Tuesday, 15 April 2014

Inflation is down

Good news, CPI inflation has fallen in March to 1.6%, down from 1.7% in February. This is well below the BoE's target of 2%.

Bad news, RPI inflation was 2.5% in March, admittedly down from 2.7% in February.

Other news, HPI (house price inflation) was 9.1% in March, up from 6.8% in February.

However since HPI is not a component of CPI it does not make the figures the government relies on look bad.

We will see the wages growth number tomorrow and plenty of people think that it will actually be higher than CPI, which would mean real wages are finally rising, which is a real prerequisite for the economy to grow.

Of course we still have our record national debt, our record personal debt, our record balance of trade deficit, our record low savings ratio and our record low base rates. But we shouldn't let all that detract from the good news.

Also, the only reason inflation is down is because sterling has gone up and made our imports cheaper.

1 comment:

Anonymous said...

So all good then - hah!