Gideon George Osbourne and inflation at 0.5% is...

Why do people still call him Gideon?  What are they trying to prove?

Petrol has come down a lot and last years energy price rises are no longer relevant.So long as they dont keep increasing theres no inflation from them.

Nowt wrong with the name rob but it seem Osbourne is embarrassed about it for some reason.

Maybe he dropped it so as not to offend muslims?

http://en.wikipedia.org/wiki/Gideon

course it is.

The true inflation figure, which should only be based on the things that cannot be avoided and is really only a few things is distorted by the hundred other things that are not essential. The things we need to pay for daily this is the inflation that matters..food, utility bills,transport etc..this is closer to 12%

There is a defined CPI and RPI and I agree, there should be another; maybe a Cost Of Living Index.

Is it 12%? I don't know but bear in mind the figure of 0.5% is just the change over the previous 12 months. The price of petrol has fallen and it seems food prices have too.

If prices rise these products may be substituted for a different one. This is how it works. Also it doesn't take into account the falling value of money.

How do you get to 12% when the items you are listing are in lots of cases actually falling?

they're not falling tho.

ok, petrol prices are finally falling, I'll give you that.
But I don't drive, so it doesn't benefit me, personally.

There is a certain class of doom and gloom merchant who will just whinge regardless.

Dotchinite - the numbers aren't 12 months old, they are a rolling 12 months which is something quite different.  6 out of every four people don't understand government statistics.  A survey about size months ago show that over 60% of the electorate thought that falling inflation was the same as falling prices

Look let me make it simple, this is how inflation should be looked at(quite apart from skewing the figures with the price of a snickers bar)

If we say inflation for one year is 12% and peoples wages for that year have increased by 0%..ok inflation is 12%

Then year 2 inflation does not increase and neither do wages..then inflation is not 0%....it is still 12% for that year, that is what you will have to pay

Then year 3 say wages increase by 12% and prices stay the same then you can say inflation is 0% (or if wages stay the same and prices fall by 12% then inflation can be said to be 0%)

Hope this clarifies the matter.

lfc - you can calculate this for yourself.  All the inflation measures (and there are at least 4) are available on a rolling 12 month basis. Wage growth is also available as a measure on a rolling 12 month basis.  What you appear to be saying is that price inflation is only relevant over and above wage inflation - ie it does not matter if prices rise as long as wages keep pace.  Bring back the 1970's

Thankyou blackbarn...exactly so.

lfc - If inflation is being measured accurately and it is YOUR rate of inflation, this is the pure measure of the falling value of YOUR money

dylan has it covered so as a negative number may not be great you can bet your bottom dollar gideon will be giving the train companys the heads up for another inflation busting rise next jan,because they wont want a large figure dropping off been replaced by a zero or even price cut in fares,god forbid

here is the point, it is still 12% for that year, that is what you will have to pay.

lfc1971

If we say inflation for one year is 12% and peoples wages for that year have increased by 0%..ok inflation is 12%

Then year 2 inflation does not increase and neither do wages..then inflation is not 0%....it is still 12% for that year, that is what you will have to pay

I've never heard so much bollox in all my life - are you for real ?

certain products are included, or excluded to give the figure government wants.

the govt wants inflation at 2% so how is it now at 0.5% whereby the b of E have to explain why it is so far away from 2%


So many things are linked to the price of oil - so it stands to reason that if the price is dropping there will be a knock on effect. Even without the food price wars prices should be a lot cheaper not just because of transport cost savings but because more land will be available to grow foods rather than being used for oil substitutes. More supply = cheaper prices. Even the price of gas/elec have dropped a lot in the last few months - I changed deals with the same supplier last week and it saved me over 10%

It seems only train fares (which I don't use) and council tax bills are going up - anything else ? Maybe Sky, but anyone who takes a price increase fro sky is a fool !

LFC, you are talking about indexed inflation (whichever measure), in which you specify a given point as 100 and measure everything from that point.

Standard practice for almost all economists is to define a base date, and one year later as the measurement date. If not then governments of many hues have been guilty of huge increases in inflation. I don't think you actually understand what inflation means, or you view it in a completely different way to anyone who seriously discusses it.

It's almost as bad as people who don't understand the difference between national debt and budget deficit.

Its (inflation's) measurement vis-à-vis wage inflation is important. Deflation can also be a complete f*cking disaster, but given that this appears to be driven by oil prices, and we are net importers, that's no disaster, perhaps even a boon.

I agree inflation should be based on EII.