Wednesday, 18 February 2009

Inflation - down but not out

From the FT.....

Inflation is more entrenched than many economists had imagined, easing only marginally in January as the weaker pound pushed up the price of imports and offset much of the benefit of lower fuel and housing costs.

The consumer prices index rose in January at a year-on-year rate of 3 per cent, down from a 3.1 per cent rate in December, official figures showed on Tuesday. But retail prices – the measure of inflation felt by most households – defied economists’ expectations of a contraction, registering a 0.1 per cent year-on-year rise in January as rising prices of household goods offset some of the impact of falling mortgage interest payments.

Significantly, “core” inflation – a measure that excludes food, fuel, alcohol and tobacco – rose in January to 1.3 from 1.1 per cent.

7 comments:

Mitch said...

I'm sure they can juggle basket to get the figure they want.

dearieme said...

“core” inflation – a measure that excludes food, fuel, ..... - so it's not "core" in the sense of excluding necessities. It's core, I presume, in some sort of economists' fantasy sense.

Anonymous said...

Things never get cheaper in the UK. That is an everlasting truth of the UK economy. Things can't get cheaper for several reasons: we import most things, we have a very inefficient workforce with stroppy attitudes, our business people are some of the worst in the world.

sobers said...

@ anonymous 9:13: plus we have an interfering govt that keeps putting more and more costs onto businesses, which, surprise, surprise, end up being paid by the consumer. Eventually there'll be a few massive firms in each sector, cos all the small ones have been driven out of business by all the red tape. Then they can charge what they like. Just like the supermarket sector is now.

Anonymous said...

Dearieme - "core", exactly. Every time an inflation measure becomes inconvenient governments devise a new one RPI RPIX CPI, Core.... Eventually there will be an index of "those things which are not rapidly going up in price presently".

B. in C.

Rick said...

All indices are a waste of time as the decisions made on what include and what to leave out and weightings of items are in reality totally arbitrary!

Anonymous said...

Only corrupt governments and their stooges in the media could get away with calling food and fuel non-core consumer items.