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

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

how can it be 0.5% when train fares have gone up again, and energy prices still haven't come down ? 

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.

Average of 0 and 0 and 0 and 0 and 0 and 0 and 0 and 4 is 0.5.

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

inflation is closer to 12%.

course it is.

Ultra-low inflation is no good thing.

The target is 2% and the stated aim is to keep the rate within one percentage point of that target.

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%

spin spin spin


wages are miles behind prices. food banks are on the increase.

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.

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

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.

In the last month alone

my rent has gone up
phone/tv/internet has gone up
train fares have gone up

some things are the same (food, energy, council tax) but they have all shot up over the last 4 or 5 years.

but nothing has come down

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

What happened 12 months ago is totally irrelevant.

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.

Well food prices are falling in lots of cases.

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

haven't noticed that in my shopping bills.

the price of basic staples is outrageous - eggs, fish, fruit, veg, etc - have rocketed in price in the last few years.

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

size = six  oops

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.

You are right blackbarn. I was being lazy and simplistic in my postings.

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

Some people work out a very basic principle of economics and it really goes to their head.

the numbers aren't 12 months old, they are a rolling 12 months which is something quite different.

ffs, I'm not exactly mr phd in economics but wtf?

Thankyou blackbarn...exactly so.

Also most insidious the falling value of money.

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

Then year 2 inflation does not increase and neither do wages..then inflation is not 0%....it is still 12% for that year

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

^^^^tut tut, dishonest quote!

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

That is misleading.  You are getting your terms mixed up.

Your point is that for the last few years there has been a decline in many people's standard of living defined by CPI/RPS (or any measure you care to use) vs wage increases.

And for decades before it generally increased.

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 !

not really, my point was really that inflation is the increase in the price of goods and services at any given time. If after 12 months inflation is 12% it will still be 12% after 13 months if nothing else changes.

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.

In fact, there should be an EII (essentials inflation index). The CPI takes in too many 'big ticket' items. EII would just be the sundries of day to day life. Don't hold your breath for any political party to introduce that though.

I agree inflation should be based on EII.