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Telegraph: Don't Believe Labour: Inflation Is Back

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http://www.telegraph.co.uk/opinion/main.jh...7/28/do2802.xml

Don't believe Labour: inflation is back

By George Trefgarne
(Filed: 28/07/2006)
Of all the lies New Labour has told, the one for which it will pay the highest price is its claim that it has buried inflation. Economic stability is the foundation on which the precarious edifice of this Government is built. Low unemployment, steady growth and rising house prices have allowed it to get away with murder elsewhere - on immigration policy, crime, Iraq and in its treatment of the fabric of society itself......./
Now, however, they must be worried. For the myth that inflation is dead is being exposed. Hardly a day goes by without some price rise or other. Take this week. By this morning we have had passports up by 29 per cent; British Gas raising the price of gas (12 per cent) and electricity (nine per cent); and even a warning of a surge in the cost of orange juice. The new-fangled Consumer Price Index (CPI), a dubious official measure of inflation introduced in 2003, has finally noticed and last month came in at 2.5 per cent, its highest since 1997..../
And ministers have compounded their recklessness by lying about it. Does anyone seriously believe that, even now, inflation is just 2.5 per cent? It all depends on who you are. My own personal rate of inflation, I reckon, is about twice the official rate. The difference between 2.5 per cent and five per cent may not sound much, but over time it recurs and compounds into a chasm.
The CPI, which the Bank of England was forced to adopt as its target measure of inflation three years ago, is only now picking up what families noticed months ago: prices are rising. The CPI basket is flawed. It is overweight with all sorts of imports that have indeed been falling in price: clothes, shoes, software, electronics goods, and computers. And it is underweight with things that keep going up in price, such as services and transport.
Above all, the CPI leaves out or under-records two huge costs: housing and the Government. Even as house prices have gone through the roof, and the Chancellor has raised taxes more than 60 times since 1997, the CPI has barely budged.../

100 % on target. Wake up Britain and smell the coffee.

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Not good news for us really. It shows this govt will try to inflate our country out of debt rather than do what it needs to.

Yep, reckon with GB's eye on power and BOE's lack of, well, anything about them they will let inflation rise rather than virtually guarantee to crash the whole thing with an IR rise...

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http://www.telegraph.co.uk/opinion/main.jh...7/28/do2802.xml

Don't believe Labour: inflation is back

Absolutey spot on!

House prices should be included in the CPI basket. The argument for not including them is that they can go up and down in price. If house prices had been included then CPI would have been higher, interest rates would have been higher and house prices wouldn't have risen so much and they wouldn't be likely to fall in price. It is because house prices are not included in CPI measure that they do go up and down in price!

However, what concerns me now is the easy meddle of CPI to include house prices when they start to go down in price.

Us FTBs have been priced out - wage inflation hasn't kept up with house price inflation. The last thing we need now is house prices in CPI contiuning to keep our wages down.

The Lib Dems are calling for the inclusion of house prices in CPI - but this must not happen now.

The CPI should not be so heavily weighted to the goods that people don't have to buy. They should have included house prices but they have to remain constant because ultimately the cheap imported goods are now rising in price. The CPI needs to be consistent through time, not meddled with constantly to keep inflation appearing low.

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Inflation is very bad news.

I am starting to think it is already too late. House prices should have been our clue that things were getting out of hand.

IMO house price crash and global recession would be the soft landing.

If we get into hyper-inflation we are up a creek without a paddle.

For gods sake please raise interest rates GB!

Sorry in negative mood today.

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Is the BoE playing a game? I think they are stuck in the headlights.

http://business.guardian.co.uk/story/0,,1825518,00.html

The deputy governor says they do not see any second round effects of rising energy prices? Well, first, its more than just energy prices that are rising (council tax, bills, services). Second as shown by the 4% pay deal reached with the Royal Mail today and many others over the last few months wage inflation seems to be running nearly a couple of % points above CPI and that does not reflect what the pay demands will be in the next 6-12 months once consumers have found their pockets even emptier.

Its ironic - if the BoE had limited borrowings earlier by raising rates then the consumer would have borrowed less and have more cash in his pocket this year (due to lower debt service) to meet the rising bills. It didn't, they didn't and haven't so trouble ahead.

Edited by Tempest

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Inflation is very bad news.

I am starting to think it is already too late. House prices should have been our clue that things were getting out of hand.

IMO house price crash and global recession would be the soft landing.

If we get into hyper-inflation we are up a creek without a paddle.

For gods sake please raise interest rates GB!

Sorry in negative mood today.

http://en.wikipedia.org/wiki/Hyperinflatio...round_the_world

200px-Inflation-1923.jpg Inflation 1923-24: A woman in Germany feeds her tiled stove with currency notes. The notes burn longer than the amount of firewood they can buy.

500000000000_dinars.jpgA 500,000,000,000 (500 billion) Serbian dinar banknote circa 1993, the largest nominal value ever officially printed in Serbia, the final result of hyperinflation

OK - who here just throws 1,2,5,10p away? - next move £1,£5? (all borrowed -of course)

PS 'officially' the BOE raises IR not GB....

Edited by dnd

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To anyone/journo type who is reading this thread/forum who has the power of print at their disposal.

Would you mind spreading the word regarding this b@llshit claims about the low inflation figures being peddled by a corrupt government. I mean it is costing us all, and the longer it goes on the poorer we all get.

