Inflation will rise faster than expected

Graham_Devon

I'd like to know whom this shocks.

Anyway...

The key consumer prices index (CPI) for October is expected to have reversed its recent fall to rise from 2.2pc in September to 2.5pc, when the Office for National Statistics publishes the figures on Tuesday.

In its three-monthly update on the economic outlook on Wednesday, the Bank will admit that inflation is proving to be more “sticky” than hoped. However, it is expected to sound a more positive note on UK growth than in previous reports.

It's expected that the BOE will re-visit and increase their inflation expectations in it's three monthly update.

http://www.telegraph.co.uk/finance/economics/9669403/Inflation-will-rise-faster-than-expected.html

michaels

Great news for the BoE and its policy of inflating away debt with negative real interest rates - the banks worst nightmare is low or negative inflation resulting in tighter monetary conditions which they are powerless to counter.

Inflation exceeding expectations is an added bonus as it shows that the BoE maintains some credibility despite its policy objective.

grizzly1911

Are we surprised?

Thrugelmir

grizzly1911 wrote: »

Are we surprised?

Do we have any control over inflation?

CLAPTON

many of us expect quite large rates of inflation over the next few years

all that printing money will have a consequence

wotsthat

Single months figure which hasn't been released yet - noise about noise.

We're in a downward trend with CPI at a three year low. The article refers to the upward pressure on CPI - tuition fees, energy costs & food - none of them are under the control of the BoE.

Is this a turning point and the trend reversing? We should know in a year or so.

moneyinmypocket

Fantastic news, hopefully we will see a good dose of hpi soon

Graham_Devon

wotsthat wrote: »

Single months figure which hasn't been released yet - noise about noise.

We're in a downward trend with CPI at a three year low. The article refers to the upward pressure on CPI - tuition fees, energy costs & food - none of them are under the control of the BoE.

Is this a turning point and the trend reversing? We should know in a year or so.

That's the point. We've pretty much (looking at the data only going forward) come to the end of that downward trend.

This isn't looking at one months data, it's looking at all the data and projecting. CPI is a backward looking indicator, so it's easy to look at that data and compare to what's happening now.

GeorgeHowell

It's "sticky" largely because virtually unregulated cartels in key sectors like energy and fuel and allowed to price increase virtually as they like.

JonnyBravo

Graham_Devon wrote: »

I'd like to know whom this shocks.

All the people who kept banging on about deflation?
For once GD we have been in total agreement. It's not if this fresh money escapes, it's when this new money escapes that inflation will return with a bang. IMO.

ILW

JonnyBravo wrote: »

All the people who kept banging on about deflation?
For once GD we have been in total agreement. It's not if this fresh money escapes, it's when this new money escapes that inflation will return with a bang. IMO.

Probably a bit of a shock to Merv, though he seems to be surprised by everything that happens.