Was inflation negative in recent months?

Pat38493

I tend to use this site monthly to keep an eye on inflation for my planning:

https://erikasgrig.com/calculators/inflation-calculator-cpi/

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?  I guess it could be the case if it's driven by the pattern of figures falling off the figures each month?

Edit:  Just to clarify I am talking about monthly inflation since September not the rolling annual figure.

hugheskevi

Monthly CPI index numbers from ONS are below

2023 APR	130.4
2023 MAY	131.3
2023 JUN	131.5
2023 JUL	130.9
2023 AUG	131.3
2023 SEP	132.0
2023 OCT	132.0
2023 NOV	131.7
2023 DEC	132.2
2024 JAN	131.5

Pat38493

hugheskevi said:

Monthly CPI index numbers from ONS are below

2023 APR	130.4
2023 MAY	131.3
2023 JUN	131.5
2023 JUL	130.9
2023 AUG	131.3
2023 SEP	132.0
2023 OCT	132.0
2023 NOV	131.7
2023 DEC	132.2
2024 JAN	131.5

OK so in the linked site, if I put

December 2023 to January 2024 I should see negative inflation
November to December 2023 I should see +ve inflation...
and so on.

So it's correct that inflation from September to now was negative.

DullGreyGuy

Pat38493 said:

hugheskevi said:

Monthly CPI index numbers from ONS are below

2023 APR	130.4
2023 MAY	131.3
2023 JUN	131.5
2023 JUL	130.9
2023 AUG	131.3
2023 SEP	132.0
2023 OCT	132.0
2023 NOV	131.7
2023 DEC	132.2
2024 JAN	131.5

OK so in the linked site, if I put

December 2023 to January 2024 I should see negative inflation
November to December 2023 I should see +ve inflation...
and so on.

So it's correct that inflation from September to now was negative.

The Consumer Price Index was negative... there are multiple ways inflation can be measured and you won't always get the same result. CPIH was almost neutral over that period -v-s the 0.5 drop in CPI

eskbanker

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

Pat38493

eskbanker said:

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

It was reported that way by the BBC when the January figures came out.

DullGreyGuy

Pat38493 said:

eskbanker said:

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

It was reported that way by the BBC when the January figures came out.

CPIH is the same in Jan as it was 2 months ago, it went up and down by equal amounts to 1 decimal place. CPI is down and RPI is up -v- November but does depend on how many decimal places you are using. If you use 0 dp then CPI was the same in the three months. 

Depending on exactly what they said it is either accurate, simplified or potentially your misunderstanding. 

eskbanker

Pat38493 said:

eskbanker said:

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

It was reported that way by the BBC when the January figures came out.

It's rare for any reporting of inflation to refer to month-on-month calculations, in that the norm is to use rolling annual figures, so you're comparing apples and oranges if mixing two different methods!

zagfles

eskbanker said:

Pat38493 said:

eskbanker said:

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

It was reported that way by the BBC when the January figures came out.

It's rare for any reporting of inflation to refer to month-on-month calculations, in that the norm is to use rolling annual figures, so you're comparing apples and oranges if mixing two different methods!

Which is quite misleading reporting really - prices can be falling but the headline inflation figure could rise if prices fell by more in the same month a year ago, as it did between Dec 2022 and Jan 2023!

The rolling annual figure is useful for stuff like annual rises in pay, benefits, working out real gains or losses on investments etc, but for a measure of how prices are changing at the moment it's pretty useless. It's like measuring the speed of a car by how many miles it covered since an hour ago.

Pat38493

zagfles said:

eskbanker said:

Pat38493 said:

eskbanker said:

Pat38493 said:

According to this site, inflation between September and January was actually negative (actually negative in all months in between).

Does this make sense given that inflation was said to stay the same the last 2 months?

Who said that, and what measure were they using?

It was reported that way by the BBC when the January figures came out.

It's rare for any reporting of inflation to refer to month-on-month calculations, in that the norm is to use rolling annual figures, so you're comparing apples and oranges if mixing two different methods!

Which is quite misleading reporting really - prices can be falling but the headline inflation figure could rise if prices fell by more in the same month a year ago, as it did between Dec 2022 and Jan 2023!

The rolling annual figure is useful for stuff like annual rises in pay, benefits, working out real gains or losses on investments etc, but for a measure of how prices are changing at the moment it's pretty useless. It's like measuring the speed of a car by how many miles it covered since an hour ago.

Yes and this is I guess what was initially confusing me - if inflation was negative over the last 5 months, we do we keep hearing that it's higher or not changing.  

I guess the counter argument would be that like investment returns, quoting monthly inflation would introduce a lot of relatively unimportant volatility.

Albermarle

hugheskevi said:

Monthly CPI index numbers from ONS are below

2023 APR	130.4
2023 MAY	131.3
2023 JUN	131.5
2023 JUL	130.9
2023 AUG	131.3
2023 SEP	132.0
2023 OCT	132.0
2023 NOV	131.7
2023 DEC	132.2
2024 JAN	131.5

So I guess that would indicate that by April 2024 ( or even earlier), that the headline rolling CPI figure should drop down to close to zero ? Assuming prices stay approx stable for the next couple of months.

Not sure how much that will affect the BofE thinking though, as they seem to be concentrating on the level of wage rises, which will take longer to reduce.