You have the power to educate the average joe on the street, come on put the poor guy out of his misery, tell him

NU LayAbouts, i mean NU Labour, are on the fiddle big time?????????????

And as for Brown, well its a miracle we can all afford to pay for lifes little luxuries :lol:

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To anyone/journo type who is reading this thread/forum who has the power of print at their disposal.

Inflation is harder to understand than IR - inflation can be measured, it seems, in a variety of ways

IR are just a single figure

It's easier, in PR terms, for GB/BOE to continue to let inflation rise and keep IR down

I don't think the public will cotton on until it really hits them hard and GB has secured Labour another term....

Edited by dnd

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Inflation is harder to understand than IR - inflation can be measured, it seems, in a variety of ways

IR are just a single figure

It's easier, in PR terms, for GB/BOE to continue to let inflation rise and keep IR down

I don't think the public will cotton on until it really hits them hard and GB has secured Labour another term....

Inflation should be measured by including the necessities. Food, oil, housing. Not including things (or reducing the weighting severely) someone only buys once or twice a decade (if that) such as TV, fridge, mp3 player, computer.

Edited by OzzMosiz

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What second round effects ?

Minimum wage is increasing by 6% (10% foir 16-17 yr olds) on October 1st

Hmm, the people most likely to vote Labour perhaps?

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Inflation should be measured by including the necessities. Food, oil, housing. Not including things (or reducing the weighting severely) someone only buys once or twice a decade (if that) such as TV, fridge, mp3 player, computer.

I agree - but it should be borne in mind that people tend to purchase these things more frequently nowadays. In fact, our "growth" depends very much on a rapid turnover of new "stuff" irrespective of whether it is actually required or not.

I'm not sure how much of this is down to poor build quality. I suspect that its rather because it is cheaper to replace (labour costs in Far East) than to repair (labour costs in UK)

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It shows this govt will try to inflate our country out of debt rather than do what it needs to.

When will people finally come to understand that it's _WAGE INFLATION_ that inflates away debts, while price inflation makes them worse? You don't 'inflate your way out of debt' by increasing costs while wages remain pretty much static: that makes debts _HARDER_ to pay off.

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When will people finally come to understand that it's _WAGE INFLATION_ that inflates away debts, while price inflation makes them worse? You don't 'inflate your way out of debt' by increasing costs while wages remain pretty much static: that makes debts _HARDER_ to pay off.

Yep, price inflation doesn't make the problem of debt go away - it makes it worse - you have to borrow/work more to bridge the gap between wages and prices

Wage inflation is currently supressed through immigration and increasingly through higher unemployment (again fiddled?)

Edited by dnd

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Yep, price inflation doesn't make the problem of debt go away - it makes it worse - you have to borrow/work more to bridge the gap between wages and prices

Wage inflation is currently supressed through immigration and increasingly through higher unemployment (again fiddled?)

And cheep wages in the far east. However, those effects may be coming to an end. Wages in China are rising, their basic wage went up 20% this year, apparently, and the Yaun is gradually strengthing making imports more expensive for us. The Chinese are thinking about letting the Yaun rise faster to act as a break on growth, it seems that there are real worries about the robustness of the Chinese banking system.

Inflation is back, soon to be big time IMO......

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And cheep wages in the far east. However, those effects may be coming to an end. Wages in China are rising, their basic wage went up 20% this year

...this means we also import their wage inflation through imports of their goods - adding to our price inflation

That's what's worrying BOE/GB - current inflation calculation figure rely heavily on these, currently, cheap imports - this will force another change in how it's measured if they want to further hide growing inflation

If the inflation measurment is changed again in the near future - you know for sure that GB/BOE policy is to let inflation continue to rise - anybody with any sense/cash left should buy gold....

Edited by dnd

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Hmm, the people most likely to vote Labour perhaps?

16 year olds will be voting at the next election so it makes sense. Too young to be FTBs so why not vote for the cool Gordo?

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Anyone with half a brain realises that the CPI inflation figures are rigged. But what is the true meaning of inflation? This article explains what has happened to the definition of inflation in dictionaries over the years.

When you understand what has happened to the definition you realise Inflation figures given by the government are utter b ollocks

http://inflationdata.com/Inflation/Articles/Definitions.asp

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Inflation is very bad news.

I am starting to think it is already too late. House prices should have been our clue that things were getting out of hand.

IMO house price crash and global recession would be the soft landing.

If we get into hyper-inflation we are up a creek without a paddle.

For gods sake please raise interest rates GB!

Sorry in negative mood today.

The fact that the government lies of the Inflation rate are in the mainstream news say's that it is almost / already to late.

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If the BoE dont raise rates at the next meet they will lose what little credibility they have left.

Come on Merv and co show us your true metal whats the worst that can happen the hairdryer treatment from Gordon, think about your careers after the BoE.

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The fact that the government lies of the Inflation rate are in the mainstream news say's that it is almost / already to late.

This is why I am worried about the tensions in the middle east escalating bringing in Iran and the repercussions of this. It will give the Blair government the excuse for the depression which will result and thus deflecting the real reason for the economic problems which was the bull shi t economic data they have been feeding us for years thus delaying the reality of the real state of the economy and the problems of this when they come home to roost.

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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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