Inflation higher than expected, but is it good news?

The consumer price index (CPI) for July was 1.8%, which was exactly the same as it was in June, and remained within the government’s 2% target. The CPI saw some downward pressure on prices from food, soft drinks, restaurants and hotels but these offset by rises in the prices of games, toys, hobbies and recorded media such as DVDs and … Continue reading

Posted by Nigel Tree | Leave a comment

The economy is either getting better or getting worse

In my blog yesterday I listed some of the positive signs that the economy was showing in terms of house prices, house building and the service sector. Then later in the day the Monetary Policy Committee (MPC) announced that the UK recession “appears to have been deeper than previously thought.”   Not only that, but the MPC thought it necessary … Continue reading

Posted by Nigel Tree | Leave a comment

Is price deflation being overstated?

Professor Greg Mankiw of Harvard University has just pointed out that the CPI figure in the US which has moved into negative territory, may be exaggerated because it is based on a “trimmed mean estimate”, which removes the large relative price changes in each month.   He says: “As every grade school student learns when the teacher reports results of … Continue reading

Posted by Nigel Tree | Leave a comment

RPI inflation falls to minus 1.2% to record biggest drop since records began

In April 2009 the Retail Prices Index (RPI) fell from -0.4% in March to -1.2% in April. This was the biggest fall in prices since records began in 1948. The recent fall into negative territory for the RPI has been due to the huge cut in interest rates over recent months, as the Bank of England has reduced rates from … Continue reading

Posted by Nigel Tree | Leave a comment

UK out of step on inflation

Consumer prices in the OECD area rose by 0.9% in the year to March 2009, according to figures released yesterday. This represents a continued fall when compared with the 1.3% price level recorded in the year to February. When taken on a month-by-month basis prices rose by 0.3% in March following a rise of 0.4% in February. The recent trend … Continue reading

Posted by Nigel Tree | Leave a comment

RPI moves into negative territory

The Retail Prices Index (RPI) actually fell to -0.4% in March, compared with a figure of zero growth in February. This is the first time that this figure has been negative since 1960. There was a large downward pressure on the index from housing with the main contributions being house depreciation and mortgage interest payments, both of which are excluded … Continue reading

Posted by Nigel Tree | Leave a comment

Deflation – coming to a country near you!

  US consumer prices fell in March by 0.1% on the previous month, and 0.4% on the same month a year ago. This is the first time that deflation has been seen in the US since 1955.   Deflation is of particular concern because it can persuade consumers not to buy now, but to wait for a bargain as prices … Continue reading

Posted by Nigel Tree | Leave a comment

Inflation: CPI up, RPI down to zero

Just published by the ONS at 9.30am today, the latest inflation figures show that the Consumer Prices Index (CPI) annual inflation  – which is the government’s target measure – rose by 3.2% in February. This was up from 3.0% in January.   This means that the CPI is moving away from the Bank of England’s 2.0% target, after the Bank … Continue reading

Posted by Nigel Tree | Leave a comment

The crash of falling China

China, which is now the world’s third largest economy, saw its exports drop by 25.7% in February compared to a year earlier. Imports also fell by 24.1%. This meant that the country’s trade surplus fell from $39.1 billion in January to $4.8bn last month.   China is very dependent on its manufactured exports, and the sudden global recession has seen … Continue reading

Posted by Nigel Tree | Leave a comment

Price rises are slowing – but is that good or bad news?

CPI and RPI have fallen less than expected in January but is deflation on the horizon? Continue reading

Posted by Nigel Tree | Leave a comment