CPI hits 4.4pct

Generali

ManAtHome wrote: »

Or maybe going up. From Credit Action stats, personal debt is up 0.7% y-o-y. Yes, a lot less than during the binge, but when inflation is higher than wage increases, even 'no change' is an increase in debt.

Credit Action link http://www.creditaction.org.uk/helpful-resources/debt-statistics.html - latest stats are Jan 2011, but overall debt has been edging up from around £1.4 trillion for the last couple of years.

When I said 'real' I meant 'inflation adjusted'. If you adjust for inflation or even wages, debt is falling.

hallmark

Because they're a puppet committe, who in reality do whatever the Govt wants. They just allow the Govt to maintain the illusion it's not them deciding on policy. And also gives the Govt someone to blame later.

The MPC kept IRs artificially low because Brown wanted & needed the housing bubble to go on as long as possible.

The whole notion of a "neutral" committe - where the Govt gets to appoint it's own dove-ish members when it wants - is a joke. Can't believe anyone falls for it really, but it seems people do.

ILW

DervProf wrote: »

Yes, why would anyone in power want to look after their own self-interest ? Surely their priority would be to do what is right for the nation, rather than line their own pockets.

Sarcasm is the lowest form of wit.

stonethrower

ILW wrote: »

Sarcasm is the lowest form of wit.

But is also the funniest.

Cleaver

hallmark wrote: »

The MPC kept IRs artificially low because Brown wanted & needed the housing bubble to go on as long as possible.

There is a worrying amount of people on this forum who seem to think that the base rate exists to shape the housing market. You do concede that there were possibly some other rather more important reasons for lowering the base rate than just trying to meddle with house prices?

DervProf

ILW wrote: »

Sarcasm is the lowest form of wit.

Is it really ? Well I never.

DervProf

Cleaver wrote: »

There is a worrying amount of people on this forum who seem to think that the base rate exists to shape the housing market. You do concede that there were possibly some other rather more important reasons for lowering the base rate than just trying to meddle with house prices?

Like the cost of imported food, fuel etc ?

Anyway, you'd be forgiven for thinking that house prices are not an important reason, given the media coverage and those that predict disaster if house prices were to fall by a significant amount.

ILW

DervProf wrote: »

Is it really ? Well I never.

Personally, I prefer the lower forms of wit, the lower the better in fact.

Degenerate

lisyloo wrote: »

Why does it make any sense to strip out a tax rise?
We are measuring the increase in the cost of goods? VAT is part of that increase?

When measuring the effect on your pocket, one would not strip it out. Things have indeed become 4.4% more expensive. But it pays to recognize that a significant part of this is not monetary inflation, but a tax rise.

OTOH, When formulating monetary policy it does not make sense to base decisions on statistics that have been distorted by a one-off hit from a government policy decision. Interest rate policy is set to control the underlying inflation rate, not related to VAT.

angrypirate wrote: »

When Labour cut VAT the BoE used CPI falling to below 2% a reason to slash interest rates in fear of deflation. Now its convenient for the BoE to use the rise in VAT as a reason not to raise rate. Its either one or the other - it shouldnt be both.

Nonsense. Deflation was a reality caused by seizure of credit markets and resulting collapse in money supply. The bulk of the massive interest rate cuts took place After Lehman and before the VAT cut kicked in.

ILW

Degenerate wrote: »

When measuring the effect on your pocket, one would not strip it out. Things have indeed become 4.4% more expensive. But it pays to recognize that a significant part of this is not monetary inflation, but a tax rise.

OTOH, When formulating monetary policy it does not make sense to base decisions on statistics that have been distorted by a one-off hit from a government policy decision. Interest rate policy is set to control the underlying inflation rate, not related to VAT.




Nonsense. Deflation was a reality caused by seizure of credit markets and resulting collapse in money supply. The bulk of the massive interest rate cuts took place After Lehman and before the VAT cut kicked in.

No it wasn't, it never happened.