Inflation crisis: Due to various factors including war in Ukraine and Covid-19.

JamesT

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25 Feb 2015
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1,534
Indeed, and whilst I've been very fortunate (and anyone who tells you that it's all down to personal skill that they are where they are now doesn't understand that just by being born in, say, the UK means that they have already won life's lottery - although that's not to belittle those who have a truly horrid time here as there will still be far too many) not to have been in the situation where I've been worried about money to the extent where choices have to have been made between essential things (i.e. easy or heat) I have always questioned why I'm the "basket of goods" there's things like TV's and other tech which will almost always bring the cost of living down.

Now I know that I'm probably rare in that in the circa 15 years which I've been married we've only brought 3 TV's (and two of those are currently in use) with on of those only being brought because we had a lodger and it was the deal for them moving in. As such the cost of a TV isn't something which makes a big impact on our budget. Even understanding that we're towards one end of the spectrum, it's unlikely that those below the top 50% of household incomes are likely to buy a TV even every few years, yet it's there impacting the inflation value.

This discrepancy first came to my attention when an MP3 player was added to the basket of goods when it was still fairly new tech and not really something that many people I knew had and those who did where doing reasonably well (and at the time I wasn't exactly poor and was still living at home).
The baskets of goods and services are weighted, though it will still be skewed to whatever the ‘average’ person buys. https://www.ons.gov.uk/economy/infl...articles/consumerpriceindicesabriefguide/2017 has a good introduction. In 2017 when that article was written, food was 7.1%, utilities 29.4%. In comparison AV and related was only 1.5% and portable sound and vision (which the MP3 player was presumably chosen to represent) only 0.021%.
So the generally dropping price of technology is going to have less effect on the inflation number than rises in food prices. (Though have you seen the prices of graphic cards in the last few years?). Talking of TVs, apparently last year over 8 million were sold, a 20% increase on the previous year. There are around 28 million households, so a fair proportion do buy one so it’s worth going in the inflation figure. (Though it will still only be part of that 1.5% for AV)
One number is never going to cover all situations, but I believe the ONS are well respected for producing solid figures.
 
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Dai Corner

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The baskets of goods and services are weighted, though it will still be skewed to whatever the ‘average’ person buys. https://www.ons.gov.uk/economy/infl...articles/consumerpriceindicesabriefguide/2017 has a good introduction. In 2017 when that article was written, food was 7.1%, utilities 29.4%. In comparison AV and related was only 1.5% and portable sound and vision (which the MP3 player was presumably chosen to represent) only 0.021%.
So the generally dropping price of technology is going to have less effect on the inflation number than rises in food prices. (Though have you seen the prices of graphic cards in the last few years?). Talking of TVs, apparently last year over 8 million were sold, a 20% increase on the previous year. There are around 28 million households, so a fair proportion do buy one so it’s worth going in the inflation figure. (Though it will still only be part of that 1.5% for AV)
One number is never going to cover all situations, but I believe the ONS are well respected for producing solid figures.
Agreed.

I last bought a brand new TV 17 years ago. It's since been replaced by one bought for a nominal sum from a relative who was upgrading to the latest model.

I wonder if the Labour Party will ever introduce a 'Consumer Essentials Index' to use in relation to State Pension, benefits etc.?
 

Wynd

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13 Dec 2021
Messages
265
Location
Aberdeenshire
Indeed, and whilst I've been very fortunate (and anyone who tells you that it's all down to personal skill that they are where they are now doesn't understand that just by being born in, say, the UK means that they have already won life's lottery - although that's not to belittle those who have a truly horrid time here as there will still be far too many) not to have been in the situation where I've been worried about money to the extent where choices have to have been made between essential things (i.e. easy or heat) I have always questioned why I'm the "basket of goods" there's things like TV's and other tech which will almost always bring the cost of living down.

Now I know that I'm probably rare in that in the circa 15 years which I've been married we've only brought 3 TV's (and two of those are currently in use) with on of those only being brought because we had a lodger and it was the deal for them moving in. As such the cost of a TV isn't something which makes a big impact on our budget. Even understanding that we're towards one end of the spectrum, it's unlikely that those below the top 50% of household incomes are likely to buy a TV even every few years, yet it's there impacting the inflation value.

This discrepancy first came to my attention when an MP3 player was added to the basket of goods when it was still fairly new tech and not really something that many people I knew had and those who did where doing reasonably well (and at the time I wasn't exactly poor and was still living at home).


This of course is a little game the government like to play to avoid the consequences of endless new money creation.

TV's, Electronics should absolutely not be included in the inflation statistics for the very simple and highly obvious reason that they are NOT everyday items.

What inflation should assess is food, fuel, and housing costs. Things we all need to buy to survive.

Instead, the cost of goods that are dis-inflationary are included in "the basket" to balance manipulate and hoodwink the public in to thinking they are only getting slightly poorer when in reality we are careering backwards in purchasing power.

There's a thread on twitter going around showing the cost of some foods is up over 344% YOY. Oil/Fuel as we all know has more than doubled on wholesale markets leading to drastic increases in domestic bills and housing is up 20% over the last 24 months.

The whole farcical situation is so grotesque it only serves to highlight and underscore our favorite social sport in the uk, namely hating the poor and crushing them in to the ground with zeal.

Worse still if you didn't grow up in poverty, poverty defined as severe lack of food, heat, clothing on a consistent basis, you just don't have the sympathy or compassionate experience required to be that bothered by it. Empathy maybe, but thats a different thing.

Oh, and just to pre empt the inflation is imported argument, yes, it largely is as the price of commodities is globally set, but, the value of the £ is within the control of the BOE to some extent via interest rates.

Then there is the elephant in the room. The UK's hammered foreign account. The balance of payments has been deeply damaged this last few years due to our exports being harmed. Now, what political policy has the power to harm exports?
 
