Wednesday, July 19, 2006

British Inflation Up



"CPI annual inflation – the Government's target measure – rose to 2.5 per cent in June up from 2.2 per cent in May. It has not been higher since the start of the official series in 1997, and has only been equalled once before, in September 2005.

The largest upward effect came from gas and electricity bills which continued to increase by more than a year ago, reflecting the phasing in of recent tariff increases from major suppliers.

There were also large upward effects from:

• food and non-alcoholic beverages, mainly due to vegetable prices, and to a lesser extent fish prices, both of which increased this year but fell a year ago. A partially offsetting downward contribution came from fruit where prices rose by less than last year;

• tobacco, due to the price of cigarettes increasing this year on all brands, on average by 6p for a packet of 20. Last year, prices were little changed; and

• furniture and furnishings with prices rising by more than a year ago. The main upward effects came from lounge furniture and kitchen cabinets.

RPI inflation rose in June to 3.3 per cent up from 3.0 per cent in May. The main factors influencing it were similar to those affecting the CPI.

RPIX inflation – the all items RPI excluding mortgage interest payments – is 3.1 per cent in June, up from 2.9 per cent in May.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is slightly above the average for the European Union as a whole. The provisional inflation rate for the EU 25 in June was 2.4 per cent, compared with the UK figure for the same month of 2.5 per cent."

Some thoughts:

Mervyn King's endorsement of mass immigration as a means of controlling inflation was wrong-headed. Inflation has increased notwithstanding deliberate wage suppression. He should be fired.

Given that the prices of non-alcoholic beverages and tobacco have been major drivers of this spurt, the patriotic solution to this crisis would be for everyone to start smoking - preferably with a glass of mineral water.

And when British inflation is higher than the EU average, the superiority of the Anglo-Saxon model of liberal capitalism over continental protectionism is made into a myth - a dream that was peddled to help the pedlars get rich.

Well done, Gordon Brown...

4 Comments:

Blogger Canadi-anna said...

Are you still smoking?

I'd make a more interesting comment, but my understanding of economics is pretty much:

I'm broke.
Everything costs too much.
Credit cards are the bane of my existence.
Everything would be better if we won the lottery.
I can't be bothered forking out two dollars for the lottery.

Sigh.

20 July, 2006 01:29  
Blogger Canadi-anna said...

Are you still smoking?

I'd make a more interesting comment, but my understanding of economics is pretty much:

I'm broke.
Everything costs too much.
Credit cards are the bane of my existence.
Everything would be better if we won the lottery.
I can't be bothered forking out two dollars for the lottery.

Sigh.

20 July, 2006 01:29  
Blogger Canadi-anna said...

Are you still smoking?

I'd make a more interesting comment, but my understanding of economics is pretty much:

I'm broke.
Everything costs too much.
Credit cards are the bane of my existence.
Everything would be better if we won the lottery.
I can't be bothered forking out two dollars for the lottery.

Sigh.

20 July, 2006 01:29  
Blogger Martin said...

Ca,

Yes.

And yes.

Economics is NOT DIFFICULT - the economists only want you to THINK that it's difficult.

And although I smoke like a chimney and drink like a fish when in funds (which is usually for about six hours every four weeks), I have no credit cards...

20 July, 2006 07:52  

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