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Tuesday, 12th August 2008

4.4 percent doesn't cover it

Peter Hoskin 11:59am

So the latest figures have annual CPI inflation - the Government's official measure - at 4.4 percent.  It's the highest figure since records began in 1997.  And, at 0.6 percent higher than last month's figure, the biggest monthly change as well.  The Government target of 2 percent has been well-and-truly smashed.

But despite these grim records, it still signficantly undercuts the levels of inflation that the public will be facing.  The RPI figure for inflation - which includes mortgage repayments - is higher, at 5 percent (for more details on this, see Fraser's briefing on Brownie No1: Inflation).  But even that fails to capture the above-inflation rises in water bills, and energy price rises of 35 percent.  And there's more: the website Mysupermarket.co.uk today reveals that the average family has seen their spending on groceries rise by 27 percent over the past year.

Of course, it's always going to be difficult for a government to remain popular when voters are feeling the fiscal squeeze.  But Brown & Co. certainly aren't helping themselves by pushing an "official line" which departs so drastically from everyday experience.

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Anan

August 12th, 2008 12:43pm Report this comment

"4.4 percent doesn't cover it" Damn straight!

Michael Hargrave

August 12th, 2008 1:08pm Report this comment

What is more surprising is that the CPI and RPI seem to be converging, perhaps because of the housing slowdown and scarcity of new mortgages.

David

August 12th, 2008 1:17pm Report this comment

Nothing to worry about, Peter. Brown is getting on with the job...

Burton

August 12th, 2008 1:25pm Report this comment

Stability and Prudence, remember them?

We're on the verge of a recession and yet economists are talking of rate rises. The government budget deficit looks bad, the Pound is devaluing almost as fast as Brown's reputation.

Indeed Brown's economic legacy looks more and more toxic every day. He is being exposed as one of the worst Chancellors ever, and one of the most ineffective Prime Ministers too.

If there are global problems, it's as if Britain is trying to sail these rough seas with a cracked mast, a seized engine and a broken rudder. And Captain Brown has been sabotaging the ship.

GS London

August 12th, 2008 1:26pm Report this comment

The idea of calling "inflation" the measure of how the cost of clothes and toys etc change per unit time is daft (RPI). By far the most money spent in any household is either on rent, mortgage or utility bills. To exclude these from any measure of inflation is truly naive: these bills define how much one can spend on things within the normal RPI.

TrevorH

August 12th, 2008 1:56pm Report this comment

He feels our pain ... all hail The Great Leader

Ray

August 12th, 2008 2:09pm Report this comment

"An "official line" which departs so drastically from everyday experience".

Those ten little words could almost be an epitaph for the whole New Labour project(crime, the NHS, weapons-of-mass-destruction, education, loss of sovereignty, immigration, etc, etc, etc).

Helen

August 12th, 2008 2:12pm Report this comment

I saw a story today that families with children will get £150 this winter as a one-off (ie bribe) and people like me desperately trying to save to start a family while Gordon Brown makes that an ever-decreasing possibility by filching my taxes for his trashy social engineering programmes? We can go hang.

Thanks, Gordon.

John

August 12th, 2008 2:33pm Report this comment

Not to worry, Helen: tractor production is up again this quarter under the wise guidance and vision of the Great Leader.

Alex

August 12th, 2008 2:54pm Report this comment

There's nothing to worry about.

1) Brown "understands" us;
2) Brown "feels the hurt (we) feel";
3) Brown is "getting on with the job";
4) Labour "understand and (Labour)hear people's concerns;
5) Labour is "on the side of the people of Britain".
6) Brown is "the right man for the job"

are there any I have missed?

Tankus

August 12th, 2008 4:16pm Report this comment

Gordons destruction of the British economy must be deliberate ....It is too thorough , vindictive and well planed to be a series of incompetent mistakes ....

Who does he really work for and who does he owe his allegiance too ?

Keith

August 12th, 2008 4:21pm Report this comment

There's nothing to worry about.

1) Brown "understands" us;
2) Brown "feels the hurt (we) feel";
3) Brown is "getting on with the job";
4) Labour "understand and (Labour)hear people's concerns;
5) Labour is "on the side of the people of Britain".
6) Brown is "the right man for the job"

are there any I have missed?

Oooooh yes, but the Mod might ban me if I started.
I dunno about you lot but it feels more like 15% inflation to me...or even higher.

John

August 12th, 2008 5:13pm Report this comment

Maybe, Tankus. I still think that he is basically an extremely stupid and ignorant man, only slightly more polished than that other stupid yob Prescott. Why the voters of this country put such cavemen in office is quite beyond me.

Daniel

August 12th, 2008 6:01pm Report this comment

My Sky bill has gone up from £40 to £50 in a month, a 25% increase.

Petrol went from just under 90p a litre to £1.20 per litre - so around or above 30%.

Council tax was (i think) 12%.

Fuel bills have been going up steadily, but a British Gas have hiked 35% in one go.

So what prices are being measured?

mitch

August 12th, 2008 6:05pm Report this comment

take a look at what CPI includes its no wonder no one believes it you would almost think it was designed to conceal the real figures.

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