1.7% Inflation now? Really?

[TOPGUN749]

How many of us believe the inflation figures we are told? If it were true the council tax next April should rise by 1.7% and I’m thinking in terms of 5-10% once again. We also have an inflationary budget in 2 weeks with fuel duties up to name just one!

[benbobailey]

29 minutes ago, TOPGUN749 said:

How many of us believe the inflation figures we are told? If it were true the council tax next April should rise by 1.7% and I’m thinking in terms of 5-10% once again. We also have an inflationary budget in 2 weeks with fuel duties up to name just one!

It appears that you don't understand what the CPI figure represents and how it is arrived at.

    There are a selection of goods and services that are always used for the figure. Fuel, flight prices , household goods, some foods, shopping etc etc.

    The average rise is used as the figure.  For example, petrol has decreased by 15% and whilst other goods services may be higher, the average is 1.7.

    Why wouldn't you believe the published figure, which I am sure is analysed, scrutinised and thoroughly studied by all concerned bodies. 

Regards 

     

[rbrowning2]

however they remove items from the inflation basket over the years to make the figure look better like mortgages were removed. Did they not do this by moving to CPI 1.7%  from RPI 2.7% for calculating pensions and benefits?

Edited October 16 by rbrowning2

[benbobailey]

15 minutes ago, rbrowning2 said:

however they remove items from the inflation basket over the years to make the figure look better like mortgages were removed. Did they not do this by moving to CPI 1.7%  from RPI 2.7% for calculating pensions and benefits?

The items used for calculation may well change periodically. However with the example you have given ( mortgages) the CPI figure would be a lot less than 1.7 if they were still included, since the mortgage rate has dropped considerably this last year. 

   Regardless, there are more households without a mortgage than with one.

 I don't know the list of items used, but I'm sure Google will provide a comprehensive answer if anyone is interested.

 It doesn't bother me as I cannot change anything or make it different so I don't waste time worrying about it . I have no beef either way.

  I joined this thread with the sole purpose of trying to explain how the figure is arrived at, and clarify it's not a made up or mystery figure.

 

Regards 

Edited October 16 by benbobailey

[TOPGUN749]

50 minutes ago, benbobailey said:

It appears that you don't understand what the CPI figure represents and how it is arrived at.

    There are a selection of goods and services that are always used for the figure. Fuel, flight prices , household goods, some foods, shopping etc etc.

    The average rise is used as the figure.  For example, petrol has decreased by 15% and whilst other goods services may be higher, the average is 1.7.

    Why wouldn't you believe the published figure, which I am sure is analysed, scrutinised and thoroughly studied by all concerned bodies. 

Regards 

     

Well one believes it I see! Most things I have to pay for are up way above 1.7%. My car insurance is up 25% ,nome insurance 110%,car tax 10%,and I can’t imagine much except petrol down,and that will rise after the budget. In arriving at this figure they obviously pick and choose what they include to get as low a figure as possible. Things are not so rosy in reality..

[JohnfromUK]

1.7% is the year to September.

Now - it may be coincidence, but the September figure is the one (of the 12 months of the year) used in determining the rise in benefits, pensions etc. that will be introduced in the following April.  So 1.7% inflation now means the rise in benefits next April will be 1.7%.

In fact pensions are (unless they change that as well) protected by the 'triple lock' so will be the highest of Inflation, average wages increases or 2.5%.

The cynic in me suggests that September may be artificially 'massaged down' for that reason.  Also - any credit is really down to the Tories as myuuch as Labour since it is a 12 month period and the Tories were in power for moire than half of that.

[McSpredder]

1 hour ago, benbobailey said:

Why wouldn't you believe the published figure, which I am sure is analysed, scrutinised and thoroughly studied by all concerned bodies.      

"It is one of the happiest characteristics of this glorious country that official utterances are invariably regarded as unanswerable"   (HMS Pinafore)

[Yellow Bear]

33 minutes ago, JohnfromUK said:

1.7% is the year to September.

Now - it may be coincidence, but the September figure is the one (of the 12 months of the year) used in determining the rise in benefits, pensions etc. that will be introduced in the following April.  So 1.7% inflation now means the rise in benefits next April will be 1.7%.

In fact pensions are (unless they change that as well) protected by the 'triple lock' so will be the highest of Inflation, average wages increases or 2.5%.

The cynic in me suggests that September may be artificially 'massaged down' for that reason.  Also - any credit is really down to the Tories as myuuch as Labour since it is a 12 month period and the Tories were in power for moire than half of that.

This    "equally cynical".   Shame they cannot use the same figure for public services employees, specifically the civil service

[Vince Green]

The figure covers a year when the conservatives were still in power. Let's take bets on what it will be like this time next year

[Weihrauch17]

45 minutes ago, JohnfromUK said:

1.7% is the year to September.

Now - it may be coincidence, but the September figure is the one (of the 12 months of the year) used in determining the rise in benefits, pensions etc. that will be introduced in the following April.  So 1.7% inflation now means the rise in benefits next April will be 1.7%.

In fact pensions are (unless they change that as well) protected by the 'triple lock' so will be the highest of Inflation, average wages increases or 2.5%.

