Tuesday, 18 October 2011

Inflation numbers for September are scarey

Inflation numbers for September out today...

CPI: 5.2%, up from 4.9% in August
RPI: 5.6%, up from 5.4% in August

But that isn't the scarey bit. No, here's the scarey bit...

Gas and electricity prices are up 9.9% in a single month!

Of course the Bank of England expects inflation to fall back to the target 2% within two years. That said, two years ago they expected today's numbers to be on target.

Here's the fan chart the BoE issued two years ago...

...nicely annotated by FreeTrader at HPC. The big red arrow shows the actual number compared with the fan which shows their expectation.

As you can see, their forecasting is crap. The BoE basically talks a load of balls.

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