MSE News: Inflation falls to lowest level since November 2004

Former_MSE_Guy

This is the discussion thread for the following MSE news story:

"Inflation slid to its lowest level in almost five years during August, official figures showed today ..."

Read the full story:
Inflation falls to lowest level since November 2004

inspector_monkfish

09:35 15Sep09 - UK inflation slows less than expected in Aug

LONDON, Sept 15 - British consumer price
inflation slowed less than expected in August as transport
costs rose, partly offsetting a downward impact from utility
bills and food prices, the Office for National Statistics said
on Tuesday.
*********************************************************

CPI KEY FIGURES
AUG JULY F'CAST
CPI %YY 1.6 1.8 1.4
RPI %YY -1.3 -1.4 -1.5
RPI-X% YY 1.4 1.2 1.2

KEY POINTS
- Lowest annual CPI rate since January 2005
- Lowest annual rate of food and non-alcoholic beverages
inflation since June 2006
- Lowest annual rate of services inflation since August 2006

ANALYST COMMENTS:
STEPHEN LEWIS, MONUMENT SECURITIES
"Obviously it is not as good as expected and there is no
tendency for core CPI rate of inflation to moderate which must
be worrying to the MPC because it casts doubt on their
forecasts. Looking at the components this month, we seem to have
more of a bounce back in furniture and household equipment after
seasonal July sales than is usual."

nicko33

http://www.statistics.gov.uk/cci/nugget.asp?id=19

CPI 1.6% down from 1.8%
RPI -1.3% up from -1.4%
RPIX 1.4% up from 1.2%

kennyboy66_2

Isn't this the same headline every month ?

"UK inflation slows less than expected in xxx"

Also are benefits linked to RPI in Sept each year - do we expect to see them fall ?

lemonjelly

Is this due to the increased prices of houses, fuel increases, or just general everything is going up stuff?

I assume that this will have little/no bearing on the chances of interest rate increases?

Why is it worrying for the MPC?

inspector_monkfish

lemonjelly wrote: »

Is this due to the increased prices of houses, fuel increases, or just general everything is going up stuff?

I assume that this will have little/no bearing on the chances of interest rate increases?

Why is it worrying for the MPC?

09:30 15Sep09 UK AUG CPI ALL GOODS +0.6% YY, ALL SERVICES+2.9% YY, LOWEST SERVICES RATE SINCE AUG 2006

09:30 15Sep09 ONS- BIGGEST DOWNWARD EFFECT FROM GAS, ELECTRICITY, FOOD; BIGGEST UPWARD IMPACT FROM TRANSPORT

Sept 15 - The Office for National
Statistics released the following consumer price indices:

AUG JULY
CPI (HICP)
Mth-on-mth (pct) 0.4 UNCH
Yr-on-yr 1.6* 1.8

Core CPI (ex- energy, food,
(alcohol and tobacco)
Mth-on-mth (pct) 0.6 UNCH
Yr-on-yr 1.8 1.8

RPI
Mth-on-mth (pct) 0.5 UNCH
Yr-on-yr -1.3 -1.4
Index 214.4 213.4

RPIX (RPI ex-mortgages)
Mth-on-mth 0.5 UNCH
Yr-on-yr 1.4 1.2

NOTE - Consensus forecasts: (in percent)
mth/mth yr/yr
CPI 0.3 1.4
RPI 0.2 -1.5
RPIX 0.2 1.2

COMPONENTS OF CPI (pct):
AUG YR/YR JULY YR/YR
Food & non-alcoholic bevs -0.6 2.2** -0.4 4.1
Alcoholic bevs & tobacco 0.4 4.1 0.3 4.1
Clothing & footwear 1.3 -8.2 -3.2 -8.1
Housing,water,elec,gas,fuels 0.2 3.3 0.1 5.2
Furniture, hhold equip, main.1.5 3.0 -2.7 2.4
Health 0.5 2.9 0.7 2.5
Transport 1.6 0.3 1.7 -1.4
Communication -0.1 1.2 UNCH 1.5
Recreation & culture 0.2 1.8 0.1 2.0
Education UNCH 8.6 UNCH 8.6
Restaurants & hotels 0.1 2.0 0.1 2.0
Misc. goods & services 0.1 2.0 0.4 2.1
All goods 0.5 0.6 -0.6 0.7
All services 0.4 2.9*** 0.7 3.1
Fuels and lubricants 1.0 -10.0 0.7 -15.1
RPI housing component 0.4 -11.2 0.4 -11.3
* Lowest annual CPI rate since January 2005
** Lowest annual rate of food and non-alcoholic beverages
inflation since June 2006
*** Lowest annual rate of services inflation since August 2006

lemonjelly

inspector_monkfish wrote: »

