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munimula

Is Cpi An Accurate Inflation Measure?

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CPI is a very good measure of the price of the goods in the CPI basket. Does that help?

Real inflation is the expanding of money minus real economic growth, around 8-10%. Gulp.

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CPI is a very good measure of the price of the goods in the CPI basket. Does that help?

Real inflation is the expanding of money minus real economic growth, around 8-10%. Gulp.

Should CPI include house costs?

I think it should. Not now but it should have included it.

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Looking back...

Monetary growth was targetted. They didn't like that (they couldn't print as much as they liked)

Then they targetted rising prices. Worked for a while, but people demanded higher wages etc (not good)

Now they target consumer prices. Great, inflation rises means less money spent on discretionary items, so consumer prices don't rise as much.

I've also heard some journalist say we should not target consumer prices, we should target wage growth... Yeah, never ever rise interest rates until the very last possible point... Just before the fiat money system collapses.

House prices should have been in the inflation figures, but the UK couldn't have targetted this (hence have higher interest rates) without the rest of the world doing the same. It would have destroyed manufacuring and exports.

Now i'll just wait for the big bang...

Edited by Jason

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Do you think we would have had different IR decisions if they'd continued to target RPI or RPI-X, rather than CPI?

No. I think we would have had different IR decisions if they had calculated them accurately and honestly

without any agenda to alter the result.

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No. I think we would have had different IR decisions if they had calculated them accurately and honestly

without any agenda to alter the result.

But if they'd carried on with RPI and RPI-X would they have been the same? I'm just trying to establish whether people think it's just CPI that's fudged, or whether they think they are all fudged.

The trend between all 3 indices is remarkably similar, indicating that either all or none are accurate.

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But if they'd carried on with RPI and RPI-X would they have been the same? I'm just trying to establish whether people think it's just CPI that's fudged, or whether they think they are all fudged.

The trend between all 3 indices is remarkably similar, indicating that either all or none are accurate.

I see no reason to trust the RPI(X) index any more than the CPI - the process, the revisions, the adjustments, the mix and the weightings are the important things which can shift the fair reflection of what people are exposed to inflation-wise and the distortions go through both.

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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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