A better measure of inflation?

Via SaveOurSavers, there’s a new inflation measure published by Tullett Prebon, which claims to more accurately show the impact of inflation in the UK than the official CPI.

CPI running at an annual rate of 2-3% doesn’t sound too bad, but many of us have been suspicious that this isn’t really measuring the rise in many staple goods in the economy.

Here’s the chart accompanying the press release:


According to this measure, the prices of nearly all essential goods and services are rising much faster than CPI. Tullet Prebon are planning to publish this each month, so it will be interesting to see how the figures change in the future.

Simon Rose quotes the somewhat infamous tale of the head of the New York Fed, who claimed there was no overall inflation because the iPad2 was available for the same price as the first iPad. It’s certainly true that many electrical goods are continually getting both better and cheaper – but this is little comfort when millions are struggling to pay the rent, food and energy bills. All of the newly printed money as got to end up somewhere…


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