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Telegraph: Household Bills Up 47%

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http://www.telegraph.co.uk/news/main.jhtml...18/npower18.xml

Power prices rise 47% in six months

By David Derbyshire, Consumer Affairs Editor

(Filed: 18/08/2006)

Millions of homes were facing their second major rise in fuel bills within six months yesterday after Powergen announced another round of price increases.

The German-owned company is increasing gas prices by 18.4 per cent and electricity bills by 9.7 per cent from Monday. It blamed the rising wholesale cost of gas, which it said had climbed by 87 per cent since the beginning of last year.

The increases follow similar rises by its major rivals, British Gas, EDF Energy and Scottish Power. Other suppliers are expected to follow suit over the next few months. Every major supplier has imposed at least two price increases this year......../

Mervyn Kohler, of Help the Aged, urged the Government and energy suppliers to make helping struggling pensioners a priority. Tony Herbert, of Citizens Advice, said: "We are starting to see evidence of people struggling to pay their gas and electricity bills and we expect that this will grow massively over the winter months."

People are going skint. We are past the top of this current cycle as credit is drying up and will force this Miracle Economy over the edge as winter begins to set it.

http://www.telegraph.co.uk/money/main.jhtm.../16/cncpi16.xml

CPI controversy fuelled by rising inflation
By Edmund Conway, Economics Editor
(Filed: 16/08/2006)
The controversy surrounding the Consumer Price Index (CPI) has taken a new turn as the Office for National Statistics said its measure of inflation fell last month, despite electricity and gas prices rising at the fastest rate in over 26 years.
Figures from the ONS have also shown that it is understating the effect of higher utility bills on the overall inflation number. The amount of weighting given to gas bills in its inflation calculations has risen by only 17pc since 2003 while the actual cost of gas bills has rocketed by 64pc.
Edited by Realistbear

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It is going to be a hard winter, don't think prices will raise much further but I am sure they won't come down anywhere near as quick when the new pipelines are opened

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Figures from the ONS have also shown that it is understating the effect of higher utility bills on the overall inflation number. The amount of weighting given to gas bills in its inflation calculations has risen by only 17pc since 2003 while the actual cost of gas bills has rocketed by 64pc.

Trust the Torygraph to spout such utter nonsense... Simple example: imagine we live in a world with only apples and oranges. Both cost £1, and we consume the same amount of each, so both contribute 50% to a basket of goods such as the CPI. Now we experience apple price inflation of 100%, so apples now cost £2. Even if I assume that there is no substitution from apples to oranges and we still consume equal amounts of each, then apples would now contribute 66% to the basket of prices. In other words a 100% price increase only leads to a 33% increase in the weighting used for CPI.

As we actually buy far more than two items (gas is only one of many things I have to pay for each month) and as gas price rises will lead to people using less (through better insulation, switching to alternative fuels, or simply wearing thicker jumpers) then the added contribution to the CPI basket is likely to be even more muted. In fact, I'm surprised its as high as 17%, and certainly see no evidence that the ONS is 'fiddling the books' in this case.

Edited by IamSpartacus

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Trust the Torygraph to spout such utter nonsense... Simple example: imagine we live in a world with only apples and oranges. Both cost £1, and we consume the same amount of each, so both contribute 50% to a basket of goods such as the CPI. Now we experience apple price inflation of 100%, so apples now cost £2. Even if I assume that there is no substitution from apples to oranges and we still consume equal amounts of each, then apples would now contribute 66% to the basekt of prices. In other words a 100% price increase only leads to a 33% increase in the weighting used for CPI.

As we actually buy far more than two items (gas is only one of many things I have to pay for each month) and as gas price rises will lead to people using less (through better insulation, switching to alternative fuels, or simply wearing thicker jumpers) then the added contribution to the CPI basket is likely to be even more muted. In fact, I'm surprised its as high as 17%, and certainly see no evidence that the ONS is 'fiddling the books' in this case.

Ah, but: what if apples were a basic human need, and oranges were a rare extravagance, and what you then did was weight the measure so that the rise in the price of the basic human need was hugely offset by the stagnation or falling price of the rare extravagance...

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As we actually buy far more than two items (gas is only one of many things I have to pay for each month) and as gas price rises will lead to people using less (through better insulation, switching to alternative fuels, or simply wearing thicker jumpers) then the added contribution to the CPI basket is likely to be even more muted.

we could always burn BTL,s to keep warm ?

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Ah, but: what if apples were a basic human need, and oranges were a rare extravagance, and what you then did was weight the measure so that the rise in the price of the basic human need was hugely offset by the stagnation or falling price of the rare extravagance...

If that were the case people would keep buying apples and cut back on the oranges if they couldn't afford them. Then the apple contribution to the CPI basket would be greater. The degree of switching between products tells you how much people consider apples or oranges to be essential or a luxury.

Who is to decide what's a 'need' and what is an extravagance? The ONS don't try and make that call, they simply measure what people are choosing to buy and put those items into the CPI basket. The fact that items in the CPI basket tend to be falling in price has nothing to do with trying to fiddle the figures to hide inflation, its because people buy more of something as it gets cheaper.

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The point is that sentiment is turning ugly and perception is reality. People are fearful and will reign in spending which will, in turn, slow the entire economy including highly speculative markets that are at the top of the cylce (or beyond).

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http://www.telegraph.co.uk/news/main.jhtml...18/npower18.xml

Power prices rise 47% in six months

By David Derbyshire, Consumer Affairs Editor

(Filed: 18/08/2006)

Millions of homes were facing their second major rise in fuel bills within six months yesterday after Powergen announced another round of price increases.

The German-owned company is increasing gas prices by 18.4 per cent and electricity bills by 9.7 per cent from Monday. It blamed the rising wholesale cost of gas, which it said had climbed by 87 per cent since the beginning of last year.

The increases follow similar rises by its major rivals, British Gas, EDF Energy and Scottish Power. Other suppliers are expected to follow suit over the next few months. Every major supplier has imposed at least two price increases this year......../

Mervyn Kohler, of Help the Aged, urged the Government and energy suppliers to make helping struggling pensioners a priority. Tony Herbert, of Citizens Advice, said: "We are starting to see evidence of people struggling to pay their gas and electricity bills and we expect that this will grow massively over the winter months."

People are going skint. We are past the top of this current cycle as credit is drying up and will force this Miracle Economy over the edge as winter begins to set it.

http://www.telegraph.co.uk/money/main.jhtm.../16/cncpi16.xml

CPI controversy fuelled by rising inflation
By Edmund Conway, Economics Editor
(Filed: 16/08/2006)
The controversy surrounding the Consumer Price Index (CPI) has taken a new turn as the Office for National Statistics said its measure of inflation fell last month, despite electricity and gas prices rising at the fastest rate in over 26 years.
Figures from the ONS have also shown that it is understating the effect of higher utility bills on the overall inflation number. The amount of weighting given to gas bills in its inflation calculations has risen by only 17pc since 2003 while the actual cost of gas bills has rocketed by 64pc.

Just to add a bit of balance to these excessive postings of Torygraph clippings, would anyone have anything from the Morning Star that they might like to post?

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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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