Personal Inflation rate

callum9999

sevenhills said:

callum9999 said:

I think you're missing the entire point of the national inflation figures. They represent what the average person is paying.

But there is more than one type of average, there is the median and the mode.
Average pay used to be £25k, I am guessing it more like £35k now, that is not what how CPI inflation is worked out.
RPI inflation ignores the top 4% of earners, so RPI inflation is more likely to apply to those on average pay.

There are far more averages than just means and modes - I'm not referring to any of them specifically so it's not really relevant to anything!

Average pay has nothing to do with how CPI or RPI is calculated. Low income houses are also excluded from RPI calculations and the ONS specifically state that they don't view it as being any more representative for the average person than CPI (in fact they say the exact opposite - that RPI is less useful and people should stop using it altogether).

Where are you getting this from?

sevenhills

callum9999 said:

Average pay has nothing to do with how CPI or RPI is calculated.

Where are you getting this from?

Back in the 80s/90s RPI was the recognised measure of inflation. They then ditched RPI in favour of CPI which averages 1% lower. Which is what the government want, lower inflation.
They now no longer recognise CPI, but they use the lower CPIH.

But the government do still increase some things by RPI, if they want more revenue, such as train fares and student loans.

sevenhills

RG2015 said:

If you look back a couple of pages to my calculations, you will see my calculated rate is 4.9%

Although I don't trust the government, I believe their estimates of inflation are more accurate than yours.

RG2015

callum9999 said:

O RG2015 said:

For completeness, I have done the detailed ONS personal calculator and mine comes out at 11.7% compared with CPIH (their choice of comparator) of 8.8%.

This is comparing the years ending July 21 and July 22. But it is based upon a generalised basket of goods in each category where I spend, weighted by my average spend in each category. There are just too many averages for me.

  https://www.ons.gov.uk/economy/inflationandpriceindices/articles/howisinflationaffectingyourhouseholdcosts/2022-03-23

Regarding the perception of the ONS inflation figure applying to everyone, I will acknowledge that it is just my perception.

However, I can only report what I think and until I examined the issue more closely, I believed that my personal finances would be subject to the reported inflation figure.

I know now that my personal inflation is quite different anything the ONS is reporting.

You're correct that you can only "report what you think", but I'm afraid you thought that because of ignorance and not because the ONS or "the media" were misleading you. (Please don't take that as an insult, everyone - me definitely included - is ignorant about something - just try to be more aware of any shortfall in your knowledge before sharing it).

I do not take it as an insult, although I do find you comment condescending. Are you suggesting that I should not post unless I make myself fully aware of my chosen topic? I do not post as an expert, merely a member of the public.

Forums are for open discussions. Then again , I was criticised a few years ago for slapdash posting.

But more than this, your view that the average person fully understands the nature of inflation does surprise me.

RG2015

sevenhills said:

RG2015 said:

If you look back a couple of pages to my calculations, you will see my calculated rate is 4.9%

Although I don't trust the government, I believe their estimates of inflation are more accurate than yours.

Are you talking about government/BoE estimates for future inflation? An estimate can never be accurate so I don’t see this as an issue.

The reported ONS inflation figures are actual figures based upon their calculation rules. There is no reason to doubt them.

I have shared my actual figures so why would you suggest that they are any less accurate than government figures. 

callum9999

sevenhills said:

callum9999 said:

Average pay has nothing to do with how CPI or RPI is calculated.

Where are you getting this from?

Back in the 80s/90s RPI was the recognised measure of inflation. They then ditched RPI in favour of CPI which averages 1% lower. Which is what the government want, lower inflation.
They now no longer recognise CPI, but they use the lower CPIH.

But the government do still increase some things by RPI, if they want more revenue, such as train fares and student loans.

The ONS absolutely does "recognise" CPI.

I'm still struggling to see what any of this has to do with anything!

callum9999

RG2015 said:

callum9999 said:

O RG2015 said:

For completeness, I have done the detailed ONS personal calculator and mine comes out at 11.7% compared with CPIH (their choice of comparator) of 8.8%.

