Over the last ten years, UK services inflation has never been below two percent. As often as not, it has been above four percent.
The story of UK inflation is straightforward. Cheap manufactured goods from Asia kept the inflation rate low, which the service sector, which can not easily be substituted by foreign competitors just kept raising their prices.
If you want proof, just take a look at tube prices in London.
4 comments:
This was Gordon Browns economic miracle in a nutshell. It was the lack of the usual UK inflationary boom that should have hit us in 2002-5 (other than house prices of course!) that convinced him (and plenty of others) that he had abolished boom and bust.
You inspired me to do a similar chart for the United States.
Services Inflation
More to the point look at how MPs' expenses have gone up.
PS. I think it was housing inflation which caused those service sector charges to go up.
The Tube drivers have won 20% wage increases over 4 years.
This will take them to £50k basic.
The young ones may be able to afford a flat in London now. Those already on the ladder will be reasonably comfortable I should think.
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