inflation too fall sharply

Masomnia

EchoLocation wrote: »

So is VAT being reduced then?

It's staying at 20%.

The figures are year on year, so when you compare 2011 to 2010 a good chunk of the increase is down to VAT going up from 17.5% to 20%. Now that it won't change, VAT won't make inflation look higher, as you're comparing 20% in Jan 2012 with 20% in Jan 2010.

RUN_RABBIT_RUN

DervProf wrote: »

So, it is assumed that there is no food inflation ?

The loaf of bread and litre of milk that I regularly buy have not increased in price, but such "luxuries" as yoghurt, margarine and canned soup have recently increased by more than 5% in some stores recently.

food prices go up and down all the time, it only gets crowed about on here when they've gone up 'round my way'

canned soup currently 50p a tin for heinz in asda, own brand soup is 5 tins for £2 which is the same as its been for ages

milk seems to have actually gone down recently, 4 pints of whole milk from tesco 1.18 or just £1 from the likes of lidl and iceland

we never here about the price drops, only the rises - bread should be £10 a loaf by now :rotfl:

EchoLocation

Masomnia wrote: »

It's staying at 20%.

The figures are year on year, so when you compare 2011 to 2010 a good chunk of the increase is down to VAT going up from 17.5% to 20%. Now that it won't change, VAT won't make inflation look higher, as you're comparing 20% in Jan 2012 with 20% in Jan 2010.

Precisely. It's simply falling out of a number on a spreadsheet. The way it gets put forward as 'falling out of the calculation', is designed to make people think they will be paying less for things. The reality is people still have to pay 20% VAT, so the resulting lower inflation figure is essentially meaningless to everyday life.

Masomnia

EchoLocation wrote: »

Precisely. It's simply falling out of a number on a spreadsheet. The way it gets put forward as 'falling out of the calculation', is designed to make people think they will be paying less for things. The reality is people still have to pay 20% VAT, so the resulting lower inflation figure is essentially meaningless to everyday life.

Yep, the damage in terms of loss of value of wealth has been done, even the coming figures are lower.

ChiefGrasscutter

EchoLocation wrote: »

So is VAT being reduced then?

They should put it up to the euro standard of 23%

Masomnia

ChiefGrasscutter wrote: »

They should put it up to the euro standard of 23%

I'm sure it'll happen eventually.

If it came with a cut in income tax I'd be ok with that. Shan't hold my breath though.

DervProf

RUN_RABBIT_RUN wrote: »

food prices go up and down all the time, it only gets crowed about on here when they've gone up 'round my way'

canned soup currently 50p a tin for heinz in asda, own brand soup is 5 tins for £2 which is the same as its been for ages

milk seems to have actually gone down recently, 4 pints of whole milk from tesco 1.18 or just £1 from the likes of lidl and iceland

we never here about the price drops, only the rises - bread should be £10 a loaf by now :rotfl:

Own brand soup in Aldi was 39p, just gone up to 42p.

Bread prices have been static for quite a while.

Lidl's Luxury Museli went from £1.49 to £1.69 (or was it higher ?) not so long back. Often, it used to be on offer for £1. Now it's on offer for £1.49. Their lean steak mince was £2.49 until recently, last time I saw it it was £2.69. These are quite hefty price increases on cheap, basic items.

Yes, there are special offers around, but I simply look at the prices of some of the things that I regularly purchase, and it is not very often that I have recently seen price drops on anything.

sheffield_lad

EchoLocation wrote: »

Precisely. It's simply falling out of a number on a spreadsheet. The way it gets put forward as 'falling out of the calculation', is designed to make people think they will be paying less for things. The reality is people still have to pay 20% VAT, so the resulting lower inflation figure is essentially meaningless to everyday life.

Well if you call it meaningless it means all inflation figures are the same as this is how it works for everything month by month based on a 12mth cycle its how we measure inflation.

As for food inflation between Oct 2010 - June 2011 food prices increased by 5.1% we have not seen this increase since then so some of that 5% increase will drop out after June hence why the drop is being reported as going down in Feb for VAT and Summer as food also drops out. Its just maths the biggie was/is VAT and when that is no longer adjusted for (Feb), the inflation rate will fall by 1.3% points.

Batchy

Might have 2.5%increase in VAT Dropping out but it's the fuel increases and extra cost of transportation, extra costs of energy for cooling and heating , even packaging that will keep inflation high!

EchoLocation

howee wrote: »

Well if you call it meaningless it means all inflation figures are the same as this is how it works for everything month by month based on a 12mth cycle its how we measure inflation.

I'm aware of how inflation is measured, I was pointing out that it's the prices in the real world that affect people, not a percentage on a spreadsheet. Inflation is never properly explained - deliberately so imo - when reported, and it's presented to us as prices are 'falling', when in actual fact prices are still increasing only at a slower rate.