Tuesday, December 18, 2012
Mixed news on inflation
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

A clutch of inflation data today, which require some interpreting. Consumer price inflation was unchanged at 2.7%, which suggests calm but disguises a huge amount going on beneath the surface. So food, non-alcoholic beverages and domestic fuel bills were up, while petrol and diesel were down. RPI inflation fell from 3.2% to 3% on the back of lower motoring costs, housing and household goods.

Underlying CPI inflation, excluding food, energy and other volatile elements was 2.6%, so close to the headline rate. Inflation at constant tax rates was 2.4%. Whichever way you look at it, inflation was above the 2% target. More here.

Producer price numbers were relatively reassuring, with output prices for manufactured products up 2.2% on a year earlier in November, from 2.6% in October, while input prices were down 0.3%. Inflation is not, however, being driven by manufactured goods. More here.

Also today, the Office for National Statistics reports that house prices in the 12 months to October were up 1.5% on a year earlier, with prices stable in most of the country, rising in London and falling in Northern Ireland. Details here.