Inflation drops sharply in boost for struggling households

Means cock all when you have not had a pay rise for three years.

All it does mean, is the smaller amount of money you do have to spend will stretch a bit longer. So a respite yes but still inflation with no slaries increasing. I would love to know where these 2% average wage increases are

happening.?

Anonymous 1, you need to get a job in banking, I've had annual pay rises of at least 5% plus regular bonuses.

What a load of rubbish this is, try telling that to the average family that inflation is coming down. As to anonymous 1, I agree with your statment, as I too have not had a salary increase now for three years, as for Daniel Bell, say no more.

Yes Daniel. I think people who moan about bankers should become one if they are educated well enough. We actually have to import bankers because not all our universities educate to an high enough level. We have less people coming out of university with a maths degree than we did 18 years ago even thought 4 times more people go to university. It's higher education that is failing our young!

To those whingers complaining about lack of pay rises you should regard yourselves as lucky to have a job, pay rises are only possible if you work for a company with increasing profits, iThis rules out the whole of the public sector, If you do not like this country as you are too poorly paid you are free to move to any other with increasing wages. This after all is what the bankers intend to do as they are of course very badly paid, poor whingers that they are.

I do not understand this. What does the phrase,"fall out of mean". as applied to the VAT rise. I am sure that this does not mean we do not have to pay it.

Please will someone correct me if I am wrong but it looks to me as if Osborn has cooked the figures by leaving out some of the VAT cost. I wonder how long it will be before he solves the unemployment problem by leaving all the people who do not have a job out of the figures. If he then does not pay them any of the unemplyment benefits it will make a significant dent in the debt crisis.

Bob the electrician

To be able to move means there has to be jobs to go to.

Mr Bell I am assuming you are one of these superstars that is able to take the money from the government at 0% and then lend it to the public at between 3 and 8% (depending on the loan) That is a high level of intellect and talent that I unfortunately can only aspire to.

Running construction contracts, dealing with the planning system, carrying out detailed design in line with specifications and standards and ensuring everything runs to budget is purley for F**k witts and I should have obviously re thought my career.

Yes I do still have a job for which I am grateful but if I was on benefits at least my allowance would be tracking inflation.

Public sector is not a proper job though; it was a way the previous incompetent unelected fool of a prime minister who created jobs to reduce the dole queues.

There is an awful lot of company’s using the recession as greed to keep wages down knowing that there are no decent jobs and thus increasing there already inflated profits.

It is not practical or reasonable to up sticks and leave a Country as I get 25k a year guaranteed on benefits, which really appeals to me, why work?

I bet that will be index linked and in turn I will get annual pay rises, only mugs work in this milk and honey country.

Work is for losers, now where are my fags n pint !

So, now that the VAT increase no longer impacts CPI, what every commentator/central banker blamed continuing high inflation on, we still have above target CPI at 3.9% - 1.9% above the specified target.

The BoE continues to fail to control inflation, its primary remit.

Chris

Your research is very poor and is based on Sweden and Finland. Please use better research when making such statements as 'history shows'. You will find that most Countries cut back first, flirt with recession and then grow. This is what the UK is trying to do. The first thing to do is CUT THE PUBLIC SECTOR and encourage the PRIVATE SECTOR to make the money to fund the public sector.

The only time you can increase the public sector first is to throw money at an economy to stop a depression but like in 2008 it can just have the effect of causing a sovereign debt crisis like we have now in EUROPE. The economy would be shrinking at this stage as well.

I just had to respond to the hilarious suggestion of importing bankers with Maths qualifications. How is this done then? Are they containerised and shipped in cheap from China through Lowestoft or wherever? Your average so called banker is so Maths illiterate, they triple counted the same money and then acted all surprised when the numbers didn't add up. I would suggest that the average banker's sole qualification for success is the extraordinary ability to shove their snouts in some surprising and rather distasteful places.

My post was a genuine plea for enlightenment. If you leave out some of the cost ued to calculate inflation, have you not created a new and different index.

Is this new index not relevant to camparing one period of inflation with another.

If there is someone out there that can confirm me in my conclusion or disabuse me of my misunderstanding I will be very grateful.

Bob the electrician

I like the comment rhat "food prices could fall significantly further". Pity that my local Waitrose do not believe in that . Have you all noticed that whenever there is a 'Special Offer' of, say 2 for £3.50 instead of £2 each, when the offer expires the item is suddenly £2.20. Same story in other supermarkets Great example is Kellogs Special K. Not so long ago if was £2.69 regular price, that was followed by regular special offers, the last being 2 for £4 instead of £2.89. Offer finished and now the price is £3.19. Same story in both Sainsbury's and Morriisons

My post was a genuine plea for enlightenment. If you leave out some of the costs when calculating a price index,, have you not created a new index which will not be relevant when comparing inflation under the old index with that under the new one?If someone out there can confirm me in my conclusion or correct me in my error, I will be most grateful

Bob the electrician

Do not be conned, just means prices are not rising just as fast, but rising they are !

