CPI falls to 3.6%

Generali

oldvicar wrote: »

Don't worry about the £51,000,000,000 drop in money supply. That's just been fixed by printing another £50,000,000,000 - close enough.

Sovereign defaults are a worry. When they happen, I expect UK banks will be kept afloat by more BoE printy printy - so I'd be concerned about the longer term inflation outlook.

£28,000,000,000 was in December alone!

The whole inflation/deflation thing is interesting. QE stands at £275,000,000,000 with another 50 yards to add to that. That's about 30% of GDP that has been printed with no obvious signs of inflation yet (5% doesn't count as high inflation IMHO). So what's the BoE to do? Keep printing money until the currency is debased and then say, 'Sorry about that chaps' as the mob rampages down Threadneedle Street or print conservatively and watch deflation creep nearer?

It's a tough call and I don't think there is a good answer to this. It reminds me of the apocryphal Irishman giving directions saying, "Well you don't really want to start from here....".

We'll see I guess.

StevieJ

Batchy wrote: »

The responses on here are what drive me mad on here.

OP inflation falls to 3.6, comment about the year on year figures and they start to support the discussion based on monthly figures. I thought we established last year that monthly figures are just noise.
.

I think the monthly comment was merely a retaliation against the people who were pedantically ridiculing commentators that were not quite using the correct phraseology to describe a diminishing inflation rate. The irony being that prices actually did fall over the most current recording period we have and are likely to do so for the next couple pf months.

Generali

michaels wrote: »

Hmm - why does it take 3-6 months? I was thinking the drop was very small given we were told VAT was adding about 1.3% to the index?

Apropos of nothing, the latest retail sales figures show an implied goods inflation rate of 2.3% as volumes rose 2% and value of sales rose 4.4% YoY. (NB the ONS shows the deflator which is 2.2% rather than the implied inflation rate).

LINK

For December 2011, the equivalent figures were volumes up 2.6% and values up 6.2%. I make the implied goods inflation rate 3.4%.

These numbers include petrol/diesel but not things like haircuts, housing and utilities.

Darthvader

The CPLie could go back down to their goal of 2%. but everyone can feel something is wrong when they have less of their same paycheck left for the same expences.

The lesson is real inflation is way more than the CPLie would have us think.

nicko33

Darthvader wrote: »

The lesson is real inflation is way more than the CPLie would have us think.

How much more is "way more"?
Is "real" inflation 10%? 20%?