09:30 15Sep09 UK AUG CPI ALL GOODS +0.6% YY, ALL SERVICES+2.9% YY, LOWEST SERVICES RATE SINCE AUG 2006

09:30 15Sep09 ONS- BIGGEST DOWNWARD EFFECT FROM GAS, ELECTRICITY, FOOD; BIGGEST UPWARD IMPACT FROM TRANSPORT

Sept 15 - The Office for National
Statistics released the following consumer price indices:

AUG JULY
CPI (HICP)
Mth-on-mth (pct) 0.4 UNCH
Yr-on-yr 1.6* 1.8

Core CPI (ex- energy, food,
(alcohol and tobacco)
Mth-on-mth (pct) 0.6 UNCH
Yr-on-yr 1.8 1.8

RPI
Mth-on-mth (pct) 0.5 UNCH
Yr-on-yr -1.3 -1.4
Index 214.4 213.4

RPIX (RPI ex-mortgages)
Mth-on-mth 0.5 UNCH
Yr-on-yr 1.4 1.2

NOTE - Consensus forecasts: (in percent)
mth/mth yr/yr
CPI 0.3 1.4
RPI 0.2 -1.5
RPIX 0.2 1.2

COMPONENTS OF CPI (pct):
AUG YR/YR JULY YR/YR
Food & non-alcoholic bevs -0.6 2.2** -0.4 4.1
Alcoholic bevs & tobacco 0.4 4.1 0.3 4.1
Clothing & footwear 1.3 -8.2 -3.2 -8.1
Housing,water,elec,gas,fuels 0.2 3.3 0.1 5.2
Furniture, hhold equip, main.1.5 3.0 -2.7 2.4
Health 0.5 2.9 0.7 2.5
Transport 1.6 0.3 1.7 -1.4
Communication -0.1 1.2 UNCH 1.5
Recreation & culture 0.2 1.8 0.1 2.0
Education UNCH 8.6 UNCH 8.6
Restaurants & hotels 0.1 2.0 0.1 2.0
Misc. goods & services 0.1 2.0 0.4 2.1
All goods 0.5 0.6 -0.6 0.7
All services 0.4 2.9*** 0.7 3.1
Fuels and lubricants 1.0 -10.0 0.7 -15.1
RPI housing component 0.4 -11.2 0.4 -11.3
* Lowest annual CPI rate since January 2005
** Lowest annual rate of food and non-alcoholic beverages
inflation since June 2006
*** Lowest annual rate of services inflation since August 2006

I'm gonna look at this for the next 6 hours, then post to see if I've come anywhere near understanding it!;):D

inspector_monkfish

lemonjelly wrote: »

I'm gonna look at this for the next 6 hours, then post to see if I've come anywhere near understanding it!;):D

sorry, it doesn't paste very well !!

lemonjelly

inspector_monkfish wrote: »

sorry, it doesn't paste very well !!

Don't worry about that, I'm grateful to you for sharing the information.

Just gotta work out how to read it!;):cool:

I bain't no city high flyer!

andykn

lemonjelly wrote: »

Don't worry about that, I'm grateful to you for sharing the information.

Just gotta work out how to read it!;):cool:

I bain't no city high flyer!

It might be easier to read here:

http://www.statistics.gov.uk/pdfdir/cpi0909.pdf

What's complicating things is that prices were falling last year but are rising now. If you look at the rise in the index over the last 6 months, it's about 1.5% up, around 3% annualised. So, in theory, if nothing changes, annual inflation in 6 months will be 3%, over the 2% target.