Last edited:

Dai Corner

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20 Jul 2015
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Oh, and just to pre empt the inflation is imported argument, yes, it largely is as the price of commodities is globally set, but, the value of the £ is within the control of the BOE to some extent via interest rates.
If the BoE raised interest rates to increase the value of the £, what effect do you think that would have on those paying mortgages, either directly or through their rent?
 

deltic

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Joined
8 Feb 2010
Messages
2,709
This of course is a little game the government like to play to avoid the consequences of endless new money creation.

TV's, Electronics should absolutely not be included in the inflation statistics for the very simple and highly obvious reason that they are NOT everyday items.

What inflation should assess is food, fuel, and housing costs. Things we all need to buy to survive.

Instead, the cost of goods that are dis-inflationary are included in "the basket" to balance manipulate and hoodwink the public in to thinking they are only getting slightly poorer when in reality we are careering backwards in purchasing power.

There's a thread on twitter going around showing the cost of some foods is up over 344% YOY. Oil/Fuel as we all know has more than doubled on wholesale markets leading to drastic increases in domestic bills and housing is up 20% over the last 24 months.

The whole farcical situation is so grotesque it only serves to highlight and underscore our favorite social sport in the uk, namely hating the poor and crushing them in to the ground with zeal.

Worse still if you didn't grow up in poverty, poverty defined as severe lack of food, heat, clothing on a consistent basis, you just don't have the sympathy or compassionate experience required to be that bothered by it. Empathy maybe, but thats a different thing.

Oh, and just to pre empt the inflation is imported argument, yes, it largely is as the price of commodities is globally set, but, the value of the £ is within the control of the BOE to some extent via interest rates.

Then there is the elephant in the room. The UK's hammered foreign account. The balance of payments has been deeply damaged this last few years due to our exports being harmed. Now, what political policy has the power to harm exports?

Inflation is a measure of all goods and services that we buy and should therefore include all such items weighted against our expenditure on them. However, ONS also provides detailed inflation figures across categories so across all food, inflation was 4.5% from Dec 2020 to Dec 2021. There are RPI tables for one and two pensioner households but I cannot see anything similar for CPI. It would certainly be helpful to have CPI tables by household income quintiles.
 

ainsworth74

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If the BoE raised interest rates to increase the value of the £, what effect do you think that would have on those paying mortgages, either directly or through their rent?
Well that's the problem isn't? The BoE, and I suppose the wider financial service sector, appear to have rather boxed themselves in to needing extremely low interest rates. Because if interest rates rise then suddenly a lot of mortgages and other loans might suddenly run into significant affordability issues for those making the repayments. Which would be somewhat disastrous. But if they don't raise interest rates and inflation rises unchecked then that also has the potential to do significant damage.

I wouldn't fancy being in charge of this particular house of cards!
 

JamesT

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25 Feb 2015
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Well that's the problem isn't? The BoE, and I suppose the wider financial service sector, appear to have rather boxed themselves in to needing extremely low interest rates. Because if interest rates rise then suddenly a lot of mortgages and other loans might suddenly run into significant affordability issues for those making the repayments. Which would be somewhat disastrous. But if they don't raise interest rates and inflation rises unchecked then that also has the potential to do significant damage.

I wouldn't fancy being in charge of this particular house of cards!
There's also the question of what's causing the inflation. Raising interest rates dampens demand as it becomes more expensive for companies to borrow to invest. Which is fine when the inflation is being driven by excessive demand. However much of the price rises at the moment appear to be coming from a lack of supply of energy globally. Which us raising interest rates is going to do nothing to affect. The other lever the BoE can pull is Quantative Easing. They pumped a lot of money in over the pandemic which absent other factors would be inflationary. Calling in those bonds or just letting them lapse should have the opposite effect without needing to touch the interest rates.
 

Wynd

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Location
Aberdeenshire
There's also the question of what's causing the inflation. Raising interest rates dampens demand as it becomes more expensive for companies to borrow to invest. Which is fine when the inflation is being driven by excessive demand. However much of the price rises at the moment appear to be coming from a lack of supply of energy globally. Which us raising interest rates is going to do nothing to affect. The other lever the BoE can pull is Quantative Easing. They pumped a lot of money in over the pandemic which absent other factors would be inflationary. Calling in those bonds or just letting them lapse should have the opposite effect without needing to touch the interest rates.
Contraction of the money supply, would result in serious harm to the economy.
Inflation is a measure of all goods and services that we buy and should therefore include all such items weighted against our expenditure on them. However, ONS also provides detailed inflation figures across categories so across all food, inflation was 4.5% from Dec 2020 to Dec 2021. There are RPI tables for one and two pensioner households but I cannot see anything similar for CPI. It would certainly be helpful to have CPI tables by household income quintiles.
You've made my argument for me, thank you. 4.5% food price inflation over the course of a year just isn't even remotely believable.

Well that's the problem isn't? The BoE, and I suppose the wider financial service sector, appear to have rather boxed themselves in to needing extremely low interest rates. Because if interest rates rise then suddenly a lot of mortgages and other loans might suddenly run into significant affordability issues for those making the repayments. Which would be somewhat disastrous. But if they don't raise interest rates and inflation rises unchecked then that also has the potential to do significant damage.

I wouldn't fancy being in charge of this particular house of cards!
Quite. It is a house of cards and the whole economy function is now predicated on extremely cheap money. The mortgage/property generally is still where the vast majority of global wealth is held.
 

deltic

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8 Feb 2010
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2,709
You've made my argument for me, thank you. 4.5% food price inflation over the course of a year just isn't even remotely believable.
Have you monitored the 100s of different food items that are brought regularly by consumers - if not how do you come to that conclusion?.

The table shows the annual increase in each element of the food basket - these are broken down still futher in the actual data collected by ONS. Interested to know which items you feel ONS have got wrong.

