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Why The Real Rate Of Inflation Is Twice What The Official Figures Tell Us

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"One issue is the way the consumer price index (CPI) - the one Gordon Brown chose to give the Bank - excludes items that are closest to people's wallets."

Why did he bother making the BOE 'independent'?

"...a belief that inflation is high and rising will inevitably influence demand for higher pay - and create a vicious inflationary cycle."

...as we speak

"The pattern of price increases and decreases has favoured people who buy goods rather than services, so although that includes kids' shoes and clothes, the big gainers are young people living at home and buying iPods and computers." "

Target demographic for the next election?

Edited by dnd

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http://news.bbc.co.uk/1/hi/business/5073866.stm

"But he stressed inflation was on target and was not yet "a serious concern". "

"Nevertheless, he said UK inflation was close to the government's 2% target and that wage pressures remained muted."

Personally, I think this guy is HOPING it all works out and he's SCARED of raising interest rates and it's ripple effect

These bodged inflation figures are a pathetic attempt to maintain control of the situation and it's all going to crash around his ears when he has to start enevitably raising IR

If you look at the picture on the BBC article - you can actually see the bead of sweat running down his forehead

:lol:

Edited by dnd

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So that he can control rates without taking the flak for it?

Nice one - but still maintain control through rigged inflation figures....

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Also that people who get a 3% wage rise will get an 'above inflation' rise. Fiscal drag appears less than 'official'.

If rates rise/falls and causes a recession/hpc crash, you can bet the the MPC will get blame and not Gordon. And who is credited with the 'miracle economy'? The MPC? The previous Tory government? Nope: GB. Sounds like a good deal for him...

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"sharp jump in the number of people who believe inflation is above 5 per cent. More than one in six - 16 per cent - said they thought inflation was above 5 per cent and expect to stay above that level."

We need more articles like the Independent one - but will Sun readers understand the concept of 'real inflation' is the question?

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He (David Blachflower) said he was particularly concerned by a sharp jump in the number of people who believe inflation is above 5 per cent. More than one in six - 16 per cent - said they thought inflation was above 5 per cent and expect to stay above that level.
A survey of 38 UK economists by Reuters last month found 14 thought the CPI did not reflect the real rate of price increases experienced by consumers.

So now The Independent is going to publish a "non-discretionary" inflation index..

Is this the beginning of the end for CPI?

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Wage inflation is a big issue for GB - he's got to make sure the ball never starts rolling - if the masses get their heads around 'real inflation' it's going to be a problem - do the press have a large part to play in the economy?

He is desperate to keep his public sector wage bill under control and avoid future union trouble so he might capitulate and 'allow' a couple of rate rises - but that will affect his MEW voters - tricky situation

Edited by dnd

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Wage inflation is a big issue for GB - he's got to make sure the ball never starts rolling - if the masses get their heads around 'real inflation' it's going to be a problem

He is desperate to keep his public sector wage bill under control and avoid future union trouble so he might capitulate on the inflation figures and allow a couple of rate rises - but that will affect his MEW voters - tricky situation

Ahh, but he won't be raising the rates... he'll just be giving workers a pay rise. What a nice chap! Not like the bad MPC making our mortgages more expensive. How did CPI jump 1% this month again?

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The real reason inflation is up is chips...

http://www.metro.co.uk/weird/article.html?...45&in_page_id=2

The cost of potatoes has doubled in the past two months, forcing the price of one of the nation's favourite snacks to reach an all-time high.

Price-sensitivity is very important

Chippies throughout the country are being forced to charge up to £5 for a standard serving of fish and chips.

Rick Horabin, who runs Seniors Fish Shop in Blackpool, said: 'The price of cod has doubled to about £40 a stone [6kg] and potatoes have gone up by a similar amount in a matter of months. It makes it very tough on business.'

The British Potato Council said: 'Fewer potatoes were planted last year due to poor prices in previous years.'

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Another thing from the article -

"A survey of 38 UK economists by Reuters last month found 14 thought the CPI did not reflect the real rate of price increases experienced by consumers."

That means that 24 of them are of pretty poor quality if they cannot see real non discententary inflation is over 4%!

If the paper prints a REAL INFLATION RATE every month its sales would soon start rising!

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Also that people who get a 3% wage rise will get an 'above inflation' rise. Fiscal drag appears less than 'official'.

But Brown said the government would take steps to keep pay growth down, potentially setting him on a collision course with public sector unions.

"Let me say that even as we cope with a doubling of oil prices and the rises in utility prices we will maintain our vigilance against inflation," he said.

