inflation

horace_2

Inflation is caused by the devaluation of a currency, when this happens one needs more devalued notes to purchase a good..

Price increases due to supply / demand are just that, a price increase. The price of the good has increased but not due to devaluation.It has increased because of supply and demand issues only. That increase in price is not inflation.

h

Exo

In June, the price of oil reached $150 per barrel.
Soon after, the energy companies increased their prices by 30% as they are linked to the price of oil (so they say).
Oil has now dropped to $80 per barrel but the energy prices remain high.
Is that not inflationary to the consumer?

Seajays

horace wrote: »

Price increases due to supply / demand are just that, a price increase. The price of the good has increased but not due to devaluation.It has increased because of supply and demand issues only. That increase in price is not inflation.

h

True, a price increase is not inflation, but price increases can affect inflation. Please have another go at reading my reply number 29 above.

nicko33

IGK wrote: »

"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.

No, it is linked to the house price index.
I'll try to find a link for it. I saw it in the ONS list of items in it's "basket"

edit:
http://www.statistics.gov.uk/elmr/04_08/downloads/ELMR_Apr08_Gooding.pdf
see in Annex B, under Housing, separate items for:
...
Mortgage Interest - Average interest payments (estimated/modelled)
Depreciation - Depreciation costs proxy (price index for houses purchased with a mortgage)
Council Tax
Water and Other Charges
Repair and Maintenance Charges
DIY Materials
...

Seajays

nicko33 wrote: »

No, it is linked to the house price index.
I'll try to find a link for it. I saw it in the ONS list of items in it's "basket"

edit:
http://www.statistics.gov.uk/elmr/04_08/downloads/ELMR_Apr08_Gooding.pdf
see in Annex B, under Housing, separate items for:
...
Mortgage Interest - Average interest payments (estimated/modelled)
Depreciation - Depreciation costs proxy (price index for houses purchased with a mortgage)
Council Tax
Water and Other Charges
Repair and Maintenance Charges
DIY Materials
...

See also...

"There is also a depreciation component, which measures the cost to owner-occupiers of maintaining their house at a constant quality, such as occasional renovation. This varies with house prices."

http://www.incomesdata.co.uk/report/report855.pdf

and

Q: What is housing depreciation and why is it included in the calculator?
A: The cost of owning your house or flat is a complex area of statistics. The calculator uses the same approach as the official Retail Price Index (RPI). This identifies three elements of the cost of owning your own property:

1. The cost of day to day housing repairs, maintenance, and DIY;
2. The cost of any mortgage interest payments (see below);
3. What is known as housing depreciation, which represents the average cost of major repairs or renovations needed to maintain the property at a constant quality.

http://www.statistics.gov.uk/pic/faq.asp

nicko33

OK, thanks for that.

altocumulus

Anyone completed this? http://news.bbc.co.uk/1/hi/business/7669072.stm

Mine came out at 8.8% !....

Seajays

Yep - mine came out at 2.5% - Woo-hoo! :j

confused31_2

Mine was 9.1% lucky im getting the rise lol

confused