We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
MSE News: Inflation unchanged but prices still soaring
Former_MSE_Helen
Posts: 2,382 Forumite
This is the discussion thread for the following MSE News Story:
"The RPI stood at 5.2 per cent, while the less representative CPI, which does not include housing costs, remained at 4.5% ..."
"The RPI stood at 5.2 per cent, while the less representative CPI, which does not include housing costs, remained at 4.5% ..."
0
Comments
-
This bears out what the BoE has been saying, that the rise inflation is a temporary situation. Hopefully we'll be seeing inflation going down from next month onwards. More importantly it strengthens the hand of those on the BoE who want to keep rates at 0.5%.0
-
I suppose it depends on your definition of "temporary"RenovationMan wrote: »This bears out what the BoE has been saying, that the rise inflation is a temporary situation.
.Income tax was introduced as a temporary measure in 1798.
Unlikely, with gas and electricity prices set to rise by 10-20% and no sign of any reduction of other commodity prices.RenovationMan wrote: »Hopefully we'll be seeing inflation going down from next month onwards.
The BoE is sadly more interested in growth figures these days, so you are probably right about the base rate. Of course this will drag sterling down further, which makes imports dearer, adding yet more to inflation.RenovationMan wrote: »More importantly it strengthens the hand of those on the BoE who want to keep rates at 0.5%.0 -
The trouble is King has been saying that for years and has been consistently wrong. Amusingly the Bank of England pension scheme trustees don't believe a word the Governer of the Bank of England is saying and have moved 95% of the pension schemes assets into index linked investments!RenovationMan wrote: »This bears out what the BoE has been saying, that the rise inflation is a temporary situation.0 -
Bah - 'temporary' is so last year (and the year before that, and the year before that...).
We're now in SOTI-land... http://www.bankofengland.co.uk/publications/quarterlybulletin/qb110202.pdf0 -
Sceptic001 wrote: »The BoE is sadly more interested in growth figures these days,
it isn't - its mandate is inflation, on a 2 year view. It has no mandate on growth0 -
-
Sceptic001 wrote: »In theory yes, but it has allowed inflation to exceed its target for over two years. Actions (or lack thereof) speaker louder than mandates.
How exactly do you propose that the BOE should act then? It only has one tool and raising interest rates is pointless as inflation is being driven by commodity prices and tax rises! Raising interest rates will only ADD to inflation.
The tool is only useful when inflation is being driven by excess demand caused by profligate consumerism which is surely NOT the case at present?If you feel my comments are helpful then I'd love it if you 'Thanked' me!
0 -
Failure to meet its target doesn't prove it was aiming at a different target.
If the govt increases VAT now, or the oil price goes up now, BoE shouldn't increase interest rates unless it considers inflation in 2 years time will be above 3% - the impact on inflation over the next year is irrelevant - now you can argue wether BoE is set the right target - maybe it should have a broader remit (the fed's mandate includes growth), or that its inflation target should be a blend of 1 and 2 year targets, but you can't criticize the BoE for that but the target setters0 -
Does it? You have to look behind the headlines and if you did you would realise that the annual inflation rate would have actually increased this month compared to last if it was not for when Easter was this year.RenovationMan wrote: »This bears out what the BoE has been saying, that the rise inflation is a temporary situation.
The annual change in transport costs, and particularly air and sea fares, fell massively this month compared to last month. This is because when transport costs were collected for April 2011 they were during Easter when many fares were higher due to the obvious increased demand during holiday periods. Easter did not fall in the price collection period last year so the same fall in fares between April and May did not occur. The effect of this is that April's inflation figure was higher then it should have been because of a particular event. If price levels were taken for a few days earlier or later then they were, you would actually have gotten a lower inflation figure for April. Therefore if we take out the effect of Easter April's true annual inflation rate was actually lower, and so this month the annual inflation rate has increased probably around 0.2 to 0.3 percentage points.
Taking price levels during a holiday period when those prices would not be representative of the month seems to be very bizarre. Surely as when Easter falls differs every year, you need to take account of it in your methodology otherwise you're not comparing apples with apples.Did you really mean to put loose?
Lose: no longer possess, not to retain, unable to find
Loose: not firmly or tightly fixed in place0 -
Maybe you are right, in which case the BoE is guilty of staggering incompetence. Two years ago it was forecasting inflation would be below target by now. Most other forecasters were far more accurate, predicting higher inflation.Failure to meet its target doesn't prove it was aiming at a different target.
One year ago it was forecasting inflation would be below target by 2012. Now it admits it will still be above target. The BoE's credibility is rapidly disappearing down the toilet.
But you can criticise the BoE for getting its forecasts wrong.If the govt increases VAT now, or the oil price goes up now, BoE shouldn't increase interest rates unless it considers inflation in 2 years time will be above 3% - the impact on inflation over the next year is irrelevant - now you can argue wether BoE is set the right target - maybe it should have a broader remit (the fed's mandate includes growth), or that its inflation target should be a blend of 1 and 2 year targets, but you can't criticize the BoE for that but the target setters0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.4K Banking & Borrowing
- 253.3K Reduce Debt & Boost Income
- 453.8K Spending & Discounts
- 244.4K Work, Benefits & Business
- 599.7K Mortgages, Homes & Bills
- 177.2K Life & Family
- 258K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards