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Tuesday, 21 April 2009

How bad is it Doctor? part 94.

This is a graph of 12 month changes in RPI simce 1991 (remember the last recession?).

Inflation is down, surely that is a good thing?

You mean like low blood pressure is "good thing"? I am not a doctor but to me if that graph is a heartbeat monitor then the patient just died.


Demetrius said...

The figures may show deflation. But the figures are not to be trusted. The present indexes were constructed to undercut the real inflation rate on the assumption that it would never go below zero. With time and the gyrations of recent prices, it has happened. But for many of us the prices we pay are still going up more than incomes. OK, so they say cuts in energy prices, but wow did they shoot up in the time before, modified by cheap Chinese imports of consumer goods that many of us do not consume. They have eased a bit but they are still way up on four or five years ago. The indexes are not reliable and never will be, they are a posh form of spin.

zeno said...

Not quite dead. The electrodes have been applied and 10,000 volts have shot through the body. Expect that graph to turn and start rising and rising.

Tom H said...

Inflation is akin to a fever, not blood pressure.