Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will You Make Money in the New Silver Bull Market ? - 13th Aug 20
Hyper-Deflation Capital Destruction And Gold & Silver - 13th Aug 20
Stock Market Correction Approaching - 13th Aug 20
Silver Took the Stairs to $21 in 2008, Took Escalator to $29 2010. Is Silver on Elevator to 120th floor today? - 13th Aug 20
President Trump Signs Additional COVID Relief – What To Expect from the Markets - 13th Aug 20
Has Gold's Upward Drive Come to an End? - 13th Aug 20
YouTuber Ads Revenue & How to Start a Career on YouTube - 13th Aug 20
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

UK Government is Still Underestimating Inflation According to Fool.co.uk's Inflation Index

Personal_Finance / Inflation Jul 04, 2007 - 04:10 PM GMT

By: Fool.co.uk

Personal_Finance

Despite two interest rate hikes this year to curb the cost of living, Fool.co.uk readers say official inflation figures are still wide of the mark (1).

  • Consumers say the true rate of inflation is 7.3% not 2.5%
  • Inflation is lower for men than women
  • Older people are worst affected by inflation
  • Scotland experiences the lowest rate of inflation
  • Northern Ireland experiences the highest rate of inflation

As part of an ongoing study (2) into inflation in British households, almost 1,300 Fool.co.uk readers again disagree with official inflation numbers. They reveal the Government's measure of inflation bears little resemblance to what they feel is the real increase in the cost of living. Nine out of ten people say inflation is almost three times higher than the Government's figure of 2.5% (3).

On average, consumers think that prices are rising at 7.3%. Six months ago they said inflation was 7.4% and not 2.7% as calculated by the Office for National Statistics. Two out of three people estimate their personal inflation is somewhere between 4% and 9%, and one in five people believe that inflation is between 10% and 15%.

For a second time, men and women have distinct takes on inflation. Men say their personal inflation is 6.5%, which is appreciably lower than the 7.1% cited last time. Women reckon that the cost of living is rising at 7.6% a year. This is slightly lower than six months ago when they said inflation was 7.9%.

The Fool.co.uk inflation index also highlights the varying impact of inflation on different age groups. Young people are affected least, though people between 18 and 25 say inflation is now higher than six months ago. They put the rate of inflation at 6.9% compared to 5.9% in January.

However, it is older people who are worst affected by inflation. People between 42 and 49 reckon that inflation is 7.6%. Significantly, the oldest group in the survey says inflation is more likely to be 7.1%.

It seems that people living in Scotland are some of the least affected by rising prices. Personal inflation north of the border is 6.3%, down from 7.5% last time. But Scotland's triumph is Northern Ireland's loss. People in Northern Ireland say inflation is running at 8.1%, up from 7.7% in January. Londoners reckon inflation is stuck at 7.3%.

David Kuo, Head of Personal Finance at Fool.co.uk , says: "When gauging inflation, consumers simply want reliable inflation figures. Our indices show they are, and that raises questions as to the relevance of Government inflation numbers to ordinary people.

"Inflation is not whittling away our income at a modest 2.5% per annum as the Government suggests "it is slicing off chunks at a rate of 7.3% a year. For one in five people, the buying power of the pound in their pockets is being eroded at over twice this rate.

Older people, especially those who rely on retirement income, are some of the worst affected. Furthermore, people relying on the basic state pension, which will only rise in line with Government inflation figures, may feel the pinch even more.

Inflation is sometimes called the hidden risk because it quietly chips away at the buying power of the pound in our pockets. But it's hard to disguise a chip when it becomes a chunk.

Figure 1: What do you think is your personal rate of inflation based on your household expenditure results table

Region Personal Inflation
January 2007 June 2007

Scotland 7.5% 6.3%
Northern Ireland 7.7% 8.1%
Wales 7.6% 7.3%
East Midlands 7.2% 7.1%
East of England 7.7% 7.6%
London 7.3% 7.3%
North East 7.4% 7.3%
North West 7.5% 7.8%
South East 7.1% 7.4%
South West 7.5% 7.4%
West Midlands 7.5% 6.6%
Yorkshire and The Humber 6.9% 7.4%


Gender Personal Inflation
January 2007 June 2007

Male 7.1% 6.5%
Female 7.9% 7.6%


Age Range Personal Inflation
January 2007 June 2007

18 - 25 5.9% 6.9%
26 - 33 6.8% 7.5%
34 - 41 7.4% 6.4%
42 - 49 7.6% 7.6%
50 - 57 7.6% 7.2%
58+ 7.6% 7.1%


Notes:

(1) An online survey of 1,271 Fool.co.uk readers conducted between 6 June and 22 June 2007 - Fool.co.uk: Inflation Index - Six Months On

(2) Fool.co.uk news release: Consumers Reveal The Truth About Inflation - 12 January 2007.

(3) Office for National Statistics: Consumer Price Indices - 12 June 2007.

By Sonia Rehill
soniar@fool.co.uk
http://www.fool.co.uk

For further information and/or to arrange an interview with David Kuo please contact:

Sonia Rehill, Fool.co.uk, on 020 7297 8159 or Soniar@fool.co.uk
Sophie Jones, Fool.co.uk, on 020 7297 8160 or Sophiej@fool.co.uk


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules