The latest data is out from the ONS so lets take a look at what it is telling us.
Here is the Sky calculator:
Here is the ONS data:
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Title: We Can’t Trust The Inflation Numbers
Introduction:
Inflation is the sustained increase in prices of goods and services over time, eroding the purchasing power of money. It is a key economic indicator that affects individuals, businesses, and governments alike. However, the accuracy and reliability of inflation numbers generated by official statistics agencies have come under scrutiny. This article explores the reasons why we can’t trust the inflation numbers and the potential consequences of such unreliable data.
1. Manipulation for Political Purposes:
One of the reasons why we can’t trust inflation numbers is the susceptibility of government agencies to manipulate them for political gains. In order to project a positive image or downplay economic challenges, governments may resort to underreporting inflation figures. This creates a distorted perception of the actual inflationary pressures faced by the common people.
2. Flawed Methodologies:
Another contributing factor to the lack of trust is the flawed methodologies used to calculate inflation rates. These methodologies often fail to account for important factors such as changes in the quality of goods and services over time. For example, the introduction of innovative technological advancements may justify higher prices, but may not always be factored into the calculations, resulting in lower reported inflation levels.
3. Exclusion of Essential Goods and Services:
Official inflation numbers can also be misleading as they often exclude essential goods and services that significantly impact people’s daily lives, such as housing, healthcare, and education. By leaving out these items, the reported inflation rates underestimate the true cost of living, leading to a skewed understanding of the real economic conditions faced by the public.
4. Price Manipulation:
Price manipulation by powerful market players can further distort official inflation numbers. Collusive practices, monopolies, or excessive market power of certain sectors can artificially inflate or suppress prices, making it difficult to derive accurate inflation figures. This lack of transparency erodes trust in the official data, undermining the ability of policymakers to make informed decisions.
5. Inflation Expectations:
Reliable inflation figures are crucial to shaping inflation expectations for businesses, financial markets, and consumers. When the published numbers don’t reflect the actual state of inflation, these expectations can be severely distorted. Businesses may misallocate resources, investors may make uninformed decisions, and consumers may struggle to plan for the future, resulting in economic instability.
Consequences of Unreliable Inflation Data:
The consequences of mistrust in inflation numbers can be far-reaching. It erodes public confidence in the government’s ability to manage economic affairs effectively. This can lead to social unrest, decreased consumer spending, reduced investment, and even currency devaluation. Without accurate inflation figures, policymakers struggle to implement appropriate measures to combat rising prices, potentially exacerbating economic inequalities.
Conclusion:
Inflation is a critically important economic measure, affecting the daily lives of individuals and the stability of nations. However, the trust in official inflation statistics has been eroding due to potential manipulation, flawed methodologies, exclusions, and price distortions. This lack of reliability has significant implications for businesses, financial markets, governments, and individuals. It is essential to address these issues and promote transparency and accountability in order to restore trust and shape effective economic policies that accurately reflect the realities faced by people.
Someone has to pay for all these wars popping up like mushrooms. Many more will pop up as the climate crisis deepens.
Any time wages go up I'm fairly sure it gives companies the excuse to increase prices by an even higher number and then blame wage costs.
Its simple. The real inflation number is probably 70%. Are you asking why? Well because eggs, milk, petrol etc things that are ESSENTIAL has gone up in price by 2x at worse and 50% at best, compared to pre pandemic.
So everyone is struggling, for reference I'm from London, the average wage of £30-40k is probably below what should be minimum wage, or rather living wage.
And what do Tories do? throw billions at ukraine to fill their pockets.
Buying a house is impossible even if two people save for a decade, because the living expenses are so high, in some situations it could be cheaper to drive than take the train
Well done good vid. Utter bullshite its stuck at 6.7, they just want excuse to keep rates higher for longer. Keep going with the channel.
of course you cant, any one been food shopping lately
I'm so lucky, thanks to my personal circumstances I've barely felt all of the inflation. The worst was obviously energy bills last year.
As long as the west continues entering every international conflict and engaging in their sanctions diplomacy, the people of the world are going to have to accept the never-ending drop in their standards of living. Sanction diplomacy is currently the biggest threat to globalisation.
When Labour spend all that cash inflation will decrease obviously
Still baffles me how inflation figures are so low but some commodities have gone up over 100%. Nearly 10 quid for a jar of coffee nowadays, was like 5 quid just a few years ago. Mens deodorant was a quid, now 2-3+ quid
And no tax deflation. 50k are like 40k now, but you still in the higher tax band.
For a normal person who drives to work I reckon inflation has been at 40%+ over the last 2 years. Good job we've got our 4% payrise in the NHS to counteract this 40% inflation
I’m voting for Reform uk . They probably won’t get in but after Labour have completed their term of destruction they might have a chance in the next election.
With a rate decision coming off fresh inflation data that showed an uptick in prices, yet my portfolio keeps dwindling. How do I take advantage of the market to save my declining portfolio of 560K
What almost everyone is missing here and the most important is the economy is being destroyed deliberately from within. There is a even more draconian digital economy ready to roll out but the elite are just finding the right time.
Once you understand its all by design it all makes sense
I worked out my rate of inflation myself based on what I spend on. 34% and honestly it feels higher than that
You can’t feel sorry for the BOE not doing the job properly. They get paid to keep inflation at bay. They were too slow to raise rates and our government is incompetent.
Sad state for the country.
Otherwise – good clean review.
One major factor was left out is that we are seeing global inflation. I saw it in the news that most countries are all competing for parts , products food etc. Even nations that managed their rates better are seeing major issues. The glut of money was an issue sure, but the surging demand from nation that re-opened from covid lockdowns played a larger role. Add to this pandemic-related staffing issues and the intentional global oil supply problems and its a nightmare. I known the intention was to explain inflation but that doesn't do justice to the current inflation on a global scale.