Is UK inflation becoming a worry?
Discussion
You will have noticed that for a long time, UK governments use the Consumer Price Index for their main inflation communications, although they still like the Retail Price Index for some taxes they receive.
You know why. Increase benefits and pensions using CPI, but for taxes received it is RPI.
The records that I keep remain RPI.
By monitoring the previous 6 months, then multiplying by 2, that can provide an indication of the immediate future trend.
In January 2025, the 6 months (x2) = 2.2%. - - - - - 12 months = 3.6%.
Subsequent 6 month figures have been;
Feb = 2.1%
Mar = 3.4%
Apr = 5.9%
May = 6.1%
Jun = 6.3%
In July 2025 .......the 6 months (x2) = 7.4%. - - - - - 12 months = 4.8%.
I wonder how long this inflation increase will continue?
It is my view that we have much more inflation (or money supply inflation) than is being reported. I’ve been banging on about this for a while. Almost to the point of being an internet bore. But I think it’s important so I’ll keep banging on.
Measuring inflation by looking at the price of a basket of goods from all over the world is not at all accurate unless you're just interested in the price of a basket of goods from all over the world.
I believe that goods have been going down in price up until the last few years. Our currency has been going down in value at a similar pace although it hasn’t really slowed as much as prices recently.
So therefore the reported inflation which measures the relative comparison between the price of a basket of goods from all over the world and our currency seemed stable up until recently because both were dropping in value at around the same rate.
Now that’s stopped.
Our currency is still dropping in value but prices are not so the relative comparison shows this disparity.
We have some control over the strength of our currency but have absolutely no control over worldwide prices.
I believe there is more going on but trying to keep this short. Primarily that debt is now losing value also. Our currency is basically debt. If debt loses value so too does our currency because it is debt.
Measuring inflation by looking at the price of a basket of goods from all over the world is not at all accurate unless you're just interested in the price of a basket of goods from all over the world.
I believe that goods have been going down in price up until the last few years. Our currency has been going down in value at a similar pace although it hasn’t really slowed as much as prices recently.
So therefore the reported inflation which measures the relative comparison between the price of a basket of goods from all over the world and our currency seemed stable up until recently because both were dropping in value at around the same rate.
Now that’s stopped.
Our currency is still dropping in value but prices are not so the relative comparison shows this disparity.
We have some control over the strength of our currency but have absolutely no control over worldwide prices.
I believe there is more going on but trying to keep this short. Primarily that debt is now losing value also. Our currency is basically debt. If debt loses value so too does our currency because it is debt.
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