then should actually be accounted for.

The problem is - what exactly economically has this done to this economy. I have seen no real ill affects apart from borrowing which is also a world issue.

It seems to me that prices rising in areas unrepresented in the CPI will affect the wage packet more than anything. Wages will not rise in line with actual inflation thus less money to spend. I personally have not found this much of an issue on £35k a year, i drive, eat well and can afford to rent with money to spare in the bank also paid off a student loan and in the south east. With this trend (the world economies aiming for low inflation but economic growth) we could go on indefinitely, it is kind of like a stealth tax.

am i missing the bigger picture here.. how long would it take for something to give if the government carried on doing this and what would be the catalyst, can someone please help me understand.

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There has been much talk over a long period of the government massaging figures to show a lower inflation rate then should actually be accounted for.

The problem is - what exactly economically has this done to this economy. I have seen no real ill affects apart from borrowing which is also a world issue.

It seems to me that prices rising in areas unrepresented in the CPI will affect the wage packet more than anything. Wages will not rise in line with actual inflation thus less money to spend. I personally have not found this much of an issue on £35k a year, i drive, eat well and can afford to rent with money to spare in the bank also paid off a student loan and in the south east. With this trend (the world economies aiming for low inflation but economic growth) we could go on indefinitely, it is kind of like a stealth tax.

am i missing the bigger picture here.. how long would it take for something to give if the government carried on doing this and what would be the catalyst, can someone please help me understand.

the bigger picture is that massaging the figures doesn't make inflation go away - the value of your savings have eroded, real incomes diminish -we are in fact poorer then we were before. We can still spend a lot because of loose credit. We might have to pay it back one day.

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the value of your savings have eroded, real incomes diminish

And investment in productive industries has been gutted in favor of 'investment' in bricks and mortar.

The UK will be paying for Brown's mess for decades to come.

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Pensions are trashed and companies are forced to put more money in to support them or cut back on investment in the future.

Companies can see what is happening and move to other locations where it is is cheaper and where the economic fundamentals are better.

Running your country on false cheap credit is not economically sound and invariably leads to a bust, another reason why companies are very wary of investing.

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Also interesting to note that as these weightings move towards discretionary (rather than neccessities) purchases it further fudges the figures, as in times of economic downturn the prices of discretionary goods often fall initially in order to keep market turnover high.

See cars for a good example. The government weights costs towards new cars.... just as new car prices are falling and sales volumes are decreasing.

If the CPI weightings were to be fair then they would be based purely on the current volume of trade in those particular goods (possibly seasonally adjusted).

Moving the weightings towards deflationary items that we are buying in decreasing quantities is just too obvious, but still Joe Public dosen't see it :blink:

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It appears the BoE are keeping rates artificially low.

Inflation has been fudged and is being allowed to erode the currency.

We are all becoming poorer.

It has not eroded debt as that would require wage inflation. However if anyone reading this has a big pile of cash savings you may be well advised to move away from holding sterling.

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Guest Guy_Montag

How do there weightings compare with those used in other (western european) countries?

Can we take out (someone that can be bothered, I can't) all non-essentials & rescale to 1000 then calculate essential goods & services inflation?

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If Gordy Brown trousers is massaging the figures he'll be digging himself one huge hole. The controls of inflation and interest rate setting are put in place for the greater good of the economy. Ignoring those rules for short term gain spells long term disaster.

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If Gordy Brown trousers is massaging the figures he'll be digging himself one huge hole. The controls of inflation and interest rate setting are put in place for the greater good of the economy. Ignoring those rules for short term gain spells long term disaster.

That's my opinion too. What's the point of having an inflation measure, if it's ineffective?

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What's the point of having an inflation measure, if it's ineffective?

It's effective at keeping wage inflation low, which is all that Brown really cares about.

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and things we can't avoid like council tax aren't in there at all

Even the ever-inflating TV licence has now gone as it's classified as a tax.

I expect a measurement of house prices will be reincluded once they're YoY negative, anything to further the deflation myth.

It's effective at keeping wage inflation low, which is all that Brown really cares about.

Indeed, low inflation = low rates = cheap gilts

It also means increases of government expenses like wages and state pensions can be kept low, though the former hasn't exactly been subdued and has actually kept the wage inflation figures buoyant.

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It's effective at keeping wage inflation low, which is all that Brown really cares about.

Hahaha, but for how long!! What an idiot.

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Sharon Nevill

Office for National Statistics

Consumer Prices and General Inflation Division

"Dear Sharon,

Are you aware that all your figures are cooked? Btw, I hear it's warm as an oven where you are but it's cold here (I can't afford to turn the heating on)

Yours faithfully,

Willfully Duped."

There was a programme on R4 about this a couple of weeks back, the ONS doesn't have a direct press officer of its own, everything has to go through a political appointee and government press office, the Treasury also gets to see all figures in advance (as the ONS is part of HM Treasury).

In terms of probability you're more likely to reveal the true inflation figures by using a dartboard. I'm amazed the City guys go along with this sham, in fact they take it one step further and just talk about the "core rate" which excludes energy and food, but the City likes low interest rates and easy money so they comply.

This sort of thing makes the ERM crisis appear sublime.

[low wage inflation]

Hahaha, but for how long!! What an idiot.

For as long as we have a weak labour market with rising unemployment, and workers also remain fearful of outsourcing or migrant labour.

This really is a new paradigm, and the BoE have recognised this but it seems their new models don't seem to take into account what eventually happens when you have rising taxes, static incomes, hyperinflation in essential services and utilities and the lack of new MEW money, not to mention the burden of paying it all back.

They've succeeded in doing in doing the Indian rope trick, for now, but we'll go fall if the US stumbles.

Edited by BuyingBear

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  • 302 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% +
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      • Even
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      • up 5%



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