Bob the Electrician. Look at it this way. Just more than 12 months ago VAT suddenly went up by 2.5%. That had the effect of causing an upward spike in Jan 2011 rate of inflation. Since then VAT has been constant. Therefore 12 months later in Jan 12 that part of the items included in the index that related to VAT showed no change. Therefore although some other items have increased in cost the net effect is for the no change in VAT rate to cause a reduction in the increase overall when comparing Jan 12 with 12 months ago. Do not forget that not everything in the index includes VAT

Bob - nothing has been left out. One is simply comparing the current prices with those a year ago. Since VAT was increased in Jan 2011 then last February we were paying the higher rate as we are now. So therefore the VAT rise in itself is not reflected in the annual CPI any more.

The fact that, like many others, I have not had a pay rise for 3 years for my part time job is only a part of my concern, As someone who had planned to retire a few years ago, my major concern is the abysmal engineered low interest rates, which are a tax on my savings and my pension fund. And as a double whammy the annuity I could get keeps falling even though I am getting older.

It goes without saying that as a Nation, and like Greece, we have paid ourselves too much as our salaries should have dropped in real terms as our balance of payments worsened over the last 20 years. But Sterling remained relatively strong, so we were able to afford too many imports, and we lost jobs in exporting companies as we were less competitive. Then the Government created 1m extra public jobs with unaffordable pension rights, which also kept salaries up in terms of Sterling. So now, as a Nation we have to reduce our standard of living until we can achieve a trade surplus and repay the debt. The problem is that the burden is not falling equitably. Whilst there are greedy bankers and other over paid executives, cutting their pay would not make a dent in the situation so the problem has to be shouldered almost entirely by Jo public. But those lucky folk on final salary index linked pensions, and many (but not all) of those on benefits are ring fenced. So the burden is concentrated on the rest of us.

The ideal course would be to reverse all of the extra public spending our last government incurred without generous pay offs, and to cut public salaries and pensions accross the board to a level which gives parity with private industyr including the abolition of all index linked rewards.We would still have the problem of paying off our cumulative debt, but at least we would then be in a position to see some growth in exports. Of course spending would drop so the GDP would fall but then so what? The only fundamental issue is are we paying our way in the World. If we are then we can then decide how to cut the cake.

I can see that we have a comment from someone you is a bit thick!

Bob, we are just as deep in the shit as when VAT first rose to 20%; the ordure has not receded, it's just arguably rising at a slower rate. Of course the government expects us to believe otherwise and to be grateful.

Some of the arguments in this string regarding bankers qualifications are laughable; bankers are only bean-counters, all they need are ten fingers, and toes when the going gets tough; apart from that is an over supply of the competitive greed gene and that's it. The banks don't create wealth, they simply count money and manipulate it in accordance with their esoteric protocols to take it from one place to go to another for third parties, in the passage of which they rake off a nice % retainer and fees.

It is only in engineering and the sciences that maths is needed and used productively to create wealth.

Of course the banks do employ some who can do basic sums in accordance with strange procedures - called analysts I believe - but even they must possess something of the talent of a seer or an ability to read tea leaves. Needless to say when cash gets lost to lost causes in their endeavours they have the simple remedy of getting the central bank to print more to replace the lack, meanwhile third parties are playing pass the parcel with those lost causes not wishing to discover their contained toxicity.

Meanwhile us poor saps of pensioners and the like are expected to take it all in goodnatured humour and adjust to the reality.

Oh yes, I can feel the relief already..NOT. I doubt if a few smoke and mirrors, concocted figures will make any difference to most families. Petrol around my area has gone up this month, food is more expensive and my utility company haven't so far rushed to reduce my gas bill.

Its all a load of cock.

Anon 3, 'public sector is not a proper job'

Try telling that to the next squaddie you see home on leave from Afghanistan.

Or to any fireman, nurse, doctor or policeman.

1. The public sector is not cutback. Its the amount of proposed increase in expenditure that has been reduced ie pervoius increase in spending 6% now reduced to 4% equals 30% cutback. Simples.

2. As already stated annual inflation has not come down they just dont count last years increases anymore. It doesnt mean that its reduced as we are still paying it. Still as we all got a bonus and a cost of living pay rise it retains the status quo. Oh so you didnt get one either?

Jon

My thanks for your very clear explanation. I should have realised what it was about because I do appreciate the difference between the first and second differential with respect to time. I will use this argument if I get stopped for doing 50 MPH in a 30 MPH zone. Yes officer, I was doing 50 MPH but my acceleration has not incresed since I came into the restricted area at 50 so it does not count. I hope the policeman is sufficiently numerate to accept this.

Bob the electrician