I really should have posted something on those shocking inflation numbers when they came out last week. In November, inflation, measured by the retail price index, rose to 4.3 per cent, up from 4.2 per cent in October. RPIX inflation, which is all the all items in retail price index except mortgage interest payments – was 3.2 per cent in November, up from 3.1 per cent in October.
The chart above highlights an important issue regarding UK inflation today. The consumer price index under-states inflation by about 2 full percentage points. Notice how the divergence is systematic. Since 2005, the RPI has been consistently above the CPI.
However, the Bank of England have the CPI as their bogus target. Yet data from the Office of National Statistics shows clearly that actual high street inflation is much higher.