CPI ANNUAL RATE 01.1 : FOOD 2015=100
4.5​
CPI ANNUAL RATE 01.1.1 : BREAD & CEREALS 2015=100
3.4​
CPI ANNUAL RATE 01.1.1.1 Rice 2015=100
2.5​
CPI ANNUAL RATE 01.1.1.2 Flours and other cereals 2015=100
-10.7​
CPI ANNUAL RATE 01.1.1.3 Bread 2015=100
4.4​
CPI ANNUAL RATE 01.1.1.4 Other bakery products 2015=100
5.5​
CPI ANNUAL RATE 01.1.1.5 Pizza and quiche 2015=100
1.6​
CPI ANNUAL RATE 01.1.1.6 Pasta products and couscous 2015=100
3.5​
CPI ANNUAL RATE 01.1.1.7/8 Breakfast cereals and other cereal products 2015=100
0.6​
CPI ANNUAL RATE 01.1.2 : MEAT 2015=100
4.4​
CPI ANNUAL RATE 01.1.2.1 Beef and veal 2015=100
7.3​
CPI ANNUAL RATE 01.1.2.2 Pork 2015=100
3.4​
CPI ANNUAL RATE 01.1.2.3 Lamb and goat 2015=100
8.5​
CPI ANNUAL RATE 01.1.2.4 Poultry 2015=100
4.8​
CPI ANNUAL RATE 01.1.2.6 Edible offal 2015=100
5.6​
CPI ANNUAL RATE 01.1.2.7 Dried, salted or smoked meat 2015=100
2.8​
CPI ANNUAL RATE 01.1.2.8 Other meat preparations 2015=100
4.2​
CPI ANNUAL RATE 01.1.3 : FISH 2015=100
1.7​
CPI ANNUAL RATE 01.1.3.1 Fresh or chilled fish 2015=100
2.6​
CPI ANNUAL RATE 01.1.3.4 Frozen seafood 2015=100
2.2​
CPI ANNUAL RATE 01.1.3.6 Other preserved or processed fish and seafood - based preparations 2015=100
1.1​
CPI ANNUAL RATE 01.1.4 : MILK, CHEESE & EGGS 2015=100
4.4​
CPI ANNUAL RATE 01.1.4.1 Whole milk 2015=100
6.6​
CPI ANNUAL RATE 01.1.4.2 Low fat milk 2015=100
8.2​
CPI ANNUAL RATE 01.1.4.4 Yoghurt 2015=100
6.4​
CPI ANNUAL RATE 01.1.4.5 Cheese and curd 2015=100
-0.8​
CPI ANNUAL RATE 01.1.4.6 Other milk products 2015=100
3.8​
CPI ANNUAL RATE 01.1.4.7 Eggs 2015=100
7.2​
CPI ANNUAL RATE 01.1.5 : OILS & FATS 2015=100
13.1​
CPI ANNUAL RATE 01.1.5.1 Butter 2015=100
7.2​
CPI ANNUAL RATE 01.1.5.2 Margarine and other vegetable fats 2015=100
27.3​
CPI ANNUAL RATE 01.1.5.3 Olive oil 2015=100
4.4​
CPI ANNUAL RATE 01.1.6 : FRUIT 2015=100
5.2​
CPI ANNUAL RATE 01.1.6.1 Fresh or chilled fruit 2015=100
6​
CPI ANNUAL RATE 01.1.6.3 Dried fruit and nuts 2015=100
1.6​
CPI ANNUAL RATE 01.1.6.4 Preserved fruit and fruit-based products 2015=100
2.4​
CPI ANNUAL RATE 01.1.7 : VEGETABLES INCLUDING POTATOES AND OTHER TUBERS 2015=100
6​
CPI ANNUAL RATE 01.1.7.1 Fresh or chilled vegetables other than potatoes and other tubers 2015=100
4.3​
CPI ANNUAL RATE 01.1.7.2 Frozen vegetables other than potatoes and other tubers 2015=100
5.1​
CPI ANNUAL RATE 01.1.7.3 Dried vegetables, other preserved or processed vegetables 2015=100
8.6​
CPI ANNUAL RATE 01.1.7.4 Potatoes 2015=100
3.6​
CPI ANNUAL RATE 01.1.7.5 Crisps 2015=100
9​
CPI ANNUAL RATE 01.1.7.6 Other tubers and products of tuber vegetables 2015=100
-0.5​
CPI ANNUAL RATE 01.1.8.1 Sugar 2015=100
1.9​
CPI ANNUAL RATE 01.1.8.2 Jams, marmalades and honey 2015=100
4.5​
CPI ANNUAL RATE 01.1.8.3 Chocolate 2015=100
2.4​
CPI ANNUAL RATE 01.1.8.4 Confectionery products 2015=100
1.7​
CPI ANNUAL RATE 01.1.8.5 Edible ices and ice cream 2015=100
5.5​
CPI ANNUAL RATE 01.1.9 : FOOD PRODUCTS (NEC) 2015=100
7.7​
CPI ANNUAL RATE 01.1.9.1 Sauces, condiments 2015=100
11.6​
CPI ANNUAL RATE 01.1.9.4 Ready-made meals 2015=100
4.6​
CPI ANNUAL RATE 01.1.9.9 Other food products n.e.c. 2015=100
3.5​
CPI ANNUAL RATE 01.2 : NON-ALCOHOLIC BEVERAGES 2015=100
1.8​
CPI ANNUAL RATE 01.2.1 : COFFEE, TEA, COCOA 2015=100
0.4​
CPI ANNUAL RATE 01.2.1.1 Coffee 2015=100
0.2​
CPI ANNUAL RATE 01.2.1.2 Tea 2015=100
0.8​
CPI ANNUAL RATE 01.2.1.3 Cocoa and powdered chocolate 2015=100
0.4​
CPI ANNUAL RATE 01.2.2 : MINERAL WATERS, SOFT DRINKS AND JUICES 2015=100
2.3​
CPI ANNUAL RATE 01.2.2.1 Mineral or spring waters 2015=100
4​
CPI ANNUAL RATE 01.2.2.2 Soft drinks 2015=100
1.1​
CPI ANNUAL RATE 01.2.2.3 Fruit and vegetable juices 2015=100
4.2​
 
