Real Rate Of Inflation In The Uk

[rocket bear]

I really want to know if anybody knows of a measure of REAL inflation in the UK. Not the tosh that the government feeds us! Surely no one in the UK believes that inflation has been 2%. It is simple arithmetic, add up the increase in your day to day stuff...fuel, electricity, gas, public transport, council tax...all the stuff the government leaves out!

What is completely unacceptable is that they feed us these stupid figures, we know they do not include all the REAL cost affecting us in our daily live yet no one can press them for a REAL figure.

So if anyone knows of a REAL measure let me know - or what say we start one ourselves!

[dnd]

The current botched inflation figures are used by GB to keep interest rates low, borrowing high and keep Labour in office

When debt becomes unserviceable - thanks to REAL inflation and debt saturation - and global IR rises occur - the UK will one of the hardest hit...(have you seen our debt in relation to our European neighbours?)

[Blue Peter]

I really want to know if anybody knows of a measure of REAL inflation in the UK. Not the tosh that the government feeds us! Surely no one in the UK believes that inflation has been 2%. It is simple arithmetic, add up the increase in your day to day stuff...fuel, electricity, gas, public transport, council tax...all the stuff the government leaves out!

What is completely unacceptable is that they feed us these stupid figures, we know they do not include all the REAL cost affecting us in our daily live yet no one can press them for a REAL figure.

So if anyone knows of a REAL measure let me know - or what say we start one ourselves!

I think that the Independent did one a couple of weeks ago. There was a thread on it somewhere,

Peter.

[Bingley Bloke]

I don't know about an official method, but the joint account that me and the other half have for our basic living expenses is a good measure.

Each month we credit an account with money to cover food, gas, electricity, water, council tax, phone bills and TV license.

Three years ago a total of £300 a month was enough and after two or three months we'd have enough surplus to go out for a nice meal – Including taxi fares and wine.

Now we have to put in £470 a month. We've downgraded from branded items to supermarket's own brand stuff, cut our energy usage, etc. yet we actually go a bit overdrawn some months.

So, in three years, our basic living costs have gone up 56.6%. To get from £300 to £470 over three years you're looking at an annual increase of 16.15%... and that's factoring in the economising we've done! Without economising it would be significantly more!!

Inflation 2.2%?... MY AR$E!

[The Colour]

I really want to know if anybody knows of a measure of REAL inflation in the UK. Not the tosh that the government feeds us! Surely no one in the UK believes that inflation has been 2%. It is simple arithmetic, add up the increase in your day to day stuff...fuel, electricity, gas, public transport, council tax...all the stuff the government leaves out!

What is completely unacceptable is that they feed us these stupid figures, we know they do not include all the REAL cost affecting us in our daily live yet no one can press them for a REAL figure.

So if anyone knows of a REAL measure let me know - or what say we start one ourselves!

It's a little hard to pin down, as you can measure it in so many ways, but here is a good roundup:

http://globaleconomicanalysis.blogspot.com...heck-is-it.html

[Bear Goggles]

So, in three years, our basic living costs have gone up 56.6%.[/b]

Ah yes, but when you off set that against the number of (hedonically adjusted) iPods you could buy these days, you'll find that you're rich beyond your wildest dreams!

Edited June 29, 2006 by Bear Goggles

[Realistbear]

Watch sterling. Gordon's miraculous inflation figures and the "no need to raise IR" deception will not be boought by the markets.

Ben at the Fed had 2 choices:

A. Raise rates and suffer a recession in the medium term

B. Leave rates and face inflation and more pain in the long term

The Fed are going with A. Gordon is going with B. but will try to hide inflation by hoping sterling goes up enough to cover his rear end and if it does not work he will move the goalposts again to say the new paradigm permits 3% CPI.

[Realistbear]

Forgot to mention the uber-non-discretionary that Gordon has no doubt kept out of his CPI figures, WATER

http://news.bbc.co.uk/1/hi/business/4337187.stm

Water bills to rise still further

The new figure for 2005/06 takes inflation into account

Average household water bills in England and Wales will rise by

11.8%

, or £29, for the year beginning 1 April, the industry regulator Ofwat has said.

11.8% up. No inflation in the economy???

Edited June 29, 2006 by Realistbear

[assetpriceinflation]

Its the growth in the money supply (12.2%) minus growth in goods and services (2.5%ish) minus growth in population (0.2%?)

Rough calculation 9.5%

As capital is now fairly global there is an argument for trying to use global figures, whereas the figures above are UK.

Edited June 29, 2006 by assetpriceinflation

[San Fermin]

Its the growth in the money supply (12.2%) minus growth in goods and services (2.5%ish) minus growth in population (0.2%?)

Rough calculation 9.5%

As capital is now fairly global there is an argument for trying to use global figures, whereas the figures above are UK.

