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UK inflation reaches 5.2% in September
by Dave Keating | October 14, 2008 at 02:25 am | 60 views | 3 comments | 4 recommendations
Rampant inflation in the UK reached an astounding 5.2 percent in September, figures released today reveal. That's the highest level since the currency crisis of 1992.
The Consumer Price Index, the inflation measure most closely watched by policy makers, rose more than expected to 5.2 per cent in September, its highest level since March 1992.
Tuesday’s rise was buoyed mostly by sharp increases in gas and electricity bills that were announced at the end of the summer. The CPI registered 4.7 per cent in August and was widely forecast to hit at least 5.0 per cent in September.
EDITOR’S CHOICEData to paint a gloomy picture - Oct-13Brown presses G7 to follow his lead - Oct-09Britain heading for full recession, warns the IMF - Oct-09Drop in demand for staff sharpest in 11 years - Oct-08Gloom spurs business calls for rate cut - Oct-07Darling weighs boost for banks - Oct-06
However, with the recent turmoil in financial markets and frantic efforts by governments around the world to prevent a collapse of national banking systems, the Bank of England’s Monetary Policy Committee has taken its eye off inflation and focused instead on staving off a severe recession.
Last week, it cut its key lending rate by half a percentage point to 4.5 per cent in a coordinated move with other central banks, despite widespread predictions that inflation would continue on an upward trajectory.
October 14, 2008 at 02:25 am by Dave Keating, 60 views, 3 comments
Most RecentMost Recommended Comments (3)
at 09:00 on October 14th, 2008
5% inflation is a mere shadow of what is coming. <== opinion of course.
at 14:51 on October 14th, 2008
Dave Keating, I like this story. "Buying toxic stock or bailing out banks" = Inflation = distribution of lost orders by buying a Coke and a sandwich overpriced, because money gets worthlless.
- reply
JamesMK (not verified)at 08:29 on October 15th, 2008
The traditional measure of UK inflation is the Retail Price Index (RPI).
Consumer Price Index is now the British Governement's preferred measure of inflation. It uses a different rage of indicators than RPI and is used for international comparisons of consumer prices. It is also known as the Harmonised Index of Consumer Prices.
In order to acheive an international comparison housing prices are excluded from CPI calculations.
Over the last few years, while House prices have been booming, RPI has been consistently around 2% higher than CPI.
Now that house prices are falling they are actually acting as a break on RPI which is now rising slower than CPI.
The result is that CPI (at 5.2%) has now exceeded RPI (at 5.0%) .