Thursday, Aug 24, 2006

We're all being conned!

Telegraph Business: CPI controversy fuelled by rising inflation

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.

Paul spotted this article first... TC

Posted by tyrellcorporation @ 11:25 AM (560 views)
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1. Mattsta said...

What a despicable con! Gordon Brown should be arrested and charged with fraud

Thursday, August 24, 2006 11:48AM Report Comment

2. paul said...

Thanks for posting it TC - to tell the truth I was just being too lazy.

I'm glad that the press are waking up to these dodgy stats. This is what the MPC fears the most - that perceptions of inflation will make a mockery of their IR rises, lead to secondary inflation and catapault the current bogus CPI towards 5 or 6%.

I predict a riot - as Mr Weller would say - and that this WILL happen.

Thursday, August 24, 2006 12:20PM Report Comment

3. denzil said...

At last! Commentators on this blog (regarded as conspiracy theorists by some) have been questioning the CPI for ages and at long last somebody in the media raises the issue too. Inflation for me is 10%+ (childcare, school & Uni) fees etc.
The fact that I can buy a pair of jeans for 3 quid at Asda or cheap video recorder that will last at best 2 years as opposed to a good (more expensive) one a few years back is of little consequence to the effect of inflation on me.

Thursday, August 24, 2006 12:48PM Report Comment

4. The Bald Man said...

This index is just total spin. Do you remember the cheap bus pass effect? If there is continued nlack of credibilty in tthe index I am sure there will be a reaction in the global money markets. Decisions on what currencies to be in are made on , inter alia, inlflation and interest rates. If you can not trust the data then how can an informed investment decision be made? this is one piece of spin this governement needs to clean up. There are some people out here who do not beleive every word ((some do not beleive any word!!

Thursday, August 24, 2006 12:52PM Report Comment

5. Mattsta said...

Yes Paul. Absolutely right. People are rightly beginning to suspect that Gordon Brown and his cohorts are fiddling the true extent of inflation. If fuel bills and petrol prices continue to increase over the coming winter, the cat will be out of the bag. I am amused how embarrassed Mervyn King looks these days, especially when he was decribing how he will have to write a letter to the 'chief thief' when the CPI reaches 3%!!! Laughable. The real inflation rate passed 3% about 1 week after Nu Labour were elected!

Thursday, August 24, 2006 12:53PM Report Comment

6. d'oh said...

For a very interesting review of the US situation regarding fiddling of the CPI see:

Thursday, August 24, 2006 12:55PM Report Comment

7. waitingfor hpc said...

i agree at last. Let the cheats be shown for what they are. We have all known this for ages, and so did the US. It is not rocket science. But the uk is scared of the results - and we know what they are ....HPC.

The end of cheap money is here, bring back reality and a real government not a puppet show!

In MNFR where i work we have had increases of over 40% in 12 months .. and they reckon factory inflation is 2.8% - that is also a lie.

Thursday, August 24, 2006 02:10PM Report Comment

8. J. B. M. C. said...


Thursday, August 24, 2006 02:34PM Report Comment

9. Fatso said...

More smoke and mirrors!

Thursday, August 24, 2006 02:44PM Report Comment

10. indiablue19 said...

Bogus statistics -- the new definition for white collar crime! The inflation index should consist of a list of essentials -- mortgage, rent, utilities, food, petrol, clothing, medical, public transportation -- not some rarified nonsense. Any decent business has a standard budget template for all of it. This index should be a standard feature of measure in the world -- just like a meter, or a liter, or a kilo. Surely the United Nations has a defnition for living costs worldwide. If not, I suggest we create one and send Crash a copy.

How is it possible that politicians create their own double-speak and then play it back to us like we're an appreciative audience of chimpanzees? I believe there is quite a distance between not wanting to be treated like a dumb zoo animal and being part of any conspiracy or public disorder. Although I do understand what Denzil is saying. Argue with this bunch and you're automatically out of line. I registered to vote yesterday. Any suggestions anyone?

Thursday, August 24, 2006 03:37PM Report Comment

11. Inflation Is Eating My Savings said...

Knowledge of inflation triggers more inflation- wave claims rise. People perceive it is foolish to hold onto it, therefore it gets spent on things, anything.
Although indices of inflation are a bare-faced lie, they are a necessary bare-faced lie.

Thursday, August 24, 2006 03:44PM Report Comment

12. Retiredbanker said...

It has been obvious for years that the inflation figures ( and most other government statistics ) have been

Very encouraging that the media have at last woken up to this, and are now starting to challenge the
bureaucrats and politicians.

I suspect that this site is very widely read, and the fellow cynics who regularly post here can take some
credit for this change, not forgetting that plaudits must be given to the esteemed webmaster of HPC.

Thursday, August 24, 2006 03:53PM Report Comment

13. bidin'matime said...

I always said new labour were a bunch of neo-soviets and I was right. They really have screwed it up this time.

