Guido is SO confused on this one. Because he seems not to understand how annual inflation figures are created, he presents the first fall in the index as proof that INFLATION is settling in. Proving my prediction in a post a few weeks back:
So what figures have come out? Here is a graph of the CPI index:
CPIY inflation has fallen from 2.7% to 1.9% in this month.
So Guido the Innumerate screams Inflation!! and his trolls all say Aye Aye sir. As the price index drops.
UPDATE: Hooray! I knew the Telegraph still has what it takes. Jeremy Warner calls ‘There’s not much sign of deflation in these latest numbers’. Um, how about the tax adjusted price being 2 points lower in January? BUT I also ought to point out seasonal effects I had not clocked the first time (foolishly); January is on average 0.5-0.9 pips lower than December, for obvious reasons. Still, the fact that it was lower by 0.2, despite VAT rising, is a strong indication for me that CPI inflation is scarcely a threat.