OverInflated

http://www.bankofengland.co.uk/index.htm

http://www.statistics.gov.uk/pdfdir/cpi0208.pdf

I guess food, petrol, gas, electric, water don’t count towards CPI, as they’ve all risen massively recently.

Source: Yahoo.com

Utilities firm EDF has become the latest in line to put up its electricity and gas prices.

The French-owned firm says prices are to go up from Friday (18th January) - electricity tariffs up by 7.9% and gas by 12.9%.

EDF has 5.5m account holders in the UK.

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Source: Telegraph

Food cost increase adds £750 to annual bill
By James Kirkup, Political Correspondent
Last Updated: 1:41am GMT 15/01/2008

Food prices are accelerating at their fastest rate since records began, fuelling a rise in the average family’s shopping bill of £750 a year.

Official figures showed wholesale food prices rose by 7.4 per cent in the past 12 months - more than three times the headline rate of inflation……

(Similar take to Harry Wallop’s story a few months back)
Good to see they mention orange juice - as I’ve been going on about it and the lemons in my threads!
“A 500g bag of parsnips cost £1.76 at Asda at the end of last year compared to 98p a year earlier, while Tesco has increased the price of 2.5kilos of Maris Piper potatoes from £1.78 to £2.18.
A dozen free-range eggs from Sainsbury’s rose from £1.62 to £2.35, and Asda increased the price of its orange juice from 73p a litre to 88p.”

The Monetary Policy Committee voted to keep interest rates at 5.5% in January.

Many economists had been predicting a .25 basis points cut, due to an alleged high street slowdown, though many high street stores have had a difficult few months, others such as John Lewis and Morrison had large growth for the quarter (almost double digits) and Internet shopping had increased 60% on the year.

Also inflation is picking up, with 17% gas/electricity rises from NPower and Petrol has risen to 102.9p per litre. The pound has also weakened against the dollar and the euro, which is good for exporters in Britain, but imports become more expensive which fuels inflation.

Npower is to increase both its gas and electricity prices, the UK’s fourth largest energy supplier has confirmed.

The company, which has four million customers, said it would provide exact details on Friday.

Its move comes on the back of high global energy prices, with crude oil hitting a record $100 a barrel in New York earlier this week.

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The governments measure of inflation rose in November

Source: Marketoracle

Source: Telegraph

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MPC have caved into media pressure and cut rates to 5.5% despite the upside risks to inflation.

Source:
http://www.telegraph.co.uk/
By Harry Wallop, Consumer Affairs Correspondent Last Updated: 1:46am GMT 13/11/2007

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Source:
Telegraph

By Harry Wallop, Consumers Affairs Correspondent
Last Updated: 2:41am BST 23/10/2007

The average family has to spend an extra £750 on their annual food bill, compared with a year ago, according to figures.
# M&S worst supermarket in green report

Supermarkets ‘raise family food bill by £750 a year’
Figures suggest that households are being hit hard by food inflation

In recent weeks, some of the most dramatic signs of food inflation have hit supermarket shelves.

According to price comparison website mySupermarket.com, the three biggest supermarkets – Tesco, Asda and Sainsbury’s – are charging their shoppers 12 per cent more on average for a basket of 25 different goods compared with last year.

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Source: http://www.bankofengland.co.uk/statistics/m4/2007/Sep/index.htm

Consumer price indices
September 2007
In the year to September, the consumer
prices index (CPI) rose by 1.8 per cent,
unchanged from August.
In the year to September, the all items
retail prices index (RPI) rose by 3.9 per
cent, down from 4.1 per cent in August.
Over the same period, the all items RPI
excluding mortgage interest payments
index (RPIX) rose by 2.8 per cent, up
from 2.7 per cent in August.

Source: Bloomberg

Overinflated Editors note:
1.8% when food is rising faster than I’ve ever experienced. Also petrol is still higher than it was last year (and likely to rise).
I also noticed “Reductions in mortgage exit fees” as a reason - why are Mortgage fees in the CPI but not mortgages?

These stats are beyong a joke and we are being lied to (in my opinion)

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(Why would the Bank Of England need Darling to “Authorise them” to bail out Northern Rock if the are independent?)

Source:
Daily Mail

BoE rescues bank hit by global credit squeeze

LONDON: The Bank of England on Friday provided emergency financial support to the first major British bank to be severely hit by the credit crunch sparked by the US home loan crisis.

Northern Rock, Britain’s fifth biggest mortgage lender, warned that its profits would be up to 147 million pounds (214 million euros, $297 million) lower than expected, sending its share price plunging by a quarter in early London trading.

Britain’s finance minister Alistair Darling, who authorised the Bank of England to help Northern Rock, said the mortgage lender’s problems might have been avoided had US banks not been so willing to offer cash to borrowers with poor credit histories.

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Source: Reuters

LONDON, Sept 13 (Reuters) - Britons’ expectations of future inflation held at a series high in August even though the actual rate has fallen below 2 percent, a survey by the Bank of England showed on Thursday.

The central bank’s quarterly survey showed median expectations for the rate of inflation over the coming year were 2.7 percent, the same as in the May survey and matching the highest level since the survey began in 1999.

“High inflation expectations, despite higher interest rates and lower inflation, will remain a lingering concern for the Monetary Policy Committee,” said Paul Dales at Capital Economics.

The figures had little impact on financial markets, which were more focused on a survey overnight showing house prices fell for the first time in two years which reinforced expectations that interest rates have peaked at 5.75 percent.

The Bank had signalled last month it might need to raise rates to 6 percent to control inflation in the medium term, but policymakers are now expected to keep rates on hold while they assess the impact of financial market turbulence.

The BoE survey also showed people’s perception of the current rate of inflation eased slightly in August to 2.8 percent from 3.1 percent in the May survey, but was still well above the latest official reading of 1.9 percent in July.

And more than two-thirds of respondents said they expected interest rates to rise again in the next 12 months, only 4 percent thought they would fall.

“Relatively elevated inflation expectations highlight the fact that there are still significant medium-term inflation risks, and reinforce our belief that the Bank of England will be very wary about any early trimming of interest rates,” said Howard Archer, economist at Global Insight.

The BoE survey was conducted between Aug. 16 and Aug. 21.

Source: Thisishampshire.net

Pay rise for councillors gets go ahead
By Clare Kennedy

A CROSS party committee has agreed that Southampton councillors should be awarded inflation-busting pay rises.

Members of Southampton City Council’s Standards and Governance Panel agreed that councillors worked hard and deserved more money.

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Source: Daily Reckoning

Inflation: Weekly Shopping Bill Could Rise 30 Percent By Christmas

Adam Leyland, editor of The Grocer the food and drink industry’s favourite read says the cost of your weekly shopping bill could rise 30% by Christmas. It’s already risen by 6% from this time last year. But as ever, it’s somebody else’s problem. “If I were [the chancellor] Alistair Darling or a pensioner, Id be very worried,” Leyland says. Phew! Good job he’s the editor of a weekly business-to-business magazine, eh? Your own correspondent confesses that he’s terrified at the prospect of runaway inflation…

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Source: Guardian

Buy-to-let investors are continuing to pile into the property market in spite of rising interest rates, lured by strong rises in rents, the Royal Institution of Chartered Surveyors said today.

Demand for rental property is being supported by the inability of many would-be first-time buyers to afford anything. It is also being fuelled by predictions that the housing market may slow down next year, which encourages potential buyers to hold off.

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MPC have held bank rates at 5.75%

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