Thursday, August 24, 2006 03:59PM Report Comment

14. Sloth said...

There's only one inflation measure I look at, and that's M4.

Thursday, August 24, 2006 04:16PM Report Comment

15. Nick said...

Brown is just trying to delay the crash untill he is in No10
I doubt if he will

Thursday, August 24, 2006 04:23PM Report Comment

16. Mattsta said...

Bring on the riots. They should be kicked out of office by force. NOW

Thursday, August 24, 2006 04:28PM Report Comment

17. japanese uncle said...

This seems to be sheer propaganda to convince the public of the necessity and inevitability of IR hike. In reality supermarkets may well find themselves in a cut-throat price competition in a shrinking cosumer market riddled with the fear of unemployment. Increasing price may not be that easy.

Thursday, August 24, 2006 05:07PM Report Comment

18. Sam said...

I always said new labour were a bunch of neo-soviets and I was right. They really have screwed it up this time. --- bidin'matime said.

Whoa, hold on people. I thought this wasn't a political platform. Anyone naive enough to suggest it is new Labours fault is probably just help pushing the Tory machine, who after all are the ones responsible for previous spike on that real house prices graph.

There seem to be a lot of people on this site who are sitting back so that they can be bulls in the coming market turmoil. I think that the current boom has its foundations in the last crash, no decent policy created by either party (the Tories after the crash, or by New Labour when they came into power), to provide a long term stable housing market or housing itself.

Housing, as much as it regarded as important in the economy is in magnitude much more important in society, the fact that political policy (with both major parties) does not reflect this just shows us why the market is in the state it is in today.

Do you honestly think David Cameron is going to do anything different? If so check his CV. (sorry but couldnt go without trying to balance your Neo Soviets comment).

Yes politicians are lying to us, its not new, its not even New Labour, its all of them. So why are you so surprised about it?

Thursday, August 24, 2006 05:20PM Report Comment

19. Mrmickey said...

If we say the real rate of inflation is 7% and the base rate is 4.75% this gives a real interest rate of -2.25% so the bank of England are still giving money away for free. At some point in time they will have to normalise interest rates and push them back in to positive territory. This could have a very interesting effect on the economy.

Thursday, August 24, 2006 05:27PM Report Comment

20. Ticktock said...


Thanks for that, that is a very good article indeed, and well worth everyone having a look at.

Thursday, August 24, 2006 07:22PM Report Comment

21. paul said...

JU, I think that might ... might ... not come true. A price war is difficult when everyone is faced with the same raw material hikes - if they do it's just like 八起き七転び in the end. Price wars don't happen especially if there is an oligopoly as we now have in the UK between supermarkets.

Far more likely that there will be a number of rapid but measured price hikes (remember they watch each others' prices _very_ carefully).

Thursday, August 24, 2006 08:36PM Report Comment

22. S said...

When I read these postings I keep having flashbacks to Alan Sugar strutting around on the TV advert talking about inflation beating National Savings. Sure they'll beat 2.4% but what about the true rate of inflation? Its difficult to know how to protect capital whilst waiting for the crash. I dont like surprises either mate!

Thursday, August 24, 2006 11:00PM Report Comment

23. Roadtohell said...

It's not just the raw materials that are increasing prices, it's compliance with directives such as RoHS and WEEE too. Far East manufacturers are either having to comply and add costs to cover the change in manufacturing products or sell to countries where it dosen't comply. Either way producers of electronic goods in Europe have to put prices up, either to pass on additional costs or because they have had to find a new manufacturer, which _will_ be more expensive.

Friday, August 25, 2006 07:31AM Report Comment

24. Jake The Muss said...

Anyone got a link to the actual CPI list and what % they attribute to each item?

Friday, August 25, 2006 09:26AM Report Comment

25. waitingfor hpc said...

MNFR is manufacturing. Sorry - I know we are a dying breed as in the new labour miracle we do not need to make anything, just buy it and sell it!

As for Sam - get in the real world. Labour has taxed, and spent, and taxed and borrowed, and taxed and lied. And let in immigrants, signed the social chapter, given powers to EU without a fight. Fiddled with every good thing in the UK - A Levels, GCSE's. Schools. NHS. The lot.............
and what does the UK have to show for it.......

Mass immigration, rising unemployment, UK National Debt mountain. Huge tax burden. Mass expantion of public sector. Massive pay rises for the sector. Head teachers on 140,000?????????????. Private debt mountain. Huge mortage debt on the make of their policy to offer ' low inflation, low interest rates, and an end to boom & bust'.

They make me sick. The country has been changed forever by mis management. If the Uk was a company the shareholders would have arrested this lot by now like the guys at ENRON for cooking the books.

Friday, August 25, 2006 09:47AM Report Comment

26. japanese uncle said...