This is comparing the years ending July 21 and July 22. But it is based upon a generalised basket of goods in each category where I spend, weighted by my average spend in each category. There are just too many averages for me.

  https://www.ons.gov.uk/economy/inflationandpriceindices/articles/howisinflationaffectingyourhouseholdcosts/2022-03-23

Regarding the perception of the ONS inflation figure applying to everyone, I will acknowledge that it is just my perception.

However, I can only report what I think and until I examined the issue more closely, I believed that my personal finances would be subject to the reported inflation figure.

I know now that my personal inflation is quite different anything the ONS is reporting.

You're correct that you can only "report what you think", but I'm afraid you thought that because of ignorance and not because the ONS or "the media" were misleading you. (Please don't take that as an insult, everyone - me definitely included - is ignorant about something - just try to be more aware of any shortfall in your knowledge before sharing it).

I do not take it as an insult, although I do find you comment condescending. Are you suggesting that I should not post unless I make myself fully aware of my chosen topic? I do not post as an expert, merely a member of the public.

Forums are for open discussions. Then again , I was criticised a few years ago for slapdash posting.

But more than this, your view that the average person fully understands the nature of inflation does surprise me.

No, I'm suggesting that if you don't understand a topic you should discuss it without making claims about it. This is something I see in virtually every single discussion on any subject whatsoever nowadays and it frustrates me to no end. I do not expect you to be an expert, but I do expect you to be able to figure out the limitations of your own knowledge. Without meaning to veer away to the dramatic, this is the exact reason why we have lunatics like Trump and Boris running the world nowadays - people are far too happy to share their "feelings" about a topic as if they are facts before establishing whether they're true or not. You however do seem to redeem yourself by being willing to learn when challenged, which makes you better than most!

I'm going to one-up you in the surprise factor by expressing surprise that I apparently think that. I do not remotely think that, nor do I have any memory of ever expressing that view. In fact, I'm generally pretty scathing at the enormous level of ignorance found in the general public.

Are you confusing my suggestion that the average person knows inflation figures are a generalised average with the idea that they're all inflation experts? Knowing it's a generalised average is an incredibly basic piece of information that I'd even expect young children to understand (I even vaguely remember touching upon this in primary school maths).

callum9999

RG2015 said:

sevenhills said:

RG2015 said:

If you look back a couple of pages to my calculations, you will see my calculated rate is 4.9%

Although I don't trust the government, I believe their estimates of inflation are more accurate than yours.

Are you talking about government/BoE estimates for future inflation? An estimate can never be accurate so I don’t see this as an issue.

The reported ONS inflation figures are actual figures based upon their calculation rules. There is no reason to doubt them.

I have shared my actual figures so why would you suggest that they are any less accurate than government figures. 

No, they're talking about current inflation estimates. They are all estimates because the ONS are not tracking the sale of every single item in every single store across the entire country, it's sampled.
.
The ONS track the price changes of individual items, you're tracked how much you've spent on general categories. I see how calling that your "personal inflation" can be confusing in the context of their calculated national inflation, but, assuming you haven't purchased the exact same items this year as you did last year (i.e. you eat/drink/wear the exact same stuff every single day and are not influenced whatsoever by special offers etc.), you're measuring a different thing to them. 

sevenhills

callum9999 said

No, I'm suggesting that if you don't understand a topic you should discuss it without making claims about it. This is something I see in virtually every single discussion on any subject whatsoever nowadays and it frustrates me to no end. You however do seem to redeem yourself by being willing to learn when challenged, which makes you better than most!

If we just had experts starting discussions, very few would be started.

sevenhills

RG2015 said:

The reported ONS inflation figures are actual figures based upon their calculation rules. There is no reason to doubt them.

I have shared my actual figures so why would you suggest that they are any less accurate than government figures. 

So you believe your own inflation rate of 4.9% is correct and the ONS figure of CPI inflation is correct too.
But you disregard RPI inflation?