Reply to: Inflation

[Gonzo]

Good point. House price inflation seems to have been far more damaging than the price of a loaf of bread.

I'm not sure about including house prices in the index calculation, but taken on its own it should have been ringing alarm bells in government anyway.

And am I right in thinking the calculation included mobile phones and other technology that always becomes cheaper as the technology develops? That would have skewed the index down even further.

Here's a document from National Statistics explaining the composition.

http://www.statistics.gov.uk/elmr/04...08_Gooding.pdf

I was quite excited to find it, but it wore me out with boredom.

[vetran]

Council tax should be in inflation

Five bloody percent rise!!!!!!!!

How do they justify that eh?

Bet their pensions haven't just turned to dust!

String em all up, stabbity stab.....


oh feel better now.

[PM-Junkie]

Did I make just make it up or did Brown once say that he was proud of the fact that Labour hadn't screwed up the economy this time?

It's his redefinition of the word "prudence" that had me giggling.

[Cyberman]

Did I make just make it up or did Brown once say that he was proud of the fact that Labour hadn't screwed up the economy this time?

His famous words were 'No return to boom and bust' !!

[TimberWolf]

Did I make just make it up or did Brown once say that he was proud of the fact that Labour hadn't screwed up the economy this time?

[oracleslave]

this lot have been safely despached to the dustbin of political history where they belong.

[TimberWolf]

They didn't need to look at inflation. It was obvious to just about every analyst that bank lending was out of control over two years ago and it was well-publicised in the media. HMG should have acted then with credit controls but as usual they act after a cataclismic event that could have been mostly avoided with pre-emptive action.

I recall being sceptical about a fellow contractors stated intention to buy an expensive house back in 2001, thinking prices were already too high. Turns out they kept going up for another 6 years though. Granted mortgage credit did go especially nuts in the last few years with people going self-cert etc. The bubble went on so long I took my eye off the ball, and when my buyer dropped out 3 years ago I didn't try hard enough to get out of property more recently.

[Cyberman]

You haven't experienced pre-emptive action and a cataclysmic event in decades.

I've never experienced pre-emptive action with this HMG, except to catch tax avoiders.

... and we will see a few more cataclismic events before this lot have been safely despached to the dustbin of political history where they belong.

[oracleslave]

They didn't need to look at inflation. It was obvious to just about every analyst that bank lending was out of control over two years ago and it was well-publicised in the media. HMG should have acted then with credit controls but as usual they act after a cataclismic event that could have been mostly avoided with pre-emptive action.

You haven't experienced pre-emptive action and a cataclysmic event in decades.

[Ruprect]

They didn't need to look at inflation. It was obvious to just about every analyst that bank lending was out of control over two years ago and it was well-publicised in the media. HMG should have acted then with credit controls but as usual they act after a cataclismic event that could have been mostly avoided with pre-emptive action.

You mean just before the general election?

[Cyberman]

If insignificant expenses like mortgages and council taxes were included in the price inflation index calculation, would the boom/bust cycle have rung alarm bells for the economy years ago?

We've have had 10 years of high house and tax rises and the correction for this is expected to be deflationary period. Except council taxes of course, which always go up and up and up and then upppitdy, up. Should the inflation index include the biggest consumer expenses that might take a lifetime paying for, or mostly insignificant stuff that's shows how good the economy is performing to make the government look good?

They didn't need to look at inflation. It was obvious to just about every analyst that bank lending was out of control over two years ago and it was well-publicised in the media. HMG should have acted then with credit controls but as usual they act after a cataclismic event that could have been mostly avoided with pre-emptive action.

[Mich the Tester]

Instead they include in things like USB memory sticks in the inflation basket

But they're free. Just have a look on the train seat after a HM Government employee gets off.

[swamp]

This has been said before here (by me, amongst others)

If the BoE had been allowed to read the right dial for inflation they would have kept interest rates significantly higher. On its own this wouldn't have stopped the house price boom, but it would have kept it a bit more under control.

Instead they include in things like USB memory sticks in the inflation basket

[expat]

And am I right in thinking the calculation included mobile phones and other technology that always becomes cheaper as the technology develops? That would have skewed the index down even further.

It would have influenced the index, but not skewed it, because people really do buy these things.

[Doggy Styles]

If insignificant expenses like mortgages and council taxes were included in the price inflation index calculation, would the boom/bust cycle have rung alarm bells for the economy years ago?

Good point. House price inflation seems to have been far more damaging than the price of a loaf of bread.

I'm not sure about including house prices in the index calculation, but taken on its own it should have been ringing alarm bells in government anyway.

And am I right in thinking the calculation included mobile phones and other technology that always becomes cheaper as the technology develops? That would have skewed the index down even further.