Last edited:

brad465

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11 Aug 2010
Messages
4,763
Location
Maidstone
If the BoE raised interest rates to increase the value of the £, what effect do you think that would have on those paying mortgages, either directly or through their rent?
The BoE and their western equivalents are basically propping up a failed system. The failure arrived in 2008, and their response in QE and low rates was supposed to be a short term measure. But instead they got addicted, and have now created their own house of cards that can only survive on keeping the status quo. 2008 should have been the wake up call to do things differently; if putting interest rates up and withdrawing "pretend money" causes the system to collapse, it's because the system was never fit for purpose in the first place.
There's also the question of what's causing the inflation. Raising interest rates dampens demand as it becomes more expensive for companies to borrow to invest. Which is fine when the inflation is being driven by excessive demand. However much of the price rises at the moment appear to be coming from a lack of supply of energy globally. Which us raising interest rates is going to do nothing to affect. The other lever the BoE can pull is Quantative Easing. They pumped a lot of money in over the pandemic which absent other factors would be inflationary. Calling in those bonds or just letting them lapse should have the opposite effect without needing to touch the interest rates.
If the BoE acted ahead and or more tightly on monetary policy compared to the likes of the ECB and the Fed, tighter policy increases the value of the currency. A stronger currency reduces import costs, which in turn reduces inflation on imported goods and raw materials. This is why a notable uptick in inflation occurred for around a year after the referendum,: a collapse in the pound increased import costs.
 

Wynd

Member
Joined
13 Dec 2021
Messages
265
Location
Aberdeenshire
Have you monitored the 100s of different food items that are brought regularly by consumers - if not how do you come to that conclusion?.

The table shows the annual increase in each element of the food basket - these are broken down still futher in the actual data collected by ONS. Interested to know which items you feel ONS have got wrong.

CPI ANNUAL RATE 01.1 : FOOD 2015=100
4.5​
CPI ANNUAL RATE 01.1.1 : BREAD & CEREALS 2015=100
3.4​
CPI ANNUAL RATE 01.1.1.1 Rice 2015=100
2.5​
CPI ANNUAL RATE 01.1.1.2 Flours and other cereals 2015=100
-10.7​
CPI ANNUAL RATE 01.1.1.3 Bread 2015=100
4.4​
CPI ANNUAL RATE 01.1.1.4 Other bakery products 2015=100
5.5​
CPI ANNUAL RATE 01.1.1.5 Pizza and quiche 2015=100
1.6​
CPI ANNUAL RATE 01.1.1.6 Pasta products and couscous 2015=100
3.5​
CPI ANNUAL RATE 01.1.1.7/8 Breakfast cereals and other cereal products 2015=100
0.6​
CPI ANNUAL RATE 01.1.2 : MEAT 2015=100
4.4​
CPI ANNUAL RATE 01.1.2.1 Beef and veal 2015=100
7.3​
CPI ANNUAL RATE 01.1.2.2 Pork 2015=100
3.4​
CPI ANNUAL RATE 01.1.2.3 Lamb and goat 2015=100
8.5​
CPI ANNUAL RATE 01.1.2.4 Poultry 2015=100
4.8​
CPI ANNUAL RATE 01.1.2.6 Edible offal 2015=100
5.6​
CPI ANNUAL RATE 01.1.2.7 Dried, salted or smoked meat 2015=100
2.8​
CPI ANNUAL RATE 01.1.2.8 Other meat preparations 2015=100
4.2​
CPI ANNUAL RATE 01.1.3 : FISH 2015=100
1.7​
CPI ANNUAL RATE 01.1.3.1 Fresh or chilled fish 2015=100
2.6​
CPI ANNUAL RATE 01.1.3.4 Frozen seafood 2015=100
2.2​
CPI ANNUAL RATE 01.1.3.6 Other preserved or processed fish and seafood - based preparations 2015=100
1.1​
CPI ANNUAL RATE 01.1.4 : MILK, CHEESE & EGGS 2015=100
4.4​
CPI ANNUAL RATE 01.1.4.1 Whole milk 2015=100
6.6​
CPI ANNUAL RATE 01.1.4.2 Low fat milk 2015=100
8.2​
CPI ANNUAL RATE 01.1.4.4 Yoghurt 2015=100
6.4​
CPI ANNUAL RATE 01.1.4.5 Cheese and curd 2015=100
-0.8​
CPI ANNUAL RATE 01.1.4.6 Other milk products 2015=100
3.8​
CPI ANNUAL RATE 01.1.4.7 Eggs 2015=100
7.2​
CPI ANNUAL RATE 01.1.5 : OILS & FATS 2015=100
13.1​
CPI ANNUAL RATE 01.1.5.1 Butter 2015=100
7.2​
CPI ANNUAL RATE 01.1.5.2 Margarine and other vegetable fats 2015=100
27.3​
CPI ANNUAL RATE 01.1.5.3 Olive oil 2015=100
4.4​
CPI ANNUAL RATE 01.1.6 : FRUIT 2015=100
5.2​
CPI ANNUAL RATE 01.1.6.1 Fresh or chilled fruit 2015=100
6​
CPI ANNUAL RATE 01.1.6.3 Dried fruit and nuts 2015=100
1.6​
CPI ANNUAL RATE 01.1.6.4 Preserved fruit and fruit-based products 2015=100
2.4​
CPI ANNUAL RATE 01.1.7 : VEGETABLES INCLUDING POTATOES AND OTHER TUBERS 2015=100
6​
CPI ANNUAL RATE 01.1.7.1 Fresh or chilled vegetables other than potatoes and other tubers 2015=100
4.3​
CPI ANNUAL RATE 01.1.7.2 Frozen vegetables other than potatoes and other tubers 2015=100
5.1​
CPI ANNUAL RATE 01.1.7.3 Dried vegetables, other preserved or processed vegetables 2015=100
8.6​
CPI ANNUAL RATE 01.1.7.4 Potatoes 2015=100
3.6​
CPI ANNUAL RATE 01.1.7.5 Crisps 2015=100
9​
CPI ANNUAL RATE 01.1.7.6 Other tubers and products of tuber vegetables 2015=100
-0.5​
CPI ANNUAL RATE 01.1.8.1 Sugar 2015=100
1.9​
CPI ANNUAL RATE 01.1.8.2 Jams, marmalades and honey 2015=100
4.5​
CPI ANNUAL RATE 01.1.8.3 Chocolate 2015=100
2.4​
CPI ANNUAL RATE 01.1.8.4 Confectionery products 2015=100
1.7​
CPI ANNUAL RATE 01.1.8.5 Edible ices and ice cream 2015=100
5.5​
CPI ANNUAL RATE 01.1.9 : FOOD PRODUCTS (NEC) 2015=100
7.7​
CPI ANNUAL RATE 01.1.9.1 Sauces, condiments 2015=100
11.6​
CPI ANNUAL RATE 01.1.9.4 Ready-made meals 2015=100
4.6​
CPI ANNUAL RATE 01.1.9.9 Other food products n.e.c. 2015=100
3.5​
CPI ANNUAL RATE 01.2 : NON-ALCOHOLIC BEVERAGES 2015=100
1.8​
CPI ANNUAL RATE 01.2.1 : COFFEE, TEA, COCOA 2015=100
0.4​
CPI ANNUAL RATE 01.2.1.1 Coffee 2015=100
0.2​
CPI ANNUAL RATE 01.2.1.2 Tea 2015=100
0.8​
CPI ANNUAL RATE 01.2.1.3 Cocoa and powdered chocolate 2015=100
0.4​
CPI ANNUAL RATE 01.2.2 : MINERAL WATERS, SOFT DRINKS AND JUICES 2015=100
2.3​
CPI ANNUAL RATE 01.2.2.1 Mineral or spring waters 2015=100
4​
CPI ANNUAL RATE 01.2.2.2 Soft drinks 2015=100
1.1​
CPI ANNUAL RATE 01.2.2.3 Fruit and vegetable juices 2015=100
4.2​

