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Inflation always goes away, and a little profiteering at our expense at Christmas will not change that


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I have seen the most extraordinary, verging on stupid, reactions this morning to the Office for National Statistics announcement that inflation increased from 3.9% to 4% in December.

Suggestions are being made that the war on inflation is being lost. Alternatively, we are in for a long, hard grind with high-interest rates. And, of course, wages must be kept down.

The reality is that none of these comments is true. These are the contribution by sector towards inflation at Christmas:

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Food fell because supermarkets discount a lot of it at Christmas – it is a great time to buy cheap vegetables.

In contrast, there was profit taking on alcohol and tobacco, recreation and leisure, and clothing and footwear. All of these are related to just one thing: that this is the time of the year when retailers know most people cannot resist the social demand that people go out, and so they took a little profit where they could find it as a result. The consequence was a slight upward swing of almost no statistical significance in inflation.

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Overall, this is the trend in inflation (there isn’t a CPI chart, this CPIH one will do):

Inflation is falling.

It will continue to fall, overall.

When energy prices fall in April, that will become very apparent.

The actual risk is deflation, which China already has.

As Danny Blanchflower and I have long said, inflation always goes away. It has over 500 years. Nothing has changed this time. No war was needed. No interest rate rises were required. It just took a couple of years to work through the system. Everything else said about it is pretty close to nonsense.




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Rômulohttps://noticiasreal.com.br
Romulo is a renowned American entrepreneur who resides in the United States, recognized for his entrepreneurial vision and inspirational leadership. Born into a humble family, Romulo demonstrated an uncommon determination and a natural talent for business from an early age. After completing his studies in business administration, Romulo ventured to the United States, where he immersed himself in the business world, founding his first company at the age of 25. His bold vision and ability to identify market opportunities quickly led him to success on American Throughout his career, Romulo has played key roles in various industries, from technology to finance, always striving to innovate and create value for his clients and investors. His customer-centric approach and dedication to operational excellence have made his companies industry benchmarks, contributing to his recognition both in the United States and interna