The CPI index for June 2013 was 125.9, compared to 126.1 in May that year. In 2014, the CPI index for June is 128.3, compared to 128.0 in May.

So some of the explanation for the “Sharp rise” (BBC) is stuff that happened a year ago.


Really dull chartCPIJun14a

Why did the index rise? Three components went up that didn’t do much in the previous year (weightings in brackets)


Food, Clothing and Transport each added 0.1 to the index.  If they had not, we would have 1.7% inflation instead.  If they had fallen like the year before, 1.5%.

Finally, is this the start of a new trend?  Well, never make predictions about the future. But I would say: not from this source.  This what those three items have done since mid 2012:

CPI Jun14c

Not much of a trend there.  The rest of the index did what it usually did, rose a bit more than 2% per year, thanks to things like government taxes, the tuition fee effect, etc.

I don’t think we’ll see serious CPI inflation till we see (welcome) wage inflation. We haven’t seen it today.









One thought on “An inflation meh

  1. Good post. These aren’t the sectors anyway to see domestic demand generated inflation, food is too dependent on the weather, transport is largely regulated, and clothing is internationally supplied and so subject to global supply/demand.

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