3% Inflation?

mjn

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All these price increases are starting to get a bit overwhelming...We keep a pretty tight watch on our household finances. However even though we have quite a bit spare each month and I am noticing the difference between income and expenditure getting smaller and smaller almost on a monthly basis. I dread to think how some people are coping because outgoings have increased noticably and dramatically over the last couple of years.
 
I'm sure you all know this anyway.

The trouble with these figures is that they include all manner of things including clothes and electrictrical goods. Trouble is the prices of luxary goods (e.g. plasma TV) is falling so contributing to negative inflation.

The real problem is the figures make no distinction between goods that the public have no choice but to buy (fuel, food, energy, insurance) which are all increasing and those that you could do without, TVs, MP3 players even clothes (in that most are non-essential purchases).

What really gets my goat is when the likes of British Gas and BP claim that they are only passing on the increases in wholesale price. If this were truely the case then yes the price would increase, but their profits would remain more or less the same. This obviously isn't the case.

Of course the government doesn't really care because they're are collecting VAT and other taxes on these spiralling costs.

Cheers
 
As above, flights abroad have come down over the years, so have digital cameras, MP3 players, computers, flat screen TVs, DVDs, DVD players, etc.

As well as the price drop the features list has also gone up.

You can't ignore these goods because people do buy them. I'm currently looking at getting a flat screen TV for the bedroom at around 20". How much would they have cost five years ago compared with now? What percentage drop would that be?

So I might moan that fuel costs a stupid amount right now, but if it wasn't for the price drops in electronic goods I wouldn't be buying a new TV.

The thing is people notice when things go up a lot more than things coming down. Bad things tend to stick in the mind. I bet people can always name who was the school bully.
 
As above, flights abroad have come down over the years, so have digital cameras, MP3 players, computers, flat screen TVs, DVDs, DVD players, etc.

As well as the price drop the features list has also gone up.

You can't ignore these goods because people do buy them. I'm currently looking at getting a flat screen TV for the bedroom at around 20". How much would they have cost five years ago compared with now? What percentage drop would that be?

So I might moan that fuel costs a stupid amount right now, but if it wasn't for the price drops in electronic goods I wouldn't be buying a new TV.

The thing is people notice when things go up a lot more than things coming down. Bad things tend to stick in the mind. I bet people can always name who was the school bully.


Yes but given that before you had the option of a flat screen TV you could buy a littl portable colour TV for a fraction of the prices of LCD/Plasma. The actual prices of a TV set has gone up massively. You can't actually buy a CRT 32" television anymore which would be the cheapest thing to do if you just wanted to watch TV so in comparison everything has gone up.
 
I believe inflation is worked out by looking at the cost of a suite of 1000s of household items. Yes ok some go up, some go down but I believe they should have a weighted average i.e. things we buy more often have a bigger impact upon the iflation figure.

But if they did the above the goverment rightly so would appear as they were making a pigs ear of things & in my view polititions dont like the truth... how many times have they answerer an answer with a simple yes/no!
 
As above, flights abroad have come down over the years, so have digital cameras, MP3 players, computers, flat screen TVs, DVDs, DVD players, etc.

As well as the price drop the features list has also gone up.

You can't ignore these goods because people do buy them. I'm currently looking at getting a flat screen TV for the bedroom at around 20". How much would they have cost five years ago compared with now? What percentage drop would that be?

So I might moan that fuel costs a stupid amount right now, but if it wasn't for the price drops in electronic goods I wouldn't be buying a new TV.

The thing is people notice when things go up a lot more than things coming down. Bad things tend to stick in the mind. I bet people can always name who was the school bully.


But how often do you buy a new flatscreen tv? How often do you buy food? how often do you pay your fuel bill?

One off items maybe reducing in price, but everyday items are going up at an alarming rate.
 
It's a complete joke - in line with "inflation", my wages went up 3%. Sadly, my energy bills went up from £23 a month to £71 a month - a tad more than 3% even with my poor GCSE in maths!
 
But how often do you buy a new flatscreen tv? How often do you buy food? how often do you pay your fuel bill?

One off items maybe reducing in price, but everyday items are going up at an alarming rate.
True but that's countered by the massive drops in price. A few years ago a flat screen TV would have been about £5k. Now a similar size would be under a grand. What percentage drop is that?

Things like bread etc tend to go up by a few pence.


Yes but given that before you had the option of a flat screen TV you could buy a littl portable colour TV for a fraction of the prices of LCD/Plasma. The actual prices of a TV set has gone up massively. You can't actually buy a CRT 32" television anymore which would be the cheapest thing to do if you just wanted to watch TV so in comparison everything has gone up.

