Government borrowing continues to fall

Government borrowing in December fell by £2.2bn from £15.9bn in December 2010 to £13.7bn. This means that borrowing has now fallen for four consecutive months. The figures for the last financial year together with the current financial year are shown below. These are shown using the so-called “ex-measures” which exclude the temporary effects of financial interventions. Cumulative public sector net … Continue reading

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Inflation continues to fall

Consumer Price Index (CPI) inflation has fallen for the second month running to reach 4.8% in November, from 5.0% in October. There was also a fall in the Retail Prices Index (RPI), which includes mortgage interest payments, to 5.2% from 5.4%. Factors accounting for the fall in the rate of inflation include a slowdown in food and non-alcoholic drink prices, … Continue reading

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VAT: Progressive or Regressive?

In his emergency Budget in June 2010, George Osborne, the Chancellor, announced an increase in VAT from 17.5% to 20.0% to take place from the beginning of 2011. When this came into place this year, Osborne, in an interview with the Today programme on radio on 4th January 2011, said: “If you look at the population and how much they … Continue reading

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Inflation starts to slow

The Consumer Prices Index (CPI) fell to 5.0% in October from 5.2% in September. The largest downward pressures to the change in CPI annual inflation between September and October came from falls in the cost of food (due to significant and widespread discounting by supermarkets and good harvests for certain produce), air fares and petrol. But working in the other … Continue reading

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Is the jump in retail sales merely an illusion?

The volume of retail sales rose by 1.9% in January compared to the previous month, according to the Office for National Statistics (ONS). This was after the December figure was revised downwards from an earlier estimate of a fall of 0.8% to a corrected figure of minus 1.4%. This was the biggest December fall since records began. When we examine … Continue reading

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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

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Retail sales fall in December

Retail sales volumes fell by 0.8% in December. This meant there was no change in retail sales compared to December 2009 and this was the worst December figure on record. Food stores saw a fall of 3.4% on an annual basis, which is the lowest figure since records began in 1988. Non-food stores performed better, with an annual rise of … Continue reading

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VAT has now risen to 20% in the UK

The rate of Value Added Tax went up at midnight from 17.5% to 20.0%. This move was flagged in advance by the coalition government as being a necessary part of their austerity measures. On the one hand they are slashing spending across most government departments and on the other hand they are trying to raise taxes as well in an … Continue reading

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Commodities to blame for higher shop prices

Food inflation increased to 4.0% in September, from 3.8% in August, according to the British Retail Consortium (BRC) – Nielsen Shop Price Index, published today. Non-food inflation also rose to 0.7% from 0.5% in August. Overall shop price inflation increased to 1.9% in September from 1.7% in the previous month, which took it to its highest rate for five months. … Continue reading

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Surprise inflation figures

The latest figures were a surprise, only not in a good way. CPI annual inflation, which is the Government’s target measure, was 3.1% in August and unchanged compared to the previous month. General expectation in the City had been that the rate would continue to fall to around 2.9%. There were several categories which produced strong upward pressure on prices. … Continue reading

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