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Inflation down the Government says. No it’s up.

This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

The Office of National Statistics have reported that inflation fell to 2% in December 2013. That’s the Government’s target for inflation even though it has not met it for some years. Mr Cameron said it was “welcome news”.

Before we all rejoice, unfortunately that is based on only one measure of inflation – the Consumer Price Index (CPI). On the more widely used Retail Price Index (RPI) inflation was actually up from 2.6% to 2.7%. In reality the RPI is probably more relevant to private investors in terms of the basket of items they purchase. But the CPI is of course the Government’s preferred measure of inflation because it regularly gives a lower figure for inflation than RPI.

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