Lies, lies and statistics. May i suggest you read this: https://twitter.com/bootstrapcook/status/1483778776697909252?s=21

Hey, if you are happy to believe these numbers then who am I to debase you of that view.

When we look at the money supply, the cost of removing the shrink-flation aspect, and actually evaluate inflation on a metric that people could identify with on a day to day basis, it becomes ever more difficult to accept the figures presented above.

The information is out there.

The BoE and their western equivalents are basically propping up a failed system. The failure arrived in 2008, and their response in QE and low rates was supposed to be a short term measure. But instead they got addicted, and have now created their own house of cards that can only survive on keeping the status quo. 2008 should have been the wake up call to do things differently; if putting interest rates up and withdrawing "pretend money" causes the system to collapse, it's because the system was never fit for purpose in the first place.

If the BoE acted ahead and or more tightly on monetary policy compared to the likes of the ECB and the Fed, tighter policy increases the value of the currency. A stronger currency reduces import costs, which in turn reduces inflation on imported goods and raw materials. This is why a notable uptick in inflation occurred for around a year after the referendum,: a collapse in the pound increased import costs.
Ah but this is only half of the story. A stronger pound hurts UK exports, which are already absolutely critical for the balance of payments. The UK has not been faring well on BOP for decades, and anything that hurts exports presents an existential risk to the current system.

To say it another way, inflation, weather imported or driven inside the uk, is a small price to pay to stave off a sovereign debt crisis. Then again, with the BOE now owning 1/3rd of the Gilt market maybe it doesn't matter if we buy all our own sovereign issuance, oh, no, wait, that wont work either.....
 
Last edited:

deltic

Established Member
Joined
8 Feb 2010
Messages
2,709
Lies, lies and statistics.

Hey, if you are happy to believe these numbers then who am I to debase you of that view.

When we look at the money supply, the cost of removing the shrink-flation aspect, and actually evaluate inflation on a metric that people could identify with on a day to day basis, it becomes ever more difficult to accept the figures presented above.

The information is out there.
Where is the information, I have presented you with clear information on each element that makes up the inflation index for food. The New Stateman has presented even more detail - although this is for the discredited RPI index - showing how the average and lowest price item in each category has changed https://datawrapper.dwcdn.net/RCZg1/8/ . The first page is a bit sensationalist and you need to scroll through all 57 pages to get a clearer indication of what is going on. However, for some items it is clear that inflation has been higher for lower priced goods hence why I agree there should be separate indices based on household income groups.

However denouncing statistics that have been put together by an independent body, that regularly calls out government ministers for the misuse of data, as lies just because they dont tie in with your perceptions is extremely disingenuous.

[I see you have edited your post and have added a link to Jack Monroe's tweet with her price list since I started writing my response. It is always good to have data to discuss although again a single data source recalled from memory is not the same as a sample taken from a range of outlets across the country on a rolling basis]
 
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WelshBluebird

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Of course the problem here is what each specific person sees as "inflation" will very much depend not just on what they buy, how often and how much but also the availability. One of the things that Jack Monroe has flagged up over the last 18 months on Twitter quite often is that the value / own label products have been less available to buy compared to the full price / brand label products. So even if the "official" inflation percentage for butter or eggs is 7.2%, if I usually get the own label value brand but that is hardly ever in stock so I have to buy the more expensive brand, the real inflation rate on that item is much much higher. I've chosen eggs on purpose there because my local supermarkets have recently only had the organic free range options in stock which are about 70% more expensive! Fine for someone like me who can afford it (and doesn't mind paying more for a better quality less cruel product), but not fine for someone who already is having to chose between food and heating. And sure specific items are often likely to be out of stock, that isn't new - but at least in my experience (and in other people's experiences based on Twitter), it has been a lot more common recently for cheaper items to be out of stock but the more expensive ones to have plenty of stock.
 