Good post api.

So real interest rates are -5%. That's a scandal.

GB has only got away with it because other countries have done the same. But it's getting more difficult to hide real inflation as the China effect is wearing off.

[Realistbear]

Good post api.

So real interest rates are -5%. That's a scandal.

GB has only got away with it because other countries have done the same. But it's getting more difficult to hide real inflation as the China effect is wearing off.

The word they use for negative real IR is "accomodative." It is what most of the world's central bankers are bringing to a rapid close as it has breathed life into the inflation monster (except in Gordon's miracle economy of course).

[warwickbloke]

I really want to know if anybody knows of a measure of REAL inflation in the UK. Not the tosh that the government feeds us! Surely no one in the UK believes that inflation has been 2%. It is simple arithmetic, add up the increase in your day to day stuff...fuel, electricity, gas, public transport, council tax...all the stuff the government leaves out!

What is completely unacceptable is that they feed us these stupid figures, we know they do not include all the REAL cost affecting us in our daily live yet no one can press them for a REAL figure.

So if anyone knows of a REAL measure let me know - or what say we start one ourselves!

I was surfing for answers & came across this, guess which year?

Labour Manifesto

"The New Britain"

The world wants it and would welcome it. The British people want it, deserve it and urgently need it. And now, at last, the general election presents us with the exciting prospect of achieving it. The dying months of a frustrating **** can be transformed into the launching platform for the New Britain.

A New Britain - mobilising the resources of technology under a national plan; harnessing our national wealth in brains, our genius for scientific invention and medical discovery; reversing the decline of the ******* wasted years; affording a new opportunity to equal, and if possible surpass, the roaring progress of other western powers while Tory Britain has moved sideways, backwards but seldom forward.

The country needs fresh and virile leadership. Labour is ready. Poised to swing its plans into instant operation. Impatient to apply the "new thinking" that will end the chaos and sterility. Here is Labour's Manifesto for the **** election, restless with positive remedies for the problems the Tories have criminally neglected.

Here is the case for planning, and the details of how a Labour Cabinet will formulate the national economic plan with both sides of industry operating in partnership with the Government. And here, in this manifesto, is the answer to the Tory gibe that planning could involve a loss of individual liberty. Labour has resolved to humanise the whole administration of the state and to set up the new office of Parliamentary Commissioner with the right and duty to investigate and expose any misuse of government power as it affects the citizen.

Much of the manifesto deals with the vital social services that affect the personal lives and happiness of us all, the welfare of our families and the immediate future of our children. It announces, unequivocally, Labour's decisions on the nagging problems the Tories stupidly (in some cases callously) brushed aside:

The imperative need for a revolution in our education system which will ensure the education of all our citizens in the responsibilities of this scientific age;

The soaring prices in houses, flats and land;

Social security benefits which have fallen below the minimum levels of human need;

The burden of prescription charges in the Health Service.

Labour is concerned, too, with the problems of leisure in the age of automation and here again Labour firmly puts the freedom of the individual first.

"It is not the job of the Government to tell people how leisure should be used", the manifesto declares. But, in a society where facilities are not provided when they are not profitable and where the trend towards monopoly is growing, it is the job of the Government to ensure that leisure facilities are provided and that a reasonable range of choice is maintained.

[Bingley Bloke]

Ah yes, but when you off set that against the number of (hedonically adjusted) iPods you could buy these days, you'll find that you're rich beyond your wildest dreams!

In three years we've spent roughly £14K on basic living costs (not including housing or transport) and about £300 on one iPod, so the CPI figure must be seriously fudged for falling costs such as MP3 players to distort it down to 2.2%

I wish one of the TV channels would do a really good piece of investigative journalism on inflation... like that programme that was on about estate agents a while back.

Edited June 29, 2006 by Bingley Bloke

[Jimmy James]

Everyone is very analysis light today and rant heavy - you must have got this one off your chest by now, shouldn't you be looking for numbers to back it up?

Below is the Independent article

=======

Why the real rate of inflation is twice what the official figures tell us

Rises in bills that have to be paid come what may hurt more than rises in luxury items

By Philip Thornton, Economics Correspondent

Published: 13 June 2006

Official figures later this morning are expected to reveal that inflation rose to 2.1 per cent from 2.0 per cent last month. While this will create huge excitement among City traders betting on the next move in interest rates, it will leave millions of ordinary people scratching their heads in bewilderment. Perhaps with good reason.

...an index devised by The Independent, and published today, appears to back that notion. The index strips out items that are not essential to a basic standard of living. Thus we have taken out leisure goods and services, household services, personal goods, buying a car, tobacco and alcohol. Our index is dominated by the cost of running a home, paying for the public utilities, keeping a car on the road and basic items such as clothing, furniture and chemists goods. It is open to criticism - why include the cost of running a car but not buying it? - but it attempts to isolate areas of inflation that irk people.

