There comes a time when we all begin to sound like our parents. As a father of three, with my teenage Daughter at university in the UK, I’m already a few years into my ‘metamorphosis’. I avoid coming across as a hypocrite and try not to lecture, instead I attempt to “gently persuade”. My eldest Son has now begun to venture out, to experiment with alcohol and push the boundaries of what night clubs he can get into with his friends on a Saturday night. They’re a tight bunch and as such us parents have encouraged them to stay together, to fly under the radar and to call if they get stuck, or in a jam.
My biggest issue, and the point at which I really begin to show my age, is the time and money he spends on his adventures. Back in the day (my day) night clubs closed at 2am not 6am, similarly fifty of our splendid English pounds is his average spend which he has to work hard to accumulate. A paper round each morning, waiting on tables and occasionally getting to referee a football match constitute his wages, to watch that weekly sum blown on a night out is difficult to contend with as a parent. My son, a fellow student of economics likes to remind me with a cheeky grin, ‘that’s inflation for you Dad!”
Unlike teenagers I have price reference points were inflation is concerned. Certain items are now, in both real and inflation adjusted terms, significantly cheaper than they were as recently as five years back. Paying circa £400 for a 42″ LCD HD tv with a ‘decent’ brand name is incredibly good value. Digital 14 mp cameras can be picked up for £50, CDs are now less than when first introduced and recent DVD releases are £8 when ten years back they were circa £20. So as consumers we have reason to be grateful and to bow down to the great god of consumerism and globalisation…don’t we? Well no actually, not when the value of your currency and wage had been eroded by half over a ten year period, but that’s a story for a different day. For now let’s concentrate on the latest inflation figures published by the UK’S official ONS body and how they’re used to misdirect UK consumers and mask the real levels of inflation in the economy that ordinary citizens are currently suffering. A real figure that organisations such as shadow stats. in the USA put at 17% for the real levels of inflation for America.
The official UK inflation figures published yesterday were in line with those anticipated by the economists Bloomberg’s had canvassed. CPI had fallen from 5% to 4.8%. Now we could argue that increased seasonal competition amongst retailers has caused this blip suggesting it’s temporary. Or we could believe the governor of the UK Bank of England when he states that inflation will be down to 2% by the second quarter of 2012. A claim that the OECD may support given they predict that the UK will be back in recession by such time. However, I want to leave you with November’s listing showing what items are included for the inflation calculations. I’m sure we can all relate this basket of items to the real spending we engage in on a monthly basis, we’ll begin to understand the deliberate manipulation and reach a conclusion as to the headline figure’s relevance to our ‘day-to-day’ existence…
The devil is in the detail. Price drops year on year Oct 2010-11. Source taken from ONS press release
09.0.1 Audio-visual equipment and related products -10.1%
09.1.1 Reception and reproduction of sound and pictures -7.4%
09.1.2 Photographic, cinematographic and optical equipment -25.4%
09.1.3 Data processing equipment -17.4%%
12.6 Financial services (nec) -1.6%
09.3 Other recreational items, gardens and pets -1.1%
09.3.1 Games, toys and hobbies -4.9%
09 Recreation and culture -0.5%
07.1.1B Second hand cars -3.4%
All of the above listed items are used to bring the UK’s inflation calculation down. I don’t know of anyone who buys a TV or camera or a financial service every week or month. Now here’s a different list of our household consumables, the things we’re likely to buy regularly:
01.1.1 Bread and cereals +6.2%
01.1.3 Fish +10%
01.1.5 Oils and fats +10.5%
01.2.1 Coffee, tea and cocoa +12.8%
04.5 Electricity, gas and other fuels +19.9%
04.5.1 Electricity +14.4%
04.5.2 Gas +24.1%
04.5.3 Liquid fuels +25.5%
04.5.4 Solid fuels +7.9%
07.2 Operation of personal transport equipment +10.1%
07.3 Transport services +10.2%
12.5 Insurance +9.9%
05.2 Household textiles +7.6%
02 Alcoholic beverages and tobacco +9.1%
05 Furniture, household equipment and maintenance +9.1%
02.2 Tobacco +13.4%
How insulted should we feel reading that listing when we simply take at face value reports in the mainstream media that inflation has fallen and it’s a reason to be cheerful? Very insulted is the answer given we instinctively know that our money has further and further to stretch on survival items and not the items the ONS use to publicise their calculations. With unemployment in the UK rising, wages stagnating, real inflation rising against a backdrop of impending negative growth, the immediate future looks difficult for many UK citizens. Thankfully teenagers still find a way to party like it’s 1999..
