Inflation Rates for different groups.
Discussion
Interesting article in Todays Telegraph.
Inflation has been concentrated on items that the middle class consume most.
The RPI has risen by 18.5% from 1997-2004.
Over the same period the cost of a nanny has risen by 77%, Private school fees by 49%, Council tax by 70%, Private health care by 49%.
Full artice see
www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/05/03/nelec103.xml
Inflation has been concentrated on items that the middle class consume most.
The RPI has risen by 18.5% from 1997-2004.
Over the same period the cost of a nanny has risen by 77%, Private school fees by 49%, Council tax by 70%, Private health care by 49%.
Full artice see
www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/05/03/nelec103.xml
It doesn't surprise me about Nannys - a couple of my friends are professional Nannies, they have spent a fair amount of time & effort getting approporiate qualifications & want that & the responsibility to be recognised. The figure is probably a bit low as it may not include perks such as food, board, holidays & exclusive use of a vehicle depending on the setup.
The nannies have made the most of an elastic market - like sparks, plumbers, builders etc which is understandable. The employers are willing to pay for people with the appropriate background.
Private education - I can imagine overheads have rocketed - liability insurance for example.
The nannies have made the most of an elastic market - like sparks, plumbers, builders etc which is understandable. The employers are willing to pay for people with the appropriate background.
Private education - I can imagine overheads have rocketed - liability insurance for example.
CPI measure is fashionable, but not as established as RPI ... err, OK. Might be worth pointing out that RPI may have been the "headline" figure as pored over by jounalists, but policy makers paid far more attention to RPIX which excluded housing costs ... precisley because the UK housing market is so odd. The CPI figures usually qoted with ref to the UK are calced on internationally established basis ... they are the figures used by Eurostat and the ECB to look at pan-European inflation. It really makes sod all difference which set of numbers you look at, the picture is pretty clear. Developed world inflation has been very low for the last 10 years, and the UK housing market has shot up. End of story. Sure, there are patches of high inflation in certain sectors, but equally there are patches of extreme deflation too. In aggregate inflation has been very low (worryingly low for most central bankers). In conclusion, shoot the sub who came up with the article's title and tell the consumer affair's editor to pull his finger out and write about something he understands (tiddlywinks, perhaps?).
ATG said:
In aggregate inflation has been very low (worryingly low for most central bankers). In conclusion, shoot the sub who came up with the article's title and tell the consumer affair's editor to pull his finger out and write about something he understands (tiddlywinks, perhaps?).
So you maintain that a middle class family has not faced a higher inflation rate than the headline rate for the whole economy.
bga said:
It doesn't surprise me about Nannys - a couple of my friends are professional Nannies, they have spent a fair amount of time & effort getting approporiate qualifications & want that & the responsibility to be recognised. The figure is probably a bit low as it may not include perks such as food, board, holidays & exclusive use of a vehicle depending on the setup.
Live in nannies have salaries substantially lower than dailys so if you are providing food, board and a car you pay a lower salary...
The £30K quoted is on the high side for a qualified daily...
JagLover said:That's right. Inflation is a measure of the devaluation of money. It only makes sense when you apply to aggregate economic activity.
In aggregate inflation has been very low (worryingly low for most central bankers). In conclusion, shoot the sub who came up with the article's title and tell the consumer affair's editor to pull his finger out and write about something he understands (tiddlywinks, perhaps?).
So you maintain that a middle class family has not faced a higher inflation rate than the headline rate for the whole economy.
ATG said:
So you maintain that a middle class family has not faced a higher inflation rate than the headline rate for the whole economy.
That's right. Inflation is a measure of the devaluation of money. It only makes sense when you apply to aggregate economic activity.
Ok I will rephrase it then.
Do you believe that certain groups in society , such as the middle classes, have not faced increases in their cost of living substantially greater than the inflation rate for the whole economy?.
That's better 
. Yes, they have, but they've also seen their salaries rise steeply. (It's been a surprise that labour market constraints haven't caused a wage/price spiral. What, no NAIRU?) The middle class have done very nicely thanks out of the last few years. Look at the level of high street spending, and people's confidence (albeit mis-placed confidence) with their credit cards.
The economic problem that this government has stored up for the UK is that middle England has been borrowing and spending like my g/f in a shoe shop; rather a different tack from the one that article suggests. The housing market is horribly overvalued and people are carrying a lot of debt. It is a dangerous position.
. Yes, they have, but they've also seen their salaries rise steeply. (It's been a surprise that labour market constraints haven't caused a wage/price spiral. What, no NAIRU?) The middle class have done very nicely thanks out of the last few years. Look at the level of high street spending, and people's confidence (albeit mis-placed confidence) with their credit cards. The economic problem that this government has stored up for the UK is that middle England has been borrowing and spending like my g/f in a shoe shop; rather a different tack from the one that article suggests. The housing market is horribly overvalued and people are carrying a lot of debt. It is a dangerous position.
JagLover said:
Or perhaps rather than doing very nicely the middle classes have to borrow increasing amounts of money to maintain what they regard as an acceptable standard of living.
I think it's more the case that the middle classes feel able to borrow money more freely because mortgage rates have remained so stable for so long. I don't think it's the case that people are having to borrow money to put food on the table
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