While the official inflation rate the Bank of England uses to set interest rates has been below 2 per cent for 20 out of the past 28 months, our index has been above 4 per cent for 17 of those months, and higher than 5 per cent for five.

In other words non-discretionary inflation is running at about twice the targeted one - and in October 2004 showed an annual rise of 5.3 per cent, more than four times the official measure of 1.2 per cent.

..

=============

The free bit ends there. The Independent commissioned this study from an economics consultancy - anyone have access to the report?

[warwickbloke]

http://www.statistics.gov.uk/CCI/nugget.asp?ID=21

This is how it is worked out if it is any use.

[Grossinquisitor]

the real inflation is roughly: money supply minus GDP growth

Yoy M4 money supply for the UK is approx. 12.5%, GDP growth 2.5%, that gives a real inflation of 10%

[pop]

I'll always go with the number of new digitally created notes.

13%.

[RealInflation.co.uk]

I just stumbled upon this thread via Google as I share a huge interest in the topic. I'm a professional web developer from Yorkshire, now living in London. I recently registered RealInflation.co.uk with the aim of building a website that tracks a real inflationary figure. One that represents items that the majority of us actually spend our hard earned cash on through necessity, not choice.

I'm looking to track items such as fuel, travel costs, utility prices, council tax, mobile and home phones, internet and mobile internet, congestion charges, parking costs, parking fines, road tax, car and home insurance, and a number of consumables such as meat, coffee, fruit, bread, milk, cigarettes and alcohol.

I would really like to get some input from you folks before I set this up, just to be sure that I am going in the right direction. There are probably 100's of ways to do this, and only your input will make sure it will be a valuable resource.

If you have any ideas or suggestions, or would like to be involved at any level, please contact me through this website.

Kind regards.

Chris Bolton.

[Never Going To Buy !]

I just stumbled upon this thread via Google as I share a huge interest in the topic. I'm a professional web developer from Yorkshire, now living in London. I recently registered RealInflation.co.uk with the aim of building a website that tracks a real inflationary figure. One that represents items that the majority of us actually spend our hard earned cash on through necessity, not choice.

I'm looking to track items such as fuel, travel costs, utility prices, council tax, mobile and home phones, internet and mobile internet, congestion charges, parking costs, parking fines, road tax, car and home insurance, and a number of consumables such as meat, coffee, fruit, bread, milk, cigarettes and alcohol.

I would really like to get some input from you folks before I set this up, just to be sure that I am going in the right direction. There are probably 100's of ways to do this, and only your input will make sure it will be a valuable resource.

If you have any ideas or suggestions, or would like to be involved at any level, please contact me through this website.

Kind regards.

Chris Bolton.

Sounds like a good idead Chris, and I've no doubt your research will show the truth of the inflation con spouted by Gordon and his cronies.

Question is, what will actually be achieved? What will you do with the truth?

I can't see it making a difference to anything, at least not in the way needed such as better pay rises (if you still have a job!).

[scottbeard]

I recently registered RealInflation.co.uk with the aim of building a website that tracks a real inflationary figure. One that represents items that the majority of us actually spend our hard earned cash on through necessity, not choice.

I'm looking to track items such as fuel, travel costs, utility prices, council tax, mobile and home phones, internet and mobile internet, congestion charges, parking costs, parking fines, road tax, car and home insurance, and a number of consumables such as meat, coffee, fruit, bread, milk, cigarettes and alcohol.

Chris - that is an admirable and interesting project. However, don't forget that the single biggest omission from the official figures is the cost of houses.

If milk goes up 15% from £1 to £1.15, but the cost of buying a house falls 15% from £175k to £150k, I contend that the latter is more financially significant.

Although I buy a lot more pints of milk than I do houses (I think my personal lifetime ratio to date has been about 1000:1) I actually spend a much higher PROPORTION of my total income on houses.

Some people overestimate inflation in their mind, because they buy the things that are getting more expensive (food, energy) every day, whereas they buy the things that are getting cheaper (houses, cars, technology) perhaps only once every few years. But in % of income terms, the "big ticket" items are very significant.

In stark terms - if my grocery bill doubled, but my house and car had cost 50% less, I would be better off overall.

I totally accept of course that if you cannot afford "big ticket" items or choose not to buy them, your personal inflation rate is much higher, and your survey will be helpful in showing how necessities are increasing in price more than the RPI/CPI. However, it is a complex picture.

[Take Me Back To London!]

What irritates me is all the cobblers about deflation. We had all the scare stories back 2003 that we faced the deflationary death spiral, which justified the low interest rates to combat it. Again we are told of the threat of deflation, when are people going to wake up and realise that they are been robbed of their wealth everyday by inflation.