Inflation will rise faster than expected

Generali

grizzly1911 wrote: »

Merv is a part of the governemnent smoke and mirrors machinery.

Divide, confuse, ofcubscate.

The MPC has two roles. Sometimes they are contradictory. The BoE has many more; the MPC is a small part of what the BoE does and Mr King runs all of the BoE, he doesn't just Chair the MPC.

That doesn't mean that there's a conspiracy.

lemonjelly

It's confirmed - 2.7%, not 2.2% - breaking news on the beeb.
http://www.bbc.co.uk/news/business-20310102

Generali

From the horses mouth:

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/october-2012/index.html

The main upward pressure came from the education sector (university tuition fees) with smaller upward contributions from food & non-alcoholic beverages and transport. These were partially offset by downward pressures from the housing & household services, recreation and miscellaneous goods & services sectors. The CPI stands at 124.2 in October 2012 based on 2005=100

So the biggest upward pressure on prices is Uni fees which are paid by a tiny minority of the country and generally on tick. It's probably not catastrophic or even slightly bad.

worldtraveller

Consumer Prices Index (CPI): Briefing on the monthly movement between September and October 2012

The CPI rose by 0.5 per cent between September and October this year. By far the largest upward contribution to the 1-month change came from:

Education: prices, overall, rose by 19.1 per cent between September and October. This is more than twice the size of the next biggest monthly increase for education prices since CPI records began in 1996. The increase was due predominantly to a significant rise in undergraduate tuition fees, where the maximum annual tuition fees for new UK and EU students in England rose to £9,000.

There were smaller though significant, upward contributions from:

Clothing & footwear: prices, overall, rose by 1.2 per cent between September and October. This was the largest increase for clothing prices between these two months since records began.

Food & non-alcoholic beverages: prices, overall, rose by 0.5 per cent between September and October this year. Sugar, jam, syrups, chocolate & confectionery were the main contributors, followed by meat, fish and fruit.

Recreation & culture: where there were upward pressures to the monthly change from other recreational items, and cultural services and package holidays.

There were minor downward contributions from furniture, household equipment & maintenance, and transport.

Generali

thor wrote: »

Is that why he is so highly remunerated? I mean exactly what does his working day consist of? As far as I know his only remit is to keep inflation below 2% and he has screwed up in that respect for donkeys years now. If he is unable to manage that due to his incompetence or the limitations of his role then what the hell are we the taxpayers giving all that money for? He is just another scrounger living off the the rest of us in my opinion. I could fail just as well as he has for a fraction of his salary if anyone in the government is listening.

ILW wrote: »

Different world, there are millions of people who could get things as wrong as he has, but would not get paid £3 or £400,000 for doing it.
BBC is similar.

Graham_Devon wrote: »

I'd like to know whom this shocks.

What should Mervyn King have done about rising tuition fees do you all think?

lemonjelly

Will the inflation figures bear an influence on whether or not to raise the fuel duty currently being debated?

a 3p rise in the cost of fuel, plus the knock on effect on transportaion costs, & the fact that fuel is an ingredient into so many things, means this could be another inflationary pressure.

Is this something the government might be bothered about?

ILW

Generali wrote: »

What should Mervyn King have done about rising tuition fees?

A bit of a daft argument. If there are part that cannot be controlled, then you aim to tackle the parts you can influence to compensate. This brings the overall figure to where it should be. Businesses have to do it all the time.

The_White_Horse

it's £4 for a cheesecake in Tesco these days. FOUR QUID!! Some desserts in M&S are touching £6-£7. It is insanity.

Seriously, we are doomed. The only thing without inflation is salaries - unless you're public sector whose freeze includes a pay rise each year.

Generali

ILW wrote: »

A bit of a daft argument. If there are part that cannot be controlled, then you aim to tackle the parts you can influence to compensate. This brings the overall figure to where it should be. Businesses have to do it all the time.

If people (and I thought you were one but I'm happy to be corrected) want to criticise Mr King for this month's inflation numbers before the detail is out on the assumption that he is useless then when the detail comes out perhaps they'd like to share what he could have done.

IMHO, it's neither desirable nor possible for the BoE to keep every month's CPI at 2.00%.

Businesses don't have to use monetary policy, let alone use it in several ways at the same time.

StevieJ

Generali wrote: »

What should Mervyn King have done about rising tuition fees do you all think?

Predicted it I think in the famous words of Rumsfeld, that was a 'Known Known'