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UK inflation to plummet to fresh low

worldtraveller
worldtraveller Posts: 14,012 Forumite
Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
in Debate House Prices & the Economy
Inflation fell to its lowest rate on record last month, official data will show this week, as supermarkets stepped-up a price war and consumers reaped the benefits of cheaper oil prices.

Prices are expected to have edged up by just 0.1pc in February compared with a year earlier. This compares with an increase in CPI of just 0.3% in January and would represent the lowest rate since comparable records began in 1989.

The Telegraph
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Comments

  • purch
    purch Posts: 9,865 Forumite
    Unfortunately people seem more inclined to talk about other people who post on hpc.co.uk than actually discuss the real economic news.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    purch wrote: »
    Unfortunately people seem more inclined to talk about other people who post on hpc.co.uk than actually discuss the real economic news.

    To be fair this is speculation rather than news. I'd rather see the numbers come in.
  • Loughton_Monkey
    Loughton_Monkey Posts: 8,913 Forumite
    Part of the Furniture Combo Breaker Hung up my suit!
    As someone who suffered inflation of 17%, 26%, 13%, 18% for the first 4 years of my working life, I rather welcome low prices.

    I hope it lasts, so that my 4% 'granny bond' will buy a lot more goodies.
  • Intoodeep
    Intoodeep Posts: 1,670 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker Mortgage-free Glee!
    0%...Zero !!
  • Nick_C
    Nick_C Posts: 7,562 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Home Insurance Hacker!
    Well, yes, Zero. But it depends how you measure it. CPI is zero, but CPI has been widely derided in the past as unrepresentative, and the Government invented CPI to give them a lower measure than RPI for uprating pensions and benefits.

    RPIx is actually at 1.03%
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Nick_C wrote: »
    Well, yes, Zero. But it depends how you measure it. CPI is zero, but CPI has been widely derided in the past as unrepresentative, and the Government invented CPI to give them a lower measure than RPI for uprating pensions and benefits.

    RPIx is actually at 1.03%

    CPI is an agreed unified measure of inflation to allow the comparison of inflation rates across the EU. It was introduced as part of the UK's commitment to introduce the single currency at some point in the future.

    RPI isn't a measure of inflation, it's a measure of change in the cost of living. The GDP deflator measures inflation.

    RPI and CPI are very low. Why? Commodity prices are falling, probably in anticipation of the Fed raising interest rares later this year. That is pushing prices down but is just the mirror image of 5% inflation that Graham was shipping himself about a couple of years ago.

    The most likely thing is that inflation will normalise again at 2-3% in a year or two. The risk is that Central Banks will poo themselves and 'combat deflation' leading to inflation in 2-3 years.
  • Nick_C
    Nick_C Posts: 7,562 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Home Insurance Hacker!
    Generali wrote: »
    RPI isn't a measure of inflation

    I think most people, including HMG, would disagree with you.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Nick_C wrote: »
    I think most people, including HMG, would disagree with you.

    Good for them.

    RPI is a cost of living index.
  • Nick_C
    Nick_C Posts: 7,562 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Home Insurance Hacker!
    Generali wrote: »
    Good for them.

    RPI is a cost of living index.

    As is CPI, which you described as a measure of inflation!

    What's the rate of inflation using the GDP deflator then?
  • purch
    purch Posts: 9,865 Forumite
    Nick_C wrote: »
    I think most people, including HMG, would disagree with you.

    HMG wouldn't.

    People who don't know what they are talking about might.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
This discussion has been closed.
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