Tag Archives: BankofEngland

The king and his fish: the RPI fairytale

The monthly release of the inflation figures (due tomorrow Wednesday 16th) is always a reminder of the futile attempts by ONS/UKSA to suppress the RPI. The RPI is the most popular statistic produced by the ONS (as measured by web hits, calls to ONS etc.) yet there’s no commentary on the RPI and the numbers do not appear in the 11 page press release. The breakdown of the RPI is hidden away in the back three pages of the 19 page data pack (just after the table that gives the rates for Lithuania, Slovakia and other EU states that the ONS presumably thinks are more interesting to users). To note the madness of this continuing practice, please find below a fairytale.  Continue reading The king and his fish: the RPI fairytale

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The truth about the RPI – some brief comments

I spoke at an event about the Retail Prices Index (RPI) last week and made three points – that there is a misunderstanding about the formula effect, ONS is too influenced by economists’ ‘group think’ and weaknesses in governance. These can all be resolved easily, returning RPI to full use, if ONS and UKSA wants to. It was widely agreed that “the mess” had to be sorted out, and as the RPI cannot be killed off some modest changes to it are required.  Continue reading The truth about the RPI – some brief comments

The UK’s trade deficit in goods

This is about a bad trend in some questionable data: the official data says that the UK has a huge balance of trade deficit in goods, it’s getting worse and the driving force behind the trend has been the growing deficit with the EU. True? Probably. This trade deterioration needs to be noted, diagnosed, discussed as part of the Brexit negotiations and reversed.  Continue reading The UK’s trade deficit in goods

“Inflation soars” OMG

Those broadsheets that wanted to “remain” are looking for every scrap of bad news following the Brexit vote. For many stories it seems fair enough, newspapers always have their own take on events. Surely though, it’s a step too far when the reporting of official statistics “facts” falls below a certain threshold of quality, deliberately. Such was some of the reporting of Tuesday’s inflation figures. More reporting of events (and less speculation), a bit of perspective (not focusing on the latest month’s figures) and looking at the detail of the release would be good.  Continue reading “Inflation soars” OMG

Earnings: true not fair

The weakness of earnings growth has dominated the debate about the recession and recovery in the last few years. “Average earnings” are lower in inflation-adjusted terms than at their recent peak in 2008. This does not (by and large) reflect falling wages for individuals. The average wage has grown more slowly because millions of low paid jobs have been created. Those low-paying jobs have dragged down the average while earnings for those in work have continued to rise relatively strongly. Poor explanation and inadequate “health warnings” have made it easy for economists, the media and observers to get a misleading impression of what’s been happening. When the underlying truth about the statistics fully emerges, there will be a rewriting of history and a realisation that the recession did not plunge so many people into a “cost of living crisis”. The “average” will also be seen for what it is: a dangerous concept when there is rapid structural change in what is being measured.  Continue reading Earnings: true not fair