Monday, 14 July 2008

UK producer prices - double digit inflation

I wish someone could tell me when this deflationary cycle is going to arrive. UK prices are taking off like a rocket.

In June, producer prices were 10 percent higher compared to the same month in 2007. The chart tells its own story. Prices are running out of control.

The choices for the MPC are getting starker. Inflation is not subsiding, the policy of waiting and hoping is an abject failure. Sooner of later, rates will have to rise.

5 comments:

Josh said...

Prices are out of control.

electro-kevin said...

18.5% inflation according to the Mirror.

I believe it too.

Anonymous said...

By December 2008.

Thanks

Nick

sobers said...

"By December 2008.

Thanks

Nick"

What, you mean when the current spike in oil prices begins to fall out of the CPI/RPI figures? That's not including any fall in oil/commodity prices that will come with a rush when the market realises that the demand for oil from the BRICs will be considerably lower in future due to a) reduced demand for their manufactures from the indebted West, and b) their economies go south as a result of govt action to reduce their rampant inflation.

Am I close?

Anonymous said...

Yeah, close but......

.... defined correctly inflation is increase in money supply. Credit is being vapourised so fast, and money velocity is slowing so abruptly that it's deflation already. To be seen by the massive writedowns in assets of every class bar commodities.

Deflation is already here. But for those who choose to define inflation via the CPI, December ought to do it.

Nick