Surprise fall in UK inflation

CPI, the government’s target measure of inflation, fell to 4.2% in June, down from 4.5% in May. This took economists by surprise, as there was a general expectation that inflation would rise this month. The biggest reason for the fall was the drop in prices in the recreation and culture category, which largely reflected lower prices for computer games and … Continue reading

Posted by Nigel Tree | Leave a comment

What are the implications of the high rate of UK inflation?

The latest figures show that CPI inflation in May remained at 4.5% as can be seen in the graphic below. At the same time RPI annual inflation was 5.2% and RPIX annual inflation, which excludes mortgage interest payments, was 5.3%. The UK CPI figure of 4.5% is well above the current EU average of 3.2%. Because high inflation has reduced … Continue reading

Posted by Nigel Tree | Leave a comment

Inflation continues to climb

CPI annual inflation was 4.0% in January, rising from 3.7% in December, according to figures released by the ONS today. The ONS said that: “Two of the main factors that had an impact on the January data are the increase in the standard rate of Value Added Tax (VAT) to 20 per cent and the continued increase in the price … Continue reading

Posted by Nigel Tree | Leave a comment

Inflation above target for 10 consecutive months

I remember hearing a story in the US of a barn which was covered in targets and each target had a bullet hole straight through the middle. A passing tourist was really impressed until the farmer told him that he just shot into the barn at random and then placed the target around the bullet hole. Perhaps it is time … Continue reading

Posted by Nigel Tree | Leave a comment

CPI was 3.7% in April – alcohol, women’s clothing and volcanic ash to blame.

CPI annual inflation which is targeted by the government at 2.0%, rose to 3.7% in April from 3.4% in March according to figures released this morning by the Office for National Statistics. The largest pressures on prices came from clothing and footwear which rose by 2.2% and was particularly fuelled by increases in the price of women’s clothing; widespread increases … Continue reading

Posted by Nigel Tree | Leave a comment

What are the implications of the rise in prices last month?

So, inflation is still on the rise. The government’s target measure of CPI rose from 3.0% in February to 3.4% in March. This was mainly due to the cost of gas and petrol prices and a spike in food prices. A weak level of sterling is coupling with very high prices for oil and other commodities, and on top of … Continue reading

Posted by Nigel Tree | Leave a comment

Rapid rise in UK inflation

The Consumer Prices Index (CPI) rose to 3.5% in January from 2.9% in December. According to the Office of National Statistics (ONS) this is the second largest ever increase in the annual inflation rate between two months. It follows on from the record increase of 1.0% in the annual inflation rate between November and December. The reason for the increase … Continue reading

Posted by Nigel Tree | Leave a comment

Largest ever increase in UK inflation

CPI annual inflation which is targeted by the government, rose to 2.9% in December 2009 from 1.9% in November. This increase of 1.0% was the largest ever increase in the annual rate between two months.   Why was the increase so large, especially considering that the consensus amongst City economists was for a rise to 2.6%? The basic reason is … Continue reading

Posted by Nigel Tree | Leave a comment

Big rise in UK inflation

The CPI annual inflation rate rose to 1.9% in November following a rise of 1.5% in October. This increase was faster than expected and was mainly due to changes in transport prices, with the largest effect coming from fuels and lubricants. In this category, prices rose by 2.8% between October and November this year but fell by a huge 8.3% … Continue reading

Posted by Nigel Tree | Leave a comment

Increase in CPI inflation

The government’s target measure for inflation, CPI, was 1.5% in October, which was a rise of 0.4 percentage points, from the 1.1% recorded in September.   The main reason for the increase was within the transport sector and came from fuels and lubricants. Somewhat perversely, prices of fuels fell by 0.7% between September and October this year. But because they … Continue reading

Posted by Nigel Tree | Leave a comment