Sunday, Aug 16, 2015

Weak oil prices and the strength of the pound are expected to have kept inflation flat in the year

Telegraph: 'No-flation’ lowers the prospect of Bank of England interest rate rise

Britain came within touching distance of deflation again in July, increasing the likelihood that the Bank of England will postpone its first rate rise in more than eight years. (Read between the line, and given that eight years of 0.5% interest rates is not enough to get about 0% inflation, clearly, a rate cut is the only thing that will possibly cause inflation to rise). British Gas meanwhile has decided to slash tariffs 5%, with others expected to follow suit, so deflation should accelerate through the Autumn, noting that this co-incides with the end of the US driving season, so gas prices should also fall more than most anticipate.

Posted by libertas @ 05:19 PM (4529 views)
Add Comment
Report Article

2 Comments

1. reticent said...

Actually, the effects of the commodities collapse are about to drop out of the inflation figures as it happened at the end of last summer. Naturally, some effects take longer to sink in (e.g. utility prices as they are based on longterm contracts and so fluctuate much less than the cost of the underlying energy), but most of the deflationary pressures appeared about a year ago.

Btw, British Gas sells gas and electricity. US cars run on petrol/diesel like most cars. They just happen to call petrol and diesel gas. They're different fuels. In any case, if the end of US driving season did affect the price of British Gas's inputs, you would expect them to anticipate that because the end of US driving season, if there is such a thing, doesn't sound like a particularly unexpected event.

Monday, August 17, 2015 06:38AM Report Comment
 

2. reticent said...

http://www.bbc.co.uk/news/business-33971890

Inflation is 0.1%.

Tuesday, August 18, 2015 08:52AM Report Comment
 

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines
Username  
Admin Password
Email Address
Comments

Main Blog | Archive | Add Article | Blog Policies