Thursday, April 20, 2006
Inflation dog is still not barking
Posted by David Smith at 10:15 AM
Category: Thoughts and responses

Another set of inflation figures, and another surprise on the downside. CPI inflation fell to a below-target 1.8%, according to the Office for National Statistics, and the old RPIX measure also fell, from 2.3% to 2.1%. The recent increases in energy prices have yet to feed through but we are starting from a low base.


Probably because somebody forgot to add in house price inflation.

Posted by: Werewolves at April 20, 2006 11:58 AM

And what about the Starbucks coffee (see below)?... Obviously not weighted heavily enough.

Posted by: Werewolves at April 20, 2006 12:01 PM

I must say, those statisticians have become very adept!

I wonder if anyone still believes their figures though?

Posted by: Paul Owen at April 20, 2006 01:26 PM

Of course house prices are excluded by definition from CPI and RPIX - they are in RPI though under depreciation.

While later fuel and utility price increases will push up prices - the relevant question is whether the increases will be larger than last year.

Perceived inflation will differ between house-owners and tenants - the weighting assumes everyone enjoys shared ownership - and mortgage rates are the key element in the variation of perceived inflation for homeowners. This is probably the bigget unreality in price indices - an average spender spends on both mortgage and rents but this is a rare condition.

Posted by: paulbiv at April 21, 2006 03:37 PM
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