11:18 AM, 22nd June 2022, About 3 years ago 3
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The latest inflation figures released today by the Office of National Statistics indicate the Consumer Prices Index (CPI) rose by 9.1% in the 12 months to May 2022, up from 9.0% in April and monthly CPI increased by 0.7% in May 2022, compared with a rise of 0.6% in May 2021.
Fortunately compared to the Fed the Bank of England seem to be more cautious about raising interest rates, but with no unwinding of cost and supply-based inflationary pressures yet we are likely to see a rise in the Bank Base Rate by the MPC next month. Let’s just hope the Doves win out again with only a 0.25% increase.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) increased by 7.9% in the 12 months to May 2022, up from 7.8% in April. This is the highest recorded 12-month inflation rate since the figures started being recorded in Jan 2006. This inflationary indicator was last estimated to be higher in April 1991 at 8.0%.
Owner occupiers’ housing costs account for around 17% of the CPIH and is the main driver of differences between the CPIH and CPI inflation rates. The inclusion of Council Tax and rates in CPIH is a further difference in calculations. The ONS consider CPIH their most comprehensive measure of inflation.
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Member Since November 2017 - Comments: 251
12:17 PM, 22nd June 2022, About 3 years ago
I’m not an economist, but I fear that the actions being taken will not produce the intended result. Back in the 80’s when we had mortgage rates nudging 14%, Maggie was dealing with an overactive economy by drying up the excess cash that was fueling it with interest rate rises. It was painful but worked.
This time round, after 2 years of covid, 80% incomes, layoffs etc we are not, in the main, swimming in a sea of spare cash. Apart from the after effects of the lunacy of ‘quantitative easing’, (didn’t we learn anything from Germany in the 1920’s), the drivers are external, Oil, Gas, Energy and soon very much Grain etc, How removing cash from the active economy is supposed to address those issues I for one don’t understand. What it will do is absorb desperately needed cash from those on the breadline and drive many to the wall and into the arms of charity or god forbid quick loan specialists.
For the most part that’s our tennant base.
The projections that all will be back to normal within 2 years I suspect are going to prove woefully optimistic. I hope I’m wrong…..
northern landlord
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14:25 PM, 22nd June 2022, About 3 years ago
Of course the Government play games with inflation figures to present them in the best possible light. CPI is based on the average price rise on a theoretical basket of items as shown in the graphic. (which also implies inflation is levelling off). Trouble is they add and delete the items so they can decide to replace one item that is rising in price with another that is not. The ONS website says “in 2022, 19 items have been added to the Consumer Prices Index including owner occupiers’ housing costs (CPIH) basket and 15 items have been removed. Additions to the baskets for 2022 include meat-free sausages, canned pulses, sports bras, pet collars and antibacterial surface wipes. Removals from the baskets include doughnuts, men’s suits and coal”. So the whole thing is a moving target. Notice that petrol, gas and electric costs are not directly accounted for.
The true inflation that we are at the sharp end of is much more than the 9.1% that is being stated and I am sure the rise will continue. The Recession is coming.
Rennie
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17:39 PM, 22nd June 2022, About 3 years ago
I would say we are at about 17%