Tuesday, March 24, 2009

Maybe This Inflation Thing Wasn't Actually Quashed (UK CPI Up)

Anytime I can use the word "quash", I am a happy man. ForexPros details the surprise jump in the UK's CPI:

"The U.K. Consumer Price Index moved higher in February, to 3.2%, from 3.0% one month earlier. Even though the CPI declined at a record pace last month, this month the inflation gauge rose. In addition, the Core CPI, which excludes volatile items, rose to 1.6% from 1.3% last month. To some extent, the CPI number does not justify the BoE’s concern of “undershooting” the inflation target.

The largest upward pressure on the CPI annual rate came from food and non-alcoholic beverages. The effect was widespread but the largest individual factor was the price of vegetables, which rose by more than a year ago. The only large downward pressure on the CPI annual rate came from housing and household services.


  1. Jake, if you don't mind, can you add a little color to this data? Do you think its anomaly, or the beggining of a trend? I'm just not quite sure what to make of it, and none of the other sites I read have really commented on it. Love the site and appreciate your work.

  2. From the NY Times:

    The deepening recession in Britain provided no respite from inflation for consumers last month, as the weak pound pushed up prices for food and other imported goods.

    Economists had expected inflation to slow as commodity prices dropped and shops tried to attract consumers reluctant to spend because of concern about rising unemployment.

    Instead, consumer price inflation rose to 3.2 percent in February on an annualized basis, from 3 percent in January.