Cyclone Posted December 4, 2006 Share Posted December 4, 2006 If the CPI and RPI don't measure the cost of living then in what way can they be used to measure inflation of the economy as a whole? Link to comment Share on other sites More sharing options...
shoeshine Posted December 4, 2006 Author Share Posted December 4, 2006 If the CPI and RPI don't measure the cost of living then in what way can they be used to measure inflation of the economy as a whole? The answer is simple.....the Chancellor proudly quotes unreliable (false?) figures to hail his personal successes to Parliament, fixes his Budget to suit and gives the Prime Minister the opportunity of firing Spiv's figures at the Opposition every Wednesday at Prime Minister's Question Time in the House. Perhaps by skewing the figures to the advantage of any Government it conceals the true inflation rate from the view of those empowered to seek pay rises year on year for those people stuck on the daily treadmill of working to make ends meet, with the added benefit of screwing those on fixed incomes....pensioners, social benefits etc. Link to comment Share on other sites More sharing options...
nightrider Posted December 4, 2006 Share Posted December 4, 2006 This explains why mortage payments are excluded: http://en.wikipedia.org/wiki/Consumer_Price_Index#United_Kingdom Link to comment Share on other sites More sharing options...
nightrider Posted December 4, 2006 Share Posted December 4, 2006 The answer is simple.....the Chancellor proudly quotes unreliable (false?) figures to hail his personal successes to Parliament, fixes his Budget to suit and gives the Prime Minister the opportunity of firing Spiv's figures at the Opposition every Wednesday at Prime Minister's Question Time in the House. Perhaps by skewing the figures to the advantage of any Government it conceals the true inflation rate from the view of those empowered to seek pay rises year on year for those people stuck on the daily treadmill of working to make ends meet, with the added benefit of screwing those on fixed incomes....pensioners, social benefits etc. I might be wrong but I thought keeping pay rises low helps to curb inflation because if people cant afford the prices then they cant increase indefinitelty presumably (though for gas and electricity which seem to be driven by oil prices this cant be true). This might be why the goverment would not want workers knowing the true cost of living increase, so that will not demand for huge wage increases. Wasnt this basically what was happening in the late 70s? The unions wanted huge wage increases to reflect huge inflation and the goverment wanted low increases to try and stop the inflation increasing? Link to comment Share on other sites More sharing options...
Cyclone Posted December 4, 2006 Share Posted December 4, 2006 The supposed method of controlling inflation now is to alter interest rates. Lying shouldn't be (and will never be an effective) means of controlling it. Link to comment Share on other sites More sharing options...
Greybeard Posted December 4, 2006 Share Posted December 4, 2006 Perhaps by skewing the figures to the advantage of any Government it conceals the true inflation rate from the view of those empowered to seek pay rises year on year for those people stuck on the daily treadmill of working to make ends meet, with the added benefit of screwing those on fixed incomes....pensioners, social benefits etc. It does seem odd that there is no independent financial institution with the nerve to expose the farce of the CPI, you would think the public service unions and perhaps SAGA might jointly fund an annual research paper to give the lie to Gordon Brown's complacency. It's even odder that this report was commissioned bt the DT as it is bound to back-fire on the Tories at some stage if they use it as a stick to beat the govt. with. Link to comment Share on other sites More sharing options...
Greybeard Posted December 4, 2006 Share Posted December 4, 2006 The supposed method of controlling inflation now is to alter interest rates. Lying shouldn't be (and will never be an effective) means of controlling it. But the govt. now don't have direct control of interest rates, and with the state of the housing market the Bank of England will be very cautious about using it in a heavy handed manner. Lying about inflation and the true state of the economy seems to have been quite an effective policy for Gordon Brown's so far. Link to comment Share on other sites More sharing options...
Cyclone Posted December 4, 2006 Share Posted December 4, 2006 But the govt. now don't have direct control of interest rates, and with the state of the housing market the Bank of England will be very cautious about using it in a heavy handed manner. Lying about inflation and the true state of the economy seems to have been quite an effective policy for Gordon Brown's so far. That was deliberate, the BoE are supposed to be independant and act in the best interest of controlling inflation and keeping the economy healthy. Link to comment Share on other sites More sharing options...
Heyesey Posted December 4, 2006 Share Posted December 4, 2006 Do I hear David Cameron saying he's going to stop all this jiggery-pokery with the CPI/RPI and use the real cost of inflation in calculating pension increases etc ? What real cost? Would that be the minus 2.6% experienced by some people, or the 9% experienced by others? Or would it be an overall average, which is - hey, look! - exactly what we use now. Link to comment Share on other sites More sharing options...
nightrider Posted December 4, 2006 Share Posted December 4, 2006 What real cost? Would that be the minus 2.6% experienced by some people, or the 9% experienced by others? Or would it be an overall average, which is - hey, look! - exactly what we use now. The average we use now is not the average cost of living. It is the average CPI which the national office of statistics state are NOT the same quantity. Link to comment Share on other sites More sharing options...
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