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[quote=DaRC_L ]Hmmmm can I put the cynical POV...
it's May, the start of wage negotiations at a number of large organisations, a small dip into deflation means that the organisations can argue for no pay increases.
The latest news on the Oil front is that price per barrel is rising due to IS and general Middle East turmoil
So no wages rises, then as soon as the negotiations are over inflation again.
So big pay rises next year, when the drop in oil price has fallen out, and the rise in oil price has been included (doubtless the BoE Governor will have to write another letter). You do realise that it's not possible to continuously have low inflation in May and higher inflation the rest of the year?
[quote=gonefishin ]If there is one thing that I've learned it is that there is very little that is good or bad in economics. Whether it is inflation, deflation, monopolies, or a perfect market nothing is black and white it's all a bit grey and more complicated that most people would like.
...and somebody somewhere will be making a killing
Before we get on to trustworthiness and those nasty Tories etc, you should note that we use the EU harmonised version of CPI, so this is not unique to the UK
What you're basically saying is we should blame Europe 😉
history is being rewritten as we speak apparently the "lost 20 years" due to stagflation in Japan are now a myth
try this to paper over some cracks
[url] http://www.oecd.org/eu/escaping-the-stagnation-trap-policy-options-for-the-euro-area-and-japan.pdf [/url]
These most recent fears about Inflation and Deflation, to my mind illustrate a lot of what's wrong with economic thinking in the UK and the West in general at the moment - we've just about emerged for a deep, dark global 'Great Recession' and we're still looking for "normality" - the BOE wants 2% inflation a year, the correct amount of national debt, the correct amount of consumer debt and the 'correct' value of a huge amount of other indicators for the 'correct' economy.
My issues it that more often than not the BOE and the Government will attempt to artificially influence these markets to get to the correct values - which makes turns indicators into goals and renders them useless, but more important that that is the fact that history shows us that the 'correct' economy is unsustainable and attempting to rebuild the old one from the position we're in now (over valued property) will only mean another 'great recession' will arrive within a few years.
The BOE and Government (all sides) only seems interested in fixing the symptoms and not the root cause again.
We need to release a chunk of green belt, have a massive high density house / flat building program over 20 years in the SE which will eventually correct house prices by upping supply to meet demand. Then we might be able to finally move on from the absurd situation of having a domestic housing debt fuelled economy.