UK inflation falls below BoE's 2 pct target in June

Gorgeous_George

Best they cut interest rates then

GG

RabbitMad

Generali wrote: »

How would you define hyperinflation, please?


I think it's highly unlikely but I suspect we have different ideas about what constitutes hyperinflation.

Well not quite Mugabee levels of inflation but I reckon the government would like inflation at 10% for say 10 years. suddenly our debt has more than halved in value.

ruggedtoast

Everyones getting excited about this but we've yet to feel the icy maw of

GORDON'S TAX RISES

Coming soon - to a payslip, supermarket til, and petrol station near you.

And don't miss the exciting sequel

GORDON'S SWINGEING SPENDING CUTS

Coming soon to a school, hospital, and job centre near you.

Starring : Alastair "Darling" Darling and Gordon "It wasnt me it was America and Darling and Blair" Brown.

Generali

RabbitMad wrote: »

Well not quite Mugabee levels of inflation but I reckon the government would like inflation at 10% for say 10 years. suddenly our debt has more than halved in value.

Personally I would define hyperinflation as being inflation at a level such that if you go to work with enough money to buy lunch in your pocket, it won't buy you a cuppa at lunchtime.

10% pa isn't anything like hyperinflation IMO.

tuggy12

StevieJ wrote: »

No pay rise for the pensioners this year.

http://www.timesonline.co.uk/tol/money/consumer_affairs/article6114645.ece

The state pension increases every April in line with the previous September's RPI figure, so it rose by 5 per cent this month, from £90.70 a week to £95.25. The good news for pensioners is that it will never increase by less than 2.5 per cent, regardless of how far the RPI falls.

JayScottGreenspan

The ONS graph plotting the 12 months percentage change suggests inflation is falling:


But a simple plot of the monthly indices shows that really we hard a short sharp one-off deflation (interest rates, VAT) and then steady inflation at an annualised rate of ~3% since:

Also that short sharp one-off deflation will need to be reversed at some point when VAT and IRs go up.

Here are the RPI index figures:
May 08: 215.1
Jun 08: 216.8
..
May 09: 212.8
Jun 09: 213.4

So in May the annual percentage change was -1.1% (212.8/215.1 - 1).
In June the annual percentage change is -1.6% (213.4/216.8 - 1).
Nevertheless, the actual index went up by 0.3% in June!

I don't find any of this particularly reassuring.

andykn

JayScottGreenspan wrote: »

Here are the RPI index figures:
May 08: 215.1
Jun 08: 216.8
..
May 09: 212.8
Jun 09: 213.4

So in May the annual percentage change was -1.1% (212.8/215.1 - 1).
In June the annual percentage change is -1.6% (213.4/216.8 - 1).
Nevertheless, the actual index went up by 0.3% in June!

I don't find any of this particularly reassuring.

On the other hand, I believe that anything below 2% pa is considered less than ideal too. The rise looks relatively stable over the last few months; I'd be happy with inflation at 3-4% over the next few years.

nicko33

JayScottGreenspan wrote: »

and then steady inflation at an annualised rate of ~3% since:

I make the Jan to Jun RPI rise equivalent to 3.81% annually (CPI looks higher still)
and if the rest of the year were to continue at a smooth 3.81%
in the forthcoming months the annual RPI %ages would be
Jul -1.1%
Aug -1.1%
Sep -1.4%
Oct -0.7%
Nov +0.3%
Dec +2.1%

nicko33

andykn wrote: »

I'd be happy with inflation at 3-4% over the next few years.

Depends on what is causing the inflation, surely?

Unless you mean, 3-4% would be better than 10-15%

SilverStandard

Can anyone tell me what we are in now, deflation or inflation?

I am talking aboutthe big picture, and whats it looking like for next year?