The cynic in me suggests that September may be artificially 'massaged down' for that reason.  Also - any credit is really down to the Tories as myuuch as Labour since it is a 12 month period and the Tories were in power for moire than half of that.

Yep Labour have been doing their best to get it rising with their ridiculous pay rises, meanwhile I see the Railways are going on strike again!

[old man]

Well, everything has gone through the roof here except unleaded which I suspect has been forced down so that when the budget hits the chickens can crow about something?

[Weihrauch17]

47 minutes ago, old man said:

Well, everything has gone through the roof here except unleaded which I suspect has been forced down so that when the budget hits the chickens can crow about something?

Don't worry Reeves will slap an additional 10 p a litre tax on no problem.

[JohnfromUK]

1 hour ago, Weihrauch17 said:

Don't worry Reeves will slap an additional 10 p a litre tax on no problem.

I suspect those who drive petrol and diesel 4 x 4s (includes me!) etc. will pay more annual excise duty (old road fund license).

[oowee]

8 hours ago, TOPGUN749 said:

How many of us believe the inflation figures we are told? If it were true the council tax next April should rise by 1.7% and I’m thinking in terms of 5-10% once again. We also have an inflationary budget in 2 weeks with fuel duties up to name just one!

Council tax i restricted to a max increase of 5%. There are so many specialists analysing these figures that it's probably one of the most reliable statistics out there. 

 

[welsh1]

4 minutes ago, oowee said:

Council tax i restricted to a max increase of 5%. There are so many specialists analysing these figures that it's probably one of the most reliable statistics out there. 

 

Depends where in the UK you live, my council tax rise was 12.5% this April.

[oowee]

2 minutes ago, welsh1 said:

Depends where in the UK you live, my council tax rise was 12.5% this April.

Sorry your right of course. In England the max increase is limited to 5% 😁

[JohnfromUK]

6 hours ago, oowee said:

In England the max increase is limited to 5%

Which is another thing that it is rumoured may be changed by the present Gov't. 

[Vince Green]

1 hour ago, JohnfromUK said:

Which is another thing that it is rumoured may be changed by the present Gov't. 

What about the removal of the single occupant discount? That's a stealth increase.

[TOPGUN749]

9 hours ago, oowee said:

Council tax i restricted to a max increase of 5%. There are so many specialists analysing these figures that it's probably one of the most reliable statistics out there. 

 

I believe my council tax went up 8% this year to £1780 for a band B house worth only about £135k. Must the the highest tax to value ratio in the UK!

[TOPGUN749]

9 hours ago, welsh1 said:

Depends where in the UK you live, my council tax rise was 12.5% this April.

How’s that for 1.7% inflation claim?🤣

[rbrowning2]

RPI is always higher than CPI the current RPI is 2.7% which is why big companies did a crafty over the years gone by and moved away from RPI for pay and pension increases to CPI.

In September 2024, the Retail Price Index (RPI) inflation rate in the United Kingdom was 2.7%, down from 3.5% the previous month. The RPI is a key measure of inflation that tracks the price changes of goods and services in the UK economy

 

[TOPGUN749]

27 minutes ago, Vince Green said:

What about the removal of the single occupant discount? That's a stealth increase.

That’s a rumour that I wouldn’t put past this government which would add 33.3% to the bill, taking an extra £470 a year.

[JohnfromUK]

30 minutes ago, Vince Green said:

What about the removal of the single occupant discount? That's a stealth increase.

That to, though as far as I know that is still at rumour stage.  The Gov't are chuckling away at all the rumours because if you make the 'expectation' of bad news very high, the reality may seem less bad when it comes.  As always with 'rumour', it will grow unless a definitive answer is given by someone in authority - and uncertainty will grow with it.  Uncertainty is bad for people, business and growth (which the Gov't says it wants to encourage, but in fostering uncertainty, hinting of raising taxes on employment, hinting at raising taxes on invertors is all raising uncertainty with will dampen any growth.

[oowee]

5 minutes ago, rbrowning2 said:

RPI is always higher than CPI the current RPI is 2.7% which is why big companies did a crafty over the years gone by and moved away from RPI for pay and pension increases to CPI.

In September 2024, the Retail Price Index (RPI) inflation rate in the United Kingdom was 2.7%, down from 3.5% the previous month. The RPI is a key measure of inflation that tracks the price changes of goods and services in the UK economy

 

True but RPI is not recognised as a statistically reliable measure (interest rate effect disproportionate) hence the use of CPI. 

A more accurate measure that includes housing costs being CPIH which has a rental equivalence measure rather than interest rates. 

Final salary pension uses RPI, govt pension and state pension CPI.

41 minutes ago, TOPGUN749 said:

I believe my council tax went up 8% this year to £1780 for a band B house worth only about £135k. Must the the highest tax to value ratio in the UK!

That's very high. There is something called referendum principles where councils in England are required to hold a referendum if they want to increase tax above 5%. There were a few exceptions (Birmingham probably) where exceptions (?) were brought in I think to stave off bankruptcy. Either way CPI does not include it.