Merv....."reasonably confident"

purch

......that CPI will fall back next year !!!

To somewhere around the target.

Somewhat confident that it will fall to below the target in 2013 :eek:

Graham_Devon

Well he stated it WOULD fall to target in 2011...and 2010.

Now he's only reasonably confident, when actually data is on his side?!

purch

http://www.bankofengland.co.uk/publications/inflationreport/ir11nov.pdf

Opening part of report:

The prospects for the UK economy have worsened. Global demand slowed. And concerns about the
solvency of several euro-area governments intensified, increasing strains in banking and some
sovereign funding markets. Household and business confidence fell, both at home and abroad.
These factors, along with the fiscal consolidation and squeeze on households’ real incomes, are
likely to weigh heavily on UK growth in the near term. Thereafter, the recovery should gain traction,
supported by continued monetary stimulus and a gentle recovery in real incomes. Implementation
of a credible and effective policy response in the euro area would help to reduce uncertainty and so
support UK growth, but its absence poses the single biggest risk to the domestic recovery.
CPI inflation rose to 5.2% in September. Inflation is likely to fall back sharply through 2012 as the
contributions of VAT, energy and import prices decline, and downward pressure from slack in the
labour market persists. But how far and how fast inflation will fall are uncertain. Under the
assumption that Bank Rate moves in line with market interest rates and the size of the asset
purchase programme remains at £275 billion, inflation is judged more likely to be below than above
the 2% target at the forecast horizon.

pqrdef

Interestingly, the ONS spokesman discussing the inflation figures yesterday said they didn't do predictions, not even next month.

I expect it'll turn out that the freshly-knighted Surmerv is talking about underlying inflation or structural inflation and there'll continue to be a succession of one-off factors, all operating in the same direction.

Yesterday's fall was partly ascribed to price-cutting in supermarkets. I suspect this may be rather temporary, and has a lot to do with getting people into the shop so they'll pick up lots of high-margin Christmas tat while they're in there.

ILW

On his past record, if he says it will fall, the likelyhood is that it will rise.

purch

Bank slashes inflation, GDP forecasts; more QE possible

http://uk.reuters.com/article/2011/11/16/uk-bank-rates-idUKTRE7AF0RW20111116

Graham_Devon

purch wrote: »

Bank slashes inflation, GDP forecasts; more QE possible

http://uk.reuters.com/article/2011/11/16/uk-bank-rates-idUKTRE7AF0RW20111116

In other words, we want more QE, therefore we will show a report that suggests QE is needed.

Graham_Devon

Can I just ask anyone who understands...

Howcome the Ireland rate of Inflation is 1.1%, yet ours is 5%?

All to do with whats measured? Or more to do with the currency?

HAMISH_MCTAVISH

Graham_Devon wrote: »

Howcome the Ireland rate of Inflation is 1.1%, yet ours is 5%?

All to do with whats measured? Or more to do with the currency?

Currency is a bit of it, but the bigger issue is economic collapse.

Have you seen the state of the Irish economy?:eek:

I'm quite sure we could also have Irish levels of inflation if we were willing to pay the price of Irish levels of economic devastation.

Which no rational person would be when they have other options....

Graham_Devon

They still import everything the same as we do though, and apparently most of ours is imported inflation.

ILW

HAMISH_MCTAVISH wrote: »

Currency is a bit of it, but the bigger issue is economic collapse.

Have you seen the state of the Irish economy?:eek:

I'm quite sure we could also have Irish levels of inflation if we were willing to pay the price of Irish levels of economic devastation.

Which no rational person would be when they have other options....

But we keep getting told that our high inflation is due to imported fuel, food, etc prices. Surely that is the same for iIeland. Or are their imports cheaper because they have a failing economy?