Saturday, August 12, 2006

I don't care what you say, inflation is coming back

There is no doubt about it, inflation is coming back. I don't care what the Government claims about inflation being at all time low. The manner in which Gordon Brown calculates inflation is hopelessly unrealistic to what ordinary people see on the street. The Price Index used for inflation conveniently misses indicators that we nobodies use to gauge how good things are. It doesn't take house prices into account, nor Council tax or child care costs. For anyone who is childless and thus unaware, the average cost of childcare is about £50 a day. Now multiply that by five and again by four and you'll discover it's like a second mortgage repayment each month.

A quick walk around a supermarket will show you how much prices are going up. Three baking potatoes will cost you at least £1.50, a small tube of Colgate toothpaste is nearly £3. Even the budget tins of beans (50% liquid) are now over 20p (having been as little as 9p a few years ago). Petrol is nearly £5 per gallon. There's no doubt about it, prices are rising, and they're rising much faster than the supposed 2.5% inflation rate.

I've no doubt that someone in the comments will probably point out how I'm actually wrong and cite lots of key figures that show the world to be fluffy. The problem is, normal people don't use the figures they use their experience. It's the same with the NHS, the Government can tell us how much better it is, but people tend to remember their last experience. I think this kind of things get called "isolated incidents". Anyhow, inflation is definitely rising at a greater rate than the Government would have us believe and you only have to pay attention to the prices on the shelf to know it's true.


Croydonian said...

I read somewhere the other day that a problem with the RPI figures is that they are skewed towards the likes of clothes and electronics, the prices of which have tumbled in recent years.

Anonymous said...

Yup - I read the same thing. I keep meaning to do a calculation based on the RPI but with things like mortgages and increased tax burdens taken into account. Problem is, I would have to think about that and I haven't had the time!

Tapestry said...

Supermarkets often discontinue cheap foods as they are not profitable, and they look for ways to 'add value'. Tasty sausages go, and get replaced by herbal 'special' ones with fancy packaging.

Time to shop direct from organic farmers on the internet - and get your baked potatoes and meats that way. Supermarket inflation is voluntary. Shop around. Eat healthier and cheaper - about half the price on average.

The Daily Pundit said...

".....Three baking potatoes will cost you at least £1.50....."

Where are you getting your spuds from Dizzy? Harrods?

dizzy said...

GO and have a look at the price in Morrisons, Sainsbury and Tesco. Seriously, I nearly fell over myself when I saw it.

Chris Whiteside said...

The RPI - which is what used to be quoted as the main measure of inflation - does include housing costs etc.

However, the government has now replaced it as the favoured measure of inflation with the Consumer Price Index (CPI) which doesn't. I think Croydonian was actually referring to the problems with the CPI, which has been nicknamed the "Chav Price Index" for that reason.

AJD, the RPI is still calculated, you should be able to find the latest figures on the internet without difficulty and they are indeed a percentage point or so higher than the CPI.

One of the suggestions in Osborne's book "The rise of political lying" was to make the statistical service independent of ministers in the same way the boundary commission is, and I think he had a point.