deltic

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Of course the problem here is what each specific person sees as "inflation" will very much depend not just on what they buy, how often and how much but also the availability. One of the things that Jack Monroe has flagged up over the last 18 months on Twitter quite often is that the value / own label products have been less available to buy compared to the full price / brand label products. So even if the "official" inflation percentage for butter or eggs is 7.2%, if I usually get the own label value brand but that is hardly ever in stock so I have to buy the more expensive brand, the real inflation rate on that item is much much higher. I've chosen eggs on purpose there because my local supermarkets have recently only had the organic free range options in stock which are about 70% more expensive! Fine for someone like me who can afford it (and doesn't mind paying more for a better quality less cruel product), but not fine for someone who already is having to chose between food and heating. And sure specific items are often likely to be out of stock, that isn't new - but at least in my experience (and in other people's experiences based on Twitter), it has been a lot more common recently for cheaper items to be out of stock but the more expensive ones to have plenty of stock.
Its interesting that the Grocer reports year on year inflation at Asda at 7.5% and at Waitrose just 1%. It doesnt provide figures for Lidl or Aldi as they dont have a comparable basket of goods
 

Wynd

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Where is the information, I have presented you with clear information on each element that makes up the inflation index for food. The New Stateman has presented even more detail - although this is for the discredited RPI index - showing how the average and lowest price item in each category has changed https://datawrapper.dwcdn.net/RCZg1/8/ . The first page is a bit sensationalist and you need to scroll through all 57 pages to get a clearer indication of what is going on. However, for some items it is clear that inflation has been higher for lower priced goods hence why I agree there should be separate indices based on household income groups.

However denouncing statistics that have been put together by an independent body, that regularly calls out government ministers for the misuse of data, as lies just because they dont tie in with your perceptions is extremely disingenuous.
Well, that may be so, but I would suggest you are flying a little close to the wire in placing so much faith in statistics that the government has an inherent interest in massaging for its own ends.

I do doubt the veracity of the ONS data presented, as I see scant evidence of it in my day to day life. I do however see double digit increases in the things I do buy, and boy am I a boring shopper. Same things week in week out, bill moving northwards in an ever accelerating manner.

So, in the interests of evidence lets have a look at the second data set you presented and see if we cant get a little closer to the truth.

If we take out some of the more exotic items such as, earrings, umbrella or "small caged animal" whatever that means, and actually look at food, that daily staple, what do we get?

10% on a median basis and 24% if you are unfortunate enough to happen to be poor in the current day and age.

4% inflation. Aye, right enough.

I'm sure it will be noted that Beef, TV's and Portable music players are missing. Rest assured these would have pushed the figures even higher, but the question that really stands out is, what kind of Honey does the government think we are buying?!



1642689836499.png
 
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jon0844

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EE, Vodafone and O2 are now increasing many bills by between 9 and 11% this year (that's going to hurt those who bought expensive phones and are paying £50, 60, 70 per month). That's not insignificant amounts of money at all - and most adults probably have a contract of some sort. Older contracts will come under RPI rather than CPI + a fixed amount so even they won't exactly come out much better off either.

Some networks are doing split contracts, so you pay off a phone separately, in which case the increase only applies to the handset plan/tariff, but a lot fewer customers will have contracts like this. Indeed, EE is yet to launch its scheme.

The next big increases will likely be Netflix, Disney+ and so on. I do hope people are prepared for all this as well as the energy price increases - all totally independent of the extra cost of shopping for food.

Clearly someone will argue that nobody needs a phone or to watch TV, but those that live in the real world must see that some of us are going to be paying £100-200 more just on stuff like this, before worrying about food and the cost of electricity, petrol, gas etc.
 

JamesT

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Well, that may be so, but I would suggest you are flying a little close to the wire in placing so much faith in statistics that the government has an inherent interest in massaging for its own ends.

I do doubt the veracity of the ONS data presented, as I see scant evidence of it in my day to day life. I do however see double digit increases in the things I do buy, and boy am I a boring shopper. Same things week in week out, bill moving northwards in an ever accelerating manner.

So, in the interests of evidence lets have a look at the second data set you presented and see if we cant get a little closer to the truth.

If we take out some of the more exotic items such as, earrings, umbrella or "small caged animal" whatever that means, and actually look at food, that daily staple, what do we get?

10% on a median basis and 24% if you are unfortunate enough to happen to be poor in the current day and age.

4% inflation. Aye, right enough.



View attachment 109034
Are you just taking the average of the changes in prices to produce those overall numbers?
That's going to give you a completely useless number unless you actually just buy one of each thing. For example, one of the items in the list is 1000l of kerosene delivered. I suggest that if you do purchase such a thing, it's going to be fairly infrequent so the 50% rise may not have as much of an effect as another item that you buy every week.
That's why the ONS weight their basket of goods so they are reflective of the purchases of the average person.

The ONS is independent of government, they were removed from ministerial control by Gordon Brown's government. There's no reason for them to be compliant in any 'massaging' of figures.

The plural of anecdote is not data. Although you and Jack Monroe may have found your personal purchases have increased in price more than the official rate, that doesn't invalidate the work the ONS does to produce statistics for the country as a whole.
 

Wynd

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Are you just taking the average of the changes in prices to produce those overall numbers?
That's going to give you a completely useless number unless you actually just buy one of each thing. For example, one of the items in the list is 1000l of kerosene delivered. I suggest that if you do purchase such a thing, it's going to be fairly infrequent so the 50% rise may not have as much of an effect as another item that you buy every week.
That's why the ONS weight their basket of goods so they are reflective of the purchases of the average person.

The ONS is independent of government, they were removed from ministerial control by Gordon Brown's government. There's no reason for them to be compliant in any 'massaging' of figures.

