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Bank Investigates How The Price Of A Sofa Can Dictate Rate Of Inflation

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Bankrupt of England - pathetic that they even believed the figures in the first place.

They are even more useless, deluded and out of touch than I stook them for.

goodshttp://business.timesonline.co.uk/tol/business/economics/article2648606.ece

http://business.timesonline.co.uk/tol/busi...icle2648606.ece

October 13, 2007

Bank investigates how the price of a sofa can dictate rate of inflation

Sarah Butler and Gabriel Rozenberg

The Bank of England has launched a national inquiry into mysterious swings in the price of sofas, armchairs and kitchen tables that have played havoc with its economic forecasts.

Changes in furniture prices have been large enough to increase the volatility of the consumer price index, the Bank’s target measure of inflation.

In a rare insight into the level of detail with which the MPC tracks the economy, The Times was alerted to the Bank’s inquiry by Mufti, a luxury furniture retailer with a store on Fulham Road, in West London, and a concession in Harvey Nichols.

The Bank’s agent has contacted Harvey Nichols with a list of questions, such as: “Do you have any explanations for the price fluctuations?” The Knightsbridge department store passed on the Bank’s inquiries to Mufti, which specialises in made-to-order sofas priced from £2,000.

Michael D’Souza, who heads the business, said: “I thought it was odd. If the Bank of England might make a decision based on a little boutique like mine, then we are in deep trouble.”

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Well lets face it - they've removed everyting else from the basket and we're down to the price of a sofa represnting CPI - wonder when D'Souza will get a call from No 10 - wonder if you'll reduce prices Lord D'Souza to show CPI below 2%

SB

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Guest Shedfish

:lol: could be that the marketing departments at MFI et al are all economists, and just having a larf with a few price-push inflation jokes

whatever next? - the BoE to monitor price movements in houses, energy, food, services...?

then where would we be..

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look,it's all part of the deflator.Get used to it.

you buy a sofa on HP,fair enough

the HP is interest-free for 3 years

and the depreciation factor,much like wear-and-tear on BTL props is standard.25% off p.a until it becomes defunct.

yet more sleight-of-hand

all of us on here know the score...you can't eat IPOD's!!

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If they're down 10 percent last month they'll be up 10 percent this month so hurrah, hello again to inflation.

Why on earth do they just not take them out of the basket?

How can one item lead to such a drop? Doesn't seem right to me. Surely if sofa's became free that should only contribute a very small amount if there's 3000 things in the basket?

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If they're down 10 percent last month they'll be up 10 percent this month so hurrah, hello again to inflation.

Why on earth do they just not take them out of the basket?

How can one item lead to such a drop? Doesn't seem right to me. Surely if sofa's became free that should only contribute a very small amount if there's 3000 things in the basket?

I haven't got a clue how much it costs to make a sofa, but profits all the way up the supply chain must be virtually nil.

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I've only ever bought one sofa. In 1990.

Hardly an indicator of the cost of living imho.

Same with most of the sh1te on the list ... never bought any of it, nor likely to.

What I DO buy though are: roof over my head, gas, water, electricity, TV licence, household insurance, cost of landline, car insurance, petrol, loo roll, spuds, cheese, eggs, bread, baked beans, chips, indian takeaway.

Those are the basics of the cost of living! Not bloomin' sofas. Cretins.

Edited by ScaredEitherWay

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Doesn't the ONS calculate CPI?

They do, but the Bank of England don't believe them, so they use their own people:

The Bank of England has a team of agents in each region of the UK who are in regular contact with about 8,000 businesses and who act as the eyes and ears of the interest-rate-setting Monetary Policy Committee (MPC). They are asked to carry out more detailed investigations whenever the MPC feels that the official figures are not telling the full story.

A Bank spokeman said: “This is part of the regular information-gathering exercise we undertake for the MPC.”

(from the above linked article)

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Bankrupt of England - pathetic that they even believed the figures in the first place.

They are even more useless, deluded and out of touch than I stook them for.

goodshttp://business.timesonline.co.uk/tol/business/economics/article2648606.ece

http://business.timesonline.co.uk/tol/busi...icle2648606.ece

October 13, 2007

Bank investigates how the price of a sofa can dictate rate of inflation

Sarah Butler and Gabriel Rozenberg

The Bank of England has launched a national inquiry into mysterious swings in the price of sofas, armchairs and kitchen tables that have played havoc with its economic forecasts.

Changes in furniture prices have been large enough to increase the volatility of the consumer price index, the Bank’s target measure of inflation.

In a rare insight into the level of detail with which the MPC tracks the economy, The Times was alerted to the Bank’s inquiry by Mufti, a luxury furniture retailer with a store on Fulham Road, in West London, and a concession in Harvey Nichols.

The Bank’s agent has contacted Harvey Nichols with a list of questions, such as: “Do you have any explanations for the price fluctuations?” The Knightsbridge department store passed on the Bank’s inquiries to Mufti, which specialises in made-to-order sofas priced from £2,000.