"I have already made it clear that just as public sector pay settlements are this year averaging 2.25 percent, in the next year and future years public sector pay settlements should be founded on our inflation target of 2 percent."

what did i tell you? :P

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"sharp jump in the number of people who believe inflation is above 5 per cent. More than one in six - 16 per cent - said they thought inflation was above 5 per cent and expect to stay above that level."

We need more articles like the Independent one - but will Sun readers understand the concept of 'real inflation' is the question?

Nope. Sun readers can't even understand the concept of real t1ts! :lol::lol::lol:

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Labour thinks that the minimum wage should rise by 39% (thirty-nine percent, yep, that is no typo)

Funny that.

----------------------------------------------------------------------------------------

Souce: http://news.independent.co.uk/uk/politics/article878452.ece

Pressure grows for a £2 rise in minimum wage

By Andrew Grice, Political Editor

Published: 13 June 2006

Pressure is growing in the Labour Party for the Government to turn the £5.05 an hour minimum wage into a "living wage" of more than £7 an hour.

The proposal will be included in an "alternative manifesto" to be drawn up by Labour activists. Although ministers are worried about the burden it would impose on industry, Hazel Blears, the Labour chairman, is happy for party members to discuss it as they debate long-term policy for a future Labour government.

Supporters argue that the national minimum wage introduced in 1999, fails to take account of high living costs in areas such as London. They say many poor families receive government tax credits to top up their wages and want these payments to be funded by employers rather than taxpayers.

"If companies want people to do a job, why can't they pay them a wage to live on?" said Neal Lawson, who chairs Compass, a pressure group which is drawing up an alternative Labour programme that will include a living wage. "This is a coming issue," he said.

Some firms have already voluntarily signed up to a £6.70 an hour "London living wage" in response to a campaign whose backers include Ken Livingstone, the Mayor of London, and trade unions. Supporters are urging a £7.05 an hour wage in the capital, saying that 400,000 workers are caught in a "working poverty gap".

Employers will fight the proposal. Susan Anderson, the CBI's director of human resources policy, said: "We already have a national minimum wage which is designed to provide a basic level of earnings and eliminate unacceptably low pay where it existed in a few sectors. With this in place, plus the tax credits system, a national living wage is not needed.

"It would be almost impossible to set because of all the factors involved and there are already other mechanisms, such as tax credits, in place to address wider social policy objectives without passing the cost on to employers. Business has already had to absorb the minimum wage and its recent higher-than-inflation increases. Adding an even higher living wage would simply be unaffordable."

The issue will be discussed on Saturday when Compass stages a conference on future policy which will also commemorate Robin Cook, the former cabinet minister who died last August. Blairites, such as Ms Blears, and Brownites, such as Ed Balls, the Economic Secretary to the Treasury, will debate Compass's alternative programme with supporters who will demand a bolder approach.

Mr Blair is to stress the Government's commitment to tackling poverty by setting up a new task force to target a hard core of one million people. It will report to Hilary Armstrong, the cabinet minister responsible for addressing social exclusion, who will chair the first meeting of a new cabinet committee on the issue today.

The Social Exclusion Unit will be scrapped, with staff transferring to the Cabinet Office to join forces with members of the Downing Street Strategy Unit to form the new task force.

Ms Armstrong's priorities will include children in care, long-term claimants of incapacity benefit, teenage pregnancies, the long-term mentally ill and antisocial behaviour.

Sir Menzies Campbell, the Liberal Democrat leader, will tell the CBI's annual general meeting today that the Government is failing because of its "control freakery". He will say: "Underlying the Government's growing problems is a fundamentally flawed approach to management which rests on controlling everything from the centre. Micro-management by politicians from Whitehall is inefficient and ineffective. No successful business chief executive would try to control every aspect of their operating companies' activities. But Brown and Blair are both avid centralisers."

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If they made the minimum wage enough so they didn't have to pay tax credits then what level would it be at?

And are there companys in the UK who'd want to pay it? Are there companys who'd manage to stay afloat paying more wages?

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If they made the minimum wage enough so they didn't have to pay tax credits then what level would it be at?

And are there companys in the UK who'd want to pay it? Are there companys who'd manage to stay afloat paying more wages?

Can you give me one reason why the taxpayer should subsidise a failing business by paying part of the outstanding wages in form of tax credits?

If you work 8 hours a day, you should make enough to be better off than on the dole.

As for the level, it looks like they figure that a 39% increase is needed to match the 1999 standards. Which is a rather honest admission about the real inflation going on, no?

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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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