The plural of anecdote is not data. Although you and Jack Monroe may have found your personal purchases have increased in price more than the official rate, that doesn't invalidate the work the ONS does to produce statistics for the country as a whole.

A crude analysis I accept, but it highlights the point. Food inflation is not 4%.
 

brad465

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Are you just taking the average of the changes in prices to produce those overall numbers?
That's going to give you a completely useless number unless you actually just buy one of each thing. For example, one of the items in the list is 1000l of kerosene delivered. I suggest that if you do purchase such a thing, it's going to be fairly infrequent so the 50% rise may not have as much of an effect as another item that you buy every week.
That's why the ONS weight their basket of goods so they are reflective of the purchases of the average person.
I wonder if around the time the original calculation was devised the average was fairly good, but inequality has deepened so much since 2008 that the average is now very detached from opposing ends of standard of living. Calculating the mean is not always a good representation if extremes are very far apart, and alternative measures of average are then better, such as median or mode. Either that or we try and do more to tackle inequality so a mean calculation is more representative again, although a flawed calculation currently won't do much to help that, which is probably what's led to Jack Monroe calling out the flaws in the current methodology.
 

david1212

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....

I wonder if the Labour Party will ever introduce a 'Consumer Essentials Index' to use in relation to State Pension, benefits etc.?


TV's, Electronics should absolutely not be included in the inflation statistics for the very simple and highly obvious reason that they are NOT everyday items.

What inflation should assess is food, fuel, and housing costs. Things we all need to buy to survive.

An index just covering essentials would be useful.

While TV, electronic games etc certainly are not essential life becomes difficult without one laptop and one fairly basic smartphone plus broadband and a phone package with a reasonable monthly data allowance per household.
Over the last 20 months online has been the preferred access for so many services not least healthcare, financial and education. While for now very few situations where no other option the preferred medium for travel tickets is ever increasingly a smartphone. The smartphone app can exclusively be the cheapest ticket for weekly or multi-journey tickets, important if a limited income.


Something brought up at work recently is while in real terms most electrical items cost less than say 30 years ago they also have a shorter life. 5 years now seems typical for a fridge-freezer. Overall in real terms paying £600 every 15 years is less than £300 every 5 years. If inflation / cost of living indexes only sees the reduction in price but not the increased frequency of purchase they are not a true representation of average long term expenditure.
 

Dai Corner

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Something brought up at work recently is while in real terms most electrical items cost less than say 30 years ago they also have a shorter life. 5 years now seems typical for a fridge-freezer. Overall in real terms paying £600 every 15 years is less than £300 every 5 years. If inflation / cost of living indexes only sees the reduction in price but not the increased frequency of purchase they are not a true representation of average long term expenditure.
If items are being bought three times as frequently that will be reflected in the weightings given to them in calculating the index.
 

The Ham

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An index just covering essentials would be useful.

While TV, electronic games etc certainly are not essential life becomes difficult without one laptop and one fairly basic smartphone plus broadband and a phone package with a reasonable monthly data allowance per household.
Over the last 20 months online has been the preferred access for so many services not least healthcare, financial and education. While for now very few situations where no other option the preferred medium for travel tickets is ever increasingly a smartphone. The smartphone app can exclusively be the cheapest ticket for weekly or multi-journey tickets, important if a limited income.


Something brought up at work recently is while in real terms most electrical items cost less than say 30 years ago they also have a shorter life. 5 years now seems typical for a fridge-freezer. Overall in real terms paying £600 every 15 years is less than £300 every 5 years. If inflation / cost of living indexes only sees the reduction in price but not the increased frequency of purchase they are not a true representation of average long term expenditure.

Our fridge freezer was purchased in 2010, as was our washing machine and oven, all are still going strong (OK we had to replace a seal on the washing machine early on, which would have been uneconomical of we had paid someone to do it, however it was fairly easy to do and if it didn't work we'd have been something like £40 down and just brought a new one anyway).

Whilst we're looking to replace the fridge freezer (also the cooker) soon that's more to do with the fact that we're looking at replacing our kitchen and or current one is a little on the small side for the number in our household (was purchased when there was two of us).

However when we do we'll see if anyone wishes to have it.

Now we could just be lucky, but we're well on the way to them being 15 years old, certainly well over 5.
 

DelayRepay

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I wonder if around the time the original calculation was devised the average was fairly good, but inequality has deepened so much since 2008 that the average is now very detached from opposing ends of standard of living. Calculating the mean is not always a good representation if extremes are very far apart, and alternative measures of average are then better, such as median or mode. Either that or we try and do more to tackle inequality so a mean calculation is more representative again, although a flawed calculation currently won't do much to help that, which is probably what's led to Jack Monroe calling out the flaws in the current methodology.

Caution is needed. If the method of calculating inflation is changed to make it more accurate, we'd end up with a higher figure. So all those costs that are linked to CPI would increase even more; rail tickets, phone bills, etc.

We should tackle inequality but changing the calculation could make things worse, not better.
 

Wynd

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Caution is needed. If the method of calculating inflation is changed to make it more accurate, we'd end up with a higher figure. So all those costs that are linked to CPI would increase even more; rail tickets, phone bills, etc.

We should tackle inequality but changing the calculation could make things worse, not better.

Em, but, we are ending up with higher prices, its just that we aren't seeing it reflected in the metric. The primary issue here is surely that its not representative of reality. If the inflation rate was fully real we might have the government acting in a way that helps us as consumers.

If CPI was reported as 8% for example, there would be huge political pressure on not passing that on to consumers.

Also, per the above data, there is something extremely unfair about cheap goods prices rising at twice the rate of median priced goods. That implies that the basic minimum input costs are passed right on to consumers, but for median goods the retailer is absorbing some of the cost.

So if you are poor, you are facing 20+% price rises, if you are slightly wealthier then its less severe. This is of course on foodstuffs
 
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Peter Sarf

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An index just covering essentials would be useful.