JVC 28" CRT is still being advertised for £200-

http://www.argos.co.uk/static/Product/partNumber/5361672/Trail/searchtext>TV.htm

Or there's this (no Freeview for £170):
http://www.dixons.co.uk/martprd/product/085377?int=rhpromo-jvctv


My LG 28" CRT with Freeview I bought for around £500 a few years ago.
 
But how often do you buy a new flatscreen tv? How often do you buy food? how often do you pay your fuel bill?

One off items maybe reducing in price, but everyday items are going up at an alarming rate.
It's why the inflation figure is 'wrong' for you. It doesn't mean I agree with it but it skews the figures. When things go up I remind myself of other things that I've bought that have come down.

As this is an AVForum I'd be suprised if people here weren't buying these goods.

What was the last AV kit you bought?

For me one of the things was a PS3 last year. Launched at £425 I bought it when the price dropped to £350 with two games and two films a few months later.

Of course this Government could drop the fuel price tomorrow. They won't as they are currently getting a big windfall from it.
 
I do recall a time when the package of items used to calculate the inflation rate was rigorously controlled to reflect real day to day expenditure and was often amended to keep it real in the face of social changes and changes in patterns of spending.

There was some political interference pre 1997 but it was of little consequence because both inflation and interest rates were low as a result of the Asian economic 'miracle'.

From 1997 onwards there was a politically motivated determination to deceive which has led us to the present position.

Had the inflation figures been accurate the Bank of England would have made different interest rate decisions which would have largely defused the credit boom.

Those in charge of the economy fooled themselves as well as the electorate.
The evidence was always available if one read between the lines and paid attention to daily economic life but it became unfashionable to do that.

Utter incompetence and probably fraud which was aided and abetted by a gullible electorate.

Over the past 500 years there has never been such an irresponsible attitude to finance in government. We used to be able to trust politicians to be honest with the big issues even if they fiddle about over smaller issues.The independent civil service helped even the thickest politicians to avoid causing too much damage. The level of general knowledge and education in the government and the (now politically corrupted) civil service has become pitiful in only 11 years.

Be careful what you vote for lest you get what you thought you wanted.
 
Yes But I think you are missing the point..

A TV is not a necessity by any means - you dont have to buy it , where as you do need to purchase food (bread etc) and pay for utliities on a regualr basis albeit they have only gone up as you say a few pence.

The TV will be a one off purchase and last maybe 5+ years , bread etc are every day items.

I think they have gone up more than a few pence too !!

My Gas bills are more now than during the winter (when I used it for Heating and Water) and i'm only using it to heat water due to the weather.

My bills have gone up recently from £40 to £70 and I'm using much less than I was.




True but that's countered by the massive drops in price. A few years ago a flat screen TV would have been about £5k. Now a similar size would be under a grand. What percentage drop is that?

Things like bread etc tend to go up by a few pence.




JVC 28" CRT is still being advertised for £200-

http://www.argos.co.uk/static/Product/partNumber/5361672/Trail/searchtext>TV.htm

Or there's this (no Freeview for £170):
http://www.dixons.co.uk/martprd/product/085377?int=rhpromo-jvctv


My LG 28" CRT with Freeview I bought for around £500 a few years ago.
 
Yes But I think you are missing the point..
I'm not agreeing with the system it's why it is as it is. Ultimately you know whether you are better off now than you were.

For instance in a budget when fags go up again it has no importance to me as I don't smoke. For someone else it might be a major thing.

If electronic goods are important to you and you have to have the latest ipod etc then it might be relevant.

http://www.statistics.gov.uk/pdfdir/cpi0508.pdf

Page 2.

Details what has gone up and down.

Transports costs by air has fallen. Clothing and footwear has also fallen.

House prices have also come down marginally. Great if you are buying, bad if you are selling.

http://www.statistics.gov.uk/articles/nojournal/cpi_basket_article_2008.pdf

The whole thing is based on a shopping basket:

http://www.statistics.gov.uk/articles/nojournal/cpi_basket_article_2008.pdf

As it's impossible to track the price of absolutely everything being sold.

More here:

http://news.bbc.co.uk/1/hi/business/4369567.stm
 
I think everyone's noticing how expensive day to day stuff is costing.

Now I'm normally a sceptic about so called money saving websites, always looking for the "con" in it.

Just out of boredom I caught Martin Lewis TV show on Channel 5 a couple of months back and I have to say hats of to the guy

http://www.moneysavingexpert.com/
http://www.itpaystowatch.co.uk/

We like many family's with no time just carried on doing the same old thing year in year out, we have fallen foul to the supermarket traps, not checked insurances or credit card deals etc etc

Just following his guides etc we are going to save a mind blowing £8,458 pounds this year :eek: I was gob smacked when I just worked this out a second ago.

