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Ft: Boe Hits At Us Inflation Measure

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Hypocracy-tastic, obviously our preferred measure of inflation is impeachable, the Comedy Price Index.

BoE hits at US inflation measure

By Krishna Guha in Jackson Hole

Published: August 27 2006 18:43 | Last updated: August 27 2006 18:43

The US Federal Reserve is wrong to focus on core measures of inflation that exclude energy prices, Charles Bean, chief economist at the Bank of England, has suggested.

It should focus instead on headline inflation, which is much higher, he argued. Including energy and food costs, US consumer price inflation is running at an annual rate of 4.1 per cent, against 2.7 per cent for core inflation.

Edited by HousePriceLottery
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Hypocracy-tastic, obviously our preferred measure of inflation is impeachable, the Comedy Price Index.

Depends what you are trying to measure and there's not a fixed relationship between how and when a central bank changes interest rates and the measure. The Fed will be looking at all the measures, even if it's primary focus is on core inflation, so it doesn't matter if the figure is measured in percentages, it's the decisions that count and thier effect on the economy.

However this is an aside for Adam's favourite rant: it's when the buggers use CPI for pensions increases, changes to tax thresholds, etc. when we all know that real inflation is much much higher. :angry: :angry: :angry:

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