Paul; Your point is taken in other circumstances, but in view of the the current retail supply capacity being overstretched to the limit, with outlets mushroomed during the last couple of years, unprincipled price hike may simply prove to be suicidal for them. A Waitrose branch newly opened this year obviously in expectation of the rigid purchasing power in my (middle class) neighbouhood, already start to display many items far reduced in price, despite their initial bullish stance in pricing. I can clearly see some fear (about job security) in the faces of every staff in the branch including a man seeming to be the branch manager. In any event I roughly predict 10% the supermarket retail outlets may have to close sooner rather than later.

Friday, August 25, 2006 11:31AM Report Comment

27. Trendinvestor said...

I am a hedge fund manager. It is well known in the city that the CPI stands for Constant Price Index. If you live on the street, use no energy and dont eat the figures make perfect sense for the rest of us they are a complete farce !!!!

The markets are now all as manipulated as hell, no such thing as a free market anymore. We are going to see wage rises at 2 to 3% and REAL INFLATION at 6 to 8% keep that up for 10 years and the middle class is going to be largely destroyed.

This whole War on Terror is a simple Oil land grab and much more importantly a mechanism to CONTROL THERE OEN PUBLIC WHEN THE SHIT HITS THE FAN. They are terified that the masses are going to riot like the poll tax riots but on a much bigger and more frequent scale. Have you noticed how the war on terror is now the war on violent extremism. So by definition anyone who objects can easily be labbelled a violent extremist. It is all getting very Orwellian.

Friday, August 25, 2006 12:07PM Report Comment

28. indiablue19 said...

JU....Your last comment seems spot on to me. Especially when you think that international conglomerates cut any dead wood these days at the first mention of the word "losses," imagine what will happen to anything globally based if purchasing lags. Case in point, HSBC, who is now courting the third world because it's more lucrative than the UK and generous laws on personal bankruptcy. I don't have a reading on how many Companies here are truly owned by financial interests elsewhere, but I bet it might be shocking. And watching their doors close to people in massive debt who have no jobs would be even more shocking than that.

Friday, August 25, 2006 12:21PM Report Comment

29. indiablue19 said...

By the way, I've read the criticism on this Blog from time to time that HPCers are potential Bulls, just waiting to swoop in and benefit from the sorrows of those silly enough to take on ridiculous debt. Naturally it would be great for all present to own a home at a reasonable price. But, I look at the site as something far more important. I believe that the responsible comments on this site are an attempt to wake people up to the fraud being perpetrated before it is far too late and they, not only don't have a house,but they have little or nothing to eat and no job. This is a fragile economic house of cards, not just a house, we're talking about. There's a similar history a mile long, which the government and financial interests blatantly ignore. The Nation had better start thinking WHY this is allowed to occur, if not encouraged.

Friday, August 25, 2006 12:28PM Report Comment

30. bidin'matime said...

Sam - at least the Tories were honest enough to set interest rates openly and didnt hide behind a supposed independent bank relying on a supposed independent measure of supposed inflation. The soviet connection is the extent of deceit and misinformation that comes out and then the extent of the police state built up to protect those at the top and keep the rest down.

I always said the Tories were too honest, because the public could see right through them, but Bliar conned otherwise intelligent people who simply couldnt believe that a politician could be so deceitful. They call him Teflon Tony and it's true - he can slip out of anything. Now hes working on his retirement keeping the Yanks happy so that they buy his memoirs and pay him mega-bucks on the after-dinner talk circuit.

Friday, August 25, 2006 02:06PM Report Comment

31. Northern Lad said...

22. waitingfor hpc said... I totally agree. Bad management and lies every day and these people are running our country! I've said for ages that the figures are fiddled. It seems that the general UK population jusr accept it! All new labour are doing is building themselves a cosy slot into the EU Government (look at Neil Kinnock)! They don't give a stuff about the population. I hope Crash stays chancellor for longer then he can eat his own *hit!

Friday, August 25, 2006 02:07PM Report Comment

32. Little Ol' Wine Drinker Me said...

A government, lining their own pockets for the day they get slung out. "I'm alright Jack" I think the saying is, they've been fiddling/manipulating figures to push up House Prices for years, we can all be pretty sure the HPs will finally go POP and then the country with it(final nail). When the proverbial **** hits the fan, they'll sell their investments (Houses, maybe!) and then the weasels will snivel off to their hideaways, leaving all the I think Im rich poor people (Hocked up on Mortgages and Interest payments) to bail out the country by paying even more taxes.

Someone once said to me It doesnt matter who you vote for, the Government always gets in

I thought Maggie and the Tories were bad, when it came to their dealings, but they pale into insignificance when compared to this shower of **ssers. Perhaps we could make a TV show calling it something like Watch the clever/intelligent people make a fortune on the back of the poor/stupid people.

No I'm not Tory, I do pay taxes, I'm not an estate agent(what do they do for so much money,again?!)

That feels better! A Friday afternoon rant.

Friday, August 25, 2006 02:42PM Report Comment

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