While TV, electronic games etc certainly are not essential life becomes difficult without one laptop and one fairly basic smartphone plus broadband and a phone package with a reasonable monthly data allowance per household.
Over the last 20 months online has been the preferred access for so many services not least healthcare, financial and education. While for now very few situations where no other option the preferred medium for travel tickets is ever increasingly a smartphone. The smartphone app can exclusively be the cheapest ticket for weekly or multi-journey tickets, important if a limited income.


Something brought up at work recently is while in real terms most electrical items cost less than say 30 years ago they also have a shorter life. 5 years now seems typical for a fridge-freezer. Overall in real terms paying £600 every 15 years is less than £300 every 5 years. If inflation / cost of living indexes only sees the reduction in price but not the increased frequency of purchase they are not a true representation of average long term expenditure.
My bold.

This is very important. Having access to the internet is a fundamental requirement these days. A person claiming benefits cannot do this without an online account so the internet is a basic essential.

Incidentally it is rather hard for older people who are less likely to be computer literate. But are forced / encouraged into the online route for some service/renewal as the phone route either does not exist or is a premium rate number.

I can remember many decades ago when a phone line was seen as essential.
Our fridge freezer was purchased in 2010, as was our washing machine and oven, all are still going strong (OK we had to replace a seal on the washing machine early on, which would have been uneconomical of we had paid someone to do it, however it was fairly easy to do and if it didn't work we'd have been something like £40 down and just brought a new one anyway).

Whilst we're looking to replace the fridge freezer (also the cooker) soon that's more to do with the fact that we're looking at replacing our kitchen and or current one is a little on the small side for the number in our household (was purchased when there was two of us).

However when we do we'll see if anyone wishes to have it.

Now we could just be lucky, but we're well on the way to them being 15 years old, certainly well over 5.
My bold. I find myself wondering if you are referring to the fridge freezer or the kitchen (units).

Question. How likely are you to find a taker for a second hand fridge freezer (or other) ?.

The answer might lie in how likely are you to take a second hand fridge freezer (or other) from someone else ?.

There is a lot of waste of serviceable white good etc.
 

The Ham

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Question. How likely are you to find a taker for a second hand fridge freezer (or other) ?.

I suspect that you may be right, hence my wording. However it should be noted that there's also a lot of people who have very little and so given a wide enough audience someone would likely take it.
 

seagull

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I bought a second-hand fridge-freezer (Beko) 7 years ago for 5 quid, local pickup and in good condition. Still working happily today :)
 

david1212

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If items are being bought three times as frequently that will be reflected in the weightings given to them in calculating the index.

This is good to know as I'm unaware of the details and not got lots of time to research.


Our fridge freezer was purchased in 2010, as was our washing machine and oven, all are still going strong (OK we had to replace a seal on the washing machine early on, which would have been uneconomical of we had paid someone to do it, however it was fairly easy to do and if it didn't work we'd have been something like £40 down and just brought a new one anyway).

Whilst we're looking to replace the fridge freezer (also the cooker) soon that's more to do with the fact that we're looking at replacing our kitchen and or current one is a little on the small side for the number in our household (was purchased when there was two of us).

However when we do we'll see if anyone wishes to have it.

Now we could just be lucky, but we're well on the way to them being 15 years old, certainly well over 5.

I bought a second-hand fridge-freezer (Beko) 7 years ago for 5 quid, local pickup and in good condition. Still working happily today :)

...
There is a lot of waste of serviceable white good etc.

Within a small circle of contacts I know of three fridge-freezers that only lasted around 5 years and one much less. For the latter the combination of cost and time delay made repair unviable ...

My current stand alone fridge is approaching 30 years old and the stand alone freezer I was using until recently and still working around 20. I have a new freezer but am loath to scrap the old one.


.....

Incidentally it is rather hard for older people who are less likely to be computer literate. But are forced / encouraged into the online route for some service/renewal as the phone route either does not exist or is a premium rate number.

I can remember many decades ago when a phone line was seen as essential.

.....

Many older people are totally reliant on others e.g. family, neighbours, friends, carers to actually access online services while they watch and dictate the information.
 

The Ham

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Many older people are totally reliant on others e.g. family, neighbours, friends, carers to actually access online services while they watch and dictate the information.

Whilst that is true sometimes that's due to health issues rather than the inability to use the internet (which is at least the case for one of my 3 remaining grandparents, all of whom are over 88)

Whilst one has never used the internet (now mid 90's) that's due to having had significant eyesight issues for some time and so never learnt.

Conversely, my dad (early 70's) is very tech savvy, however that was due to his job needing to use computers fairly early on (in aware of him using computers in at least the mid 80's). Whilst not specifically in the IT industry, he did learn quite a lot which he could have used to have got a job in it if he wished. To the extent that his IT department probably got worried when he contacted them for support.
 

Dai Corner

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Whilst that is true sometimes that's due to health issues rather than the inability to use the internet (which is at least the case for one of my 3 remaining grandparents, all of whom are over 88)

Whilst one has never used the internet (now mid 90's) that's due to having had significant eyesight issues for some time and so never learnt.

Conversely, my dad (early 70's) is very tech savvy, however that was due to his job needing to use computers fairly early on (in aware of him using computers in at least the mid 80's). Whilst not specifically in the IT industry, he did learn quite a lot which he could have used to have got a job in it if he wished. To the extent that his IT department probably got worried when he contacted them for support.
My father and his second wife (mid 80s) are very confident/competent, having worked in technical roles at the BBC starting in the 1950s. A couple of years ago he was asking me about buying a new Smartphone which would do contactless payments.

My mother happily exchanges emails but her second husband relies on her. She prints out emails from his grandchildren, he gives her a handwritten reply which she types up and sends. That's how an academic and secretary/administrator (which is what they were) worked in their time. I think Mum would use more online services if he weren't there. On the other hand Mum doesn't drive but is a good navigator and they manage longer car journeys as a team.
 

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