inflation

Milarky

altocumulus wrote: »

Here's a wee snippit from the BBC web site on the current inflation http://news.bbc.co.uk/1/hi/business/7669841.stm

One thing I wouldn't bet not going up - and not going up by more than inflation either - is the Council Tax next year. The year before a general election is when governments let CT go up more than usual so that the following year - which is the year of the election it can be more modest. That's the increase the voters 'remember'. And of course then there's the year just after a general election too....

Oblivion

Fella wrote: »

Anything to keep that 'ol house bubble going until the next election.

How very true. I hope it comes back to bite them in the !!!!. What we have here may rightly be perceived as a financial crisis, but it is also the perfect opportunity to bring the financial system under proper regulation and introduce some sanity ... sadly it seems politics and politicians will fail us yet again.

Dave.

confused31_2

I hope inflation goes down, todays rpi rate is what my wage rise is based on this year begining in November it was either 3% or .5% above the rpi rate which ever was the highest so it will give me a 5.5% wage rise.

Which isnt that much, but if it falls at least they cant take the wage rise back off us.

Having said that where i work i have been took of nights loosing over 200 pound a month and i still dont believe the inflation figures are true to what we are all paying for.

confused

Joe65_2

confused31 wrote: »

I hope inflation goes down, todays rpi rate is what my wage rise is based on this year begining in November it was either 3% or .5% above the rpi rate which ever was the highest so it will give me a 5.5% wage rise.

You're still getting inflation busting pay rises, on the slide into a Recession ?

Does no-one remember the 70s , when the Government tried to stave off the effects of rising fuel prices by pumping money into the economy.
The result was almost a decade of misery, economic stagnation and rampant inflation, soaring to almost 27% !

Well never have they pumped so hard or so fast as last week.

Increasing the money supply just fans the flames of inflation.

Of course it's all different today , 'though the only real difference is how it's now on a much more global & co-ordinated scale.

The inflation only subsides long after the money supply has dried up - for real.

Index Linking is right now very Smart Thinking - NS&I, wait for Me.

pumpndump

The_Dangerman wrote: »

I don't think there is anything sinister in that, all the indicators are showing that inflation is highly likely to fall away. The 3 options of inflation going up, staying the same or going down are, at this moment in time, not all equally likely. The recession will mean commodity prices will rapidly fall away.

They are now saying that all indicators are showing that inflation is highly likely to fall away. They were saying the same thing a few months ago they were saying it last year. When inflation hits 9% they'll be saying it again.

Also, never mind a OR b OR c. You can have inflation AND recession at the same time. I know. I've lived through it.

Aegis

pumpndump wrote: »

They are now saying that all indicators are showing that inflation is highly likely to fall away. They were saying the same thing a few months ago they were saying it last year. When inflation hits 9% they'll be saying it again.

Also, never mind a OR b OR c. You can have inflation AND recession at the same time. I know. I've lived through it.

From what I've seen they were predicting a rise to about 5-5.5% followed by a gradual decline back to the norm, which is why they felt that the rate cuts earlier this year were justified despite rising inflation.

They've got the first part right, now let's see what effect falling oil costs have on the next few figures.

horace_2

bonsoirbonsoir wrote: »

Inflation is partly caused when demand exceeds supply, causing rising prices, hence the negative effect on inflation that a recession will cause.


Absolute twaddle!!!

When demand exceeds supply prices generally increase- that is not inflation, it is merely a price increase.
Inflation is caused by an increase in money supply not supported by an increase in economic growth. When a Government prints money it devalues that already in circulation. Remember the 1920`s Germany?


h

Seajays

horace wrote: »

Absolute twaddle!!!

When demand exceeds supply prices generally increase- that is not inflation, it is merely a price increase.
Inflation is caused by an increase in money supply not supported by an increase in economic growth. When a Government prints money it devalues that already in circulation. Remember the 1920`s Germany?

What you're describing is certainly one way that inflation occurs (Demand-pull inflation). But it is also true that a general increase in prices across the economy is also inflation. This could be caused by demand exceeding supply. Take oil for example, as it has very wide ranging uses, manufacturing, transport etc., which tends to mean a dip in supply, and subsequent increase in prices, will put the price of many things up, and will therefore increase inflation (Cost-push inflation).

More general info on inflation here: http://www.bankofengland.co.uk/education/targettwopointzero/inflation/whatsInflation.htm or look up the Keynsian model of inflation. (Other models are available! )

(In the Keynesian model, there's also 'built-in' inflation which is to do with the whole wage-price spiral, and ongoing demand-pull/cost-push inflation)

IGK

Milarky wrote: »

National Statistics inflation nugget (found it)

CPI +0.5% @ 5.2% to September
RPI +0.2% @ 5.0% to September
RPIX + 0.3% @ 5.5% to September

The main reason for RPI (used from wage negotiations and annual benefit unprating) falling behind the others it indices is that it is currently being flattered because:

"there was a large downward contribution from housing with the main effect coming from house depreciation partially offset by buildings insurance"

Blow me over, but I never recall all that house appreaciation over 8 or 10 years coming up as a reason why the RPI was so low all those years?

Next month's figures out on 18 November (5 weeks today)

"House depreciation" means the costs involved in maintaining your house. It's nothing to do with actual house prices. It's a badly-named term. House maintenance would be better.

Exo

horace wrote: »

Absolute twaddle!!!

When demand exceeds supply prices generally increase- that is not inflation, it is merely a price increase.
Inflation is caused by an increase in money supply not supported by an increase in economic growth. When a Government prints money it devalues that already in circulation. Remember the 1920`s Germany? h

I see your point but surely all it means is that there are many inflationary causes.

Take oil as an example. Huge demand from USA, China and India and the price of oil increased. The knock on effect was that fuel, energy, transport and food prices all increased in the UK.
That was inflationary, not just an increase for a product.