So the rate of inflation has dropped.
This does not mean that the cost of living has gone down.
Even the overall figure is well over the BOE interest rate (about 5%) which is way above all economists dream.
There is NOT deflation yet.
Recently news programs seem to be suggesting that (although everything else is rubbish) the price of food is coming down........this is just such a slap in the face for budget breadline families (I do not mean young singletons, who can be far more flexible on virtually zero budget(I only speak from past experiance))
In the last couple of months 'basics/value/smartprice' pasta has increased from 20p to 39p (nearly 100% increase) In all major marts
Basics beans have increased by 50% Cheap tins of fruit have all increased.
cheapest bread has increased in last year by 50%
Sunflower oil has increased from 60-70p to about 140p in last year.
Last night I clocked that the basics honey has increased (overnight) from 60p to over 90p (50% overnight)
Whatever retail prices they are using in their analysis are NOT the basics budget food, and these are having massive price increases.
Luxory food lines might not be increasing in price, and middle range also might not be increasing, but to stop themselves losing sales to the budgets the marts are increasing the basics as the (normally) more well off start to try to use the basics.
For the very poor this is of no help or comfort at all, and I consider it a gross misrepresentation of glib news reporting, these people compiling/presenting the news, obviously only represent ans portray the news from a highly ignorant and middle class perspective (No doubt in a while someone(middle class) (whose job it is to 'study the poor') will come up with some research to mention all this.......but what i object to is the way that the news actually isnt news at all, it just fills up airtime with whatever is available, no one actually tries to get to the bottom of anything.
I have previously said that the cost of basic foodstuffs will go up whilst prices of luxory goods might will go down (if not evenly there will be sell offs)
PS the PM is vastly mistaken to try to cut taxes to try to boost 'consumer spending on luxory/unecessaries, to prevent deflation'
It does show he has little deep understanding of what is going on (hold your horses CG, Cameron seems to know little either, and Osbourne has not said why he thinks its bad, or what he should spend it on)
(PS answer is for gov to spend what money it can on capping debt and borrowing reclaiming by banks, radically cut back on unecessary services...invest in energy provision if it likes......spend on the future......if you dont want activity to stop then at least direct it towards something that is necessary/vital.....insulate peoples homes.....encourage companies to not encourage car use......encourage people to work from home not the office....(improve homeworking metrical measuring to ensure they dont turn into lazy days).....stop stupid spending.....have a budget olympics with what we have at the present.....yes you doubters it can be done......a whole overhaul of priorities is needed.....STOP TRYING TO TURN THE CLOCK BACK TO GET BACK TO WHAT WE HAD BEFORE........ITS WRONG AND STUPID)