PeteBrant

BBC NEWS | Business | UK inflation up to 4.4% in July


CPI @ 4.4% up from 3.8% last month
RPI @ 5% up from 4.6% last month

Dracoro

Up 0.6% in ONE month.
If it carries on rising at that rate, over a year that's 7.2% + current rate of 4.4% resulting in 11.6% inflation over the next year.

See what I did there you can do a lot with numbers as most people are inumerate

Anyway, as discussed every time these figures come out, the "real" inflation (i.e cost of living that we can't avoid, food, leccy/gas/water/c-tax/fuel etc. is rising a lot higher than 4.4%). People can adjust their spending habits, but only up to a point, eventually something breaks.....

PeteBrant

It a stake in the ground, and shows a rising trend. I agree that a "cost of exisitng" rate would be higher. I wasn't expecting a 0.6% rise in one month though, that's pretty huge.

Carl2

How do they fiddle the figures to get inflation so low?
Absolutely everything seems to be rising in double figures, say 20-30% for example, so why is inflation not around that figure?

warrenm2

pity Lewis isnt still here to put his fantasical spin on the latest piece of NL horses**t. We all could do with a laugh...

s70rjw

iTrader: (2)

Makes a further mockery of the "in line with inflation" payrises offered to much of the public sector earlier this year. How can NL get so many things so very wrong? Even the summers seem worse over the last 11 years.

kingofturds

iTrader: (1)

I must be doing something wrong because my gas/electric/fuel/council tax/food seem to have gone up by at least 16% .Meanwhile my 2.2% pay rise does not seem to cover these costs

Odds on

Not having visited SN for a month or so, I can see doom and gloom is still top of the agenda.

(Works drying up though, so there may be a point to it.)

fast bloke

This rise is a direct result of increase in oil price in the previous months. The recent decrease in oil hasn't factored in yet, and will probably take a few months to do so, but if the current rate of decline in oil price continues, expect to see a -ve rate for inflation by next July, August.

That said - this is the first time I can remember that RPI has been higher than BoE base rate, so there is a strong possibility that the MPC will put up rates in the next few months. Difficult decision. Do you want a small recession with embedded inflation or a big recession with controllable inflation. There is no good outcome either way

r32

Surely not just oil prices, must have some link with the credit crunch and the inability of the Government to control interest rates.

lozgti

Interest rates should be going up to curb it.

They are just so flipping petrified of this stupid housing market that they haven't got the guts to do it.

B of E independant? Errr........

PeteBrant

The Government don;t control interest rates, the BoE do.
The credit crunch, if anything, will have a negative impact in inflation. Teh high inflation rate is almost completely down to commodities rising, and the fact that people cannot choose ot stop buying them.

PeteBrant

They don't want to put interest rates up because it will drive a lot of people under.

What's getting more expensive? Food, heating, fuel. You don;t get a whole lot of choice on whether you buy those things, add into that your mortgage going up by £100 a month and something's got to give.

The Chief

I am starting to think that we are in big trouble and its going to get worse. I really hope i'm wrong but i dont think i am.

Apart from one person that i know all of my mates are really quiet at work having a really hard time and some like me are on short time.

Of course there are exceptions to this but not many.

It seems that nowadays that we are just working our ***** off just to survive and pay bills.

Everywhere i turn something is going up in price (apart from my wages)

lozgti

How the heck do they know this?Do they just make things up that sound nice?

Bank inflation forecasts leave door open for rate cut | Reuters

Lets see.They couldn't predict what we are currently going through,indeed Mr Brown told us Boom and Bust etc were over.

I'm sorry but for as long as they (bank) avoid the issue(inflation) I reckon its going to get out of control

Gear Head

iTrader: (2)

Just fixed our mortgage for 3 years. Phew!

Gear Head

iTrader: (2)

Welcome to the majority of the worlds population problems! we have had it easy for too long.

Leslie

It was reported on the News that the real figure is over 10% and it is the unecessary items which are included in the published rates which artificially bring the figure down.

Les

Gear Head

iTrader: (2)

Yes but things such as cheap electronics and clothing distort that figure.

lozgti

Don't they say things like 'but a television is only £3 therefore life is good and cheap and inflation low'

Yes,my wife gets one every week with her weekly shop.

Different planet these lot live on

PeteBrant

Electronic goods and the like undoubtably have an effect on the overall figure, but the inflation calulations are weighted and there are hundreds of foodstuffs versus one small section for electronic goods.

There is an argument that we should have a true cost of existance rate, but don't fall for the old "A plasma TV brings down the rate" argument, because it simply isn't true.

The CPI rate is as valid as any other rate, in that it is an indication as to the rate of rise in the cost of living. We know it is harder than 2 years ago, and the CPI rate reflects that. (If things carry on the way they are going, it won't be long before the RPI is actually less than the CPI because of the falling property prices)

PeteBrant

It's not "artificially" bringing the figure down; the prices and items aren't invented. They are genuine.

The "Basket" of goods and services is detailed here:

http://www.statistics.gov.uk/elmr/04..._Wingfield.pdf

It doesn't just include food and fuel etc, it includes child minding prices, rail ticket costs, Magazine subscriptions - All sorts. It is a snapshot of how much overall prices are rising. And it serves its purpose as an indicator.

However,we are in a fairly unique situation at the moment. Inflation is being driven up, not by people having too much spare cash (which is usually the case) but by essentials costing more and more. And thats where the 10% comes in. It doesn't make the CPI rate "false".

boxst

Yes and that is the problem as the government and to a certain extent the Bank of England have no idea how to deal with it. They can't raise interest rates (as you would normally to curb inflation) as that would tip people over the edge. Interesting times.

Steve

PeteBrant

Quite.


The only solution as far as I see it is to correct what caused the problem in the first place; Bring commodity prices down. To do that you need to reduce the price of oil, and rebuild confidence in the Dollar.

Somehow...

lozgti

The true test is this.

There are two shopping baskets.My wife's(prudent and sensible shopper) and the governments(lying ,cheating bunch of spin spinning land based pirates)

My wife comes home and in her cut glass accent says 'The ****** shopping bill has now gone up to £? which equates to a 10******% increase'.(I say thats nice dear ).

The government shopper comes back and says 'cripes, everything has actually gone up 20% in the shops for the real shoppers...what do we do?' Just tell them our basket says its only 5% despite what they can see with their own eyes,they're all a bit daft our electorate.

Or something like that

PeteBrant

But unless that's all you buy, then it's not a true measure of inflation.

Example, when you get your salary, if all you did was but food, pay for your heating a petrol/diesel and pay the mortgage, then yes, your personal inflation rate would be pretty high.

But how many of us actually do that? The averagee person will go out for a pint, by a bottle of wine. Perhaps indulge in a hobby, go and see a film, or go to the theatre. All of these things have an effect on your personal inflation rate. And for every item that has not increase, or even reduced in price, takes some amount off the figure calculated from the "essentials".

That's why you cannot isolate the cost of shopping alone, it will be offset by other things you spend your money on.

jonny_693

iTrader: (5)

Are you a politician?