:thumbsup:
 
@Sonic67

The point is, that you and I are lucky enough to be able to buy luxary goods. So yes, if you look at our inflation it probably is 3%.

I too only got a 3% pay rise but again I count myself lucky as I'm on a decent salary and my 3% is probably bigger than my absolute increase in spending - so I make a little gain.

But for those on small salaries their 3% doesn't cover the increased cost in fuel bills, food, council tax, petrol etc - their disposable income is reducing. And yes the price of that shiny 50" plasma has halfed but for these people it's further away than ever.

I agree there are many different measures of inflation but in my opinion there should be one that is based on the essentials\staples of life.

Cheers,

Nigel
 
I do recall a time when the package of items used to calculate the inflation rate was rigorously controlled to reflect real day to day expenditure and was often amended to keep it real in the face of social changes and changes in patterns of spending.

There was some political interference pre 1997 but it was of little consequence because both inflation and interest rates were low as a result of the Asian economic 'miracle'.

From 1997 onwards there was a politically motivated determination to deceive which has led us to the present position.

Had the inflation figures been accurate the Bank of England would have made different interest rate decisions which would have largely defused the credit boom.

Those in charge of the economy fooled themselves as well as the electorate.
The evidence was always available if one read between the lines and paid attention to daily economic life but it became unfashionable to do that.

Utter incompetence and probably fraud which was aided and abetted by a gullible electorate.

Over the past 500 years there has never been such an irresponsible attitude to finance in government. We used to be able to trust politicians to be honest with the big issues even if they fiddle about over smaller issues.The independent civil service helped even the thickest politicians to avoid causing too much damage. The level of general knowledge and education in the government and the (now politically corrupted) civil service has become pitiful in only 11 years.

Be careful what you vote for lest you get what you thought you wanted.

Were any of the above true, surely there would be a respected independent body people could turn to who compile what the sceptics would agree is a more representative "basket".

Instead of unsubstantiated moaning.
 
But how often do you buy a new flatscreen tv? How often do you buy food? how often do you pay your fuel bill?

One off items maybe reducing in price, but everyday items are going up at an alarming rate.

But if a £1 tin of food goes up 10% it'll only cost you 10p each time you buy one. Twice a week makes you 20p a week worse off.

If flatscreen TVs fall from £1,000 to £500 you've saved £500. Buy a new one every 5 years and you're £2 a week better off.

Many people buy a car every 2 years, and the prices of those have dropped in real terms over the past few years.

You don't buy big items very often, but many peoplebuy one or two biggies every year.

Then there are other things that are falling in price. Could you have bought a DVD from Sainsbury's for £3 five years ago? Or a DVD player for £30? Books, newspapers, household cleaners?

Ultimately, many people use inflation as an indicator - how much is it compared to last year, or to thelast government?

However inaccurate the figures are now, you can be sure they were equally inaccurate last year, and equally inaccurate a decade ago.

Steve W
 
But if a £1 tin of food goes up 10% it'll only cost you 10p each time you buy one. Twice a week makes you 20p a week worse off.

If flatscreen TVs fall from £1,000 to £500 you've saved £500. Buy a new one every 5 years and you're £2 a week better off.

Many people buy a car every 2 years, and the prices of those have dropped in real terms over the past few years.

You don't buy big items very often, but many peoplebuy one or two biggies every year.

Then there are other things that are falling in price. Could you have bought a DVD from Sainsbury's for £3 five years ago? Or a DVD player for £30? Books, newspapers, household cleaners?

Steve W

You cannot survive on one tin of food per week. You buy 50 items of food per week, and each one goes up by 10p, then you're £5 per week worse off, which is closer to what has recently happened.
 
Were any of the above true, surely there would be a respected independent body people could turn to who compile what the sceptics would agree is a more representative "basket".
Our local radio station has been doing that - Radio WM. It's incredibly dull. I'm sure someone thought it would be a great idea but...

I was driving to work the other day and the topic was that the bread had gone up but one of the tins they'd bought last week had gone down.

I had a feeling that if a light bulb blew in the studio right now they'd be still talking about it half an hour later.
 
You cannot survive on one tin of food per week. You buy 50 items of food per week, and each one goes up by 10p, then you're £5 per week worse off, which is closer to what has recently happened.

Suppose you bought a laptop during those five years? A camera, an MP3 player? It still evens out unless you live in a bedsit with no electronic goods at all.

Besides it turns out that clothing and shoes have come down as well. Flights have certainly come down over the years.
 

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