Michael D’Souza, who heads the business, said: “I thought it was odd. If the Bank of England might make a decision based on a little boutique like mine, then we are in deep trouble.”

Priceless quote.

Perhaps it is the 'hedonistic' adjustment based on the softness of the material?

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Look i buy a sofas every week ok and the prices always changes, i liek to have a 2 seater sofa for my sunday roast.

leather makes such nice cracklin

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They do, but the Bank of England don't believe them, so they use their own people:

(from the above linked article)

If the CPI under estimates inflation then will we not get higher rates in the future ?

So BOE calc inflation, and GDP themselves now ?

Brass-necked thieves even lift doorknobs

Residents returning to their homes in a quiet street in the West Midlands knew something was wrong but could not quite put their finger on it. Or their hands.

It was only when they went to open their doors that they realised the brass handles had been stolen, along with their house numbers.

The thefts are being carried out by organised gangs across the country who are stealing tens of millions of pounds of metal to feed the boom in the construction industry in China and India.

http://www.timesonline.co.uk/tol/news/uk/c...ll&offset=0

Edited by Ash4781

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It was only when they went to open their doors that they realised the brass handles had been stolen, along with their house numbers.

The thefts are being carried out by organised gangs across the country who are stealing tens of millions of pounds of metal to feed the boom in the construction industry in China and India.

BTL is the biggest growth industry in the UK during the last 10years. Maybe the exporting of metals could be our biggest growth export during the last 10 years.

An economy built on the growth of BTL, exporting of metal door knobs and debt growth - ffs man, even I could do better than this government.

Edited by Bearback

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If they're down 10 percent last month they'll be up 10 percent this month so hurrah, hello again to inflation.

Why on earth do they just not take them out of the basket?

How can one item lead to such a drop? Doesn't seem right to me. Surely if sofa's became free that should only contribute a very small amount if there's 3000 things in the basket?

When all real expenses have been excluded from the index, one item can lead to such a drop. Seriously, the biggest category of expense in the index is "Recreation and Culture". What a joke. I only wish that really were my largest source of expenses.

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When all real expenses have been excluded from the index, one item can lead to such a drop. Seriously, the biggest category of expense in the index is "Recreation and Culture". What a joke. I only wish that really were my largest source of expenses.

they can make whatever numbers they like up, but the market is not interested in numbers, inflation exists (or not) whether you measure it right (or not).

The problem with measuring it wrong is that the medicine applied will be wrong.

The BoE needs to ensure the right medicine is given or its their bottoms on the line

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To be fair the *ank of England were told to follow CPI by Brown, and Brown brought this in to placate Blair after Brown had refused to take us further into the Euro.

Really?

I'd be very interested to establish exactly what Labour policy is with respect to the Euro.

If we join, I imagine our economy being affected by that in mainland Europe - so, lower interest rates; a stabilisation of CPI inflation - and, likely, a rocket under house prices.

If we back away from the Euro, won't we suffer the same devastatingly high interest rates as we had back in '92 when we last pulled back from the Euro?

It seems remarkable that there seems to be no published policy on expected time scales... This year; this decade; this century?

Would the British people be given a heads-up in the form of a referendum, or will we simply join overnight (as, I understand, happened in Germany.)

Have we properly assessed the impact of such a move on business and trade? Do we know the effect on imported goods and labour?

It seems quite freaky that the only time the Euro gets a mention is on the lips of an apparently rabid euroskeptic tory stalwart. Doesn't anyone treat this issue openly and pragmatically?

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Really?

I'd be very interested to establish exactly what Labour policy is with respect to the Euro.

If we join, I imagine our economy being affected by that in mainland Europe - so, lower interest rates; a stabilisation of CPI inflation - and, likely, a rocket under house prices.

If we back away from the Euro, won't we suffer the same devastatingly high interest rates as we had back in '92 when we last pulled back from the Euro?

It seems remarkable that there seems to be no published policy on expected time scales... This year; this decade; this century?

Would the British people be given a heads-up in the form of a referendum, or will we simply join overnight (as, I understand, happened in Germany.)

Have we properly assessed the impact of such a move on business and trade? Do we know the effect on imported goods and labour?

It seems quite freaky that the only time the Euro gets a mention is on the lips of an apparently rabid euroskeptic tory stalwart. Doesn't anyone treat this issue openly and pragmatically?

I'd quite like to join the euro at some point. I feel that in the long run, this will be beneficial due to a) less reliance of the economy in financial services in the SE (and consequently interest rates will more suit the rest of the country) and b ) globally, sterling being submerged by the euro will further strengthen the euro against the dollar and give us better access to oil.

Ideally there'd be a nice HPC along the way, coupled with leglislation to prevent prices spiralling out of control again.

edit: that damn b and right bracket combination again

Edited by surfcat

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Look i buy a sofas every week ok and the prices always changes, i liek to have a 2 seater sofa for my sunday roast.

Me too and I always go for made to measure so I can understand the Bank of England's interest. Baked beans are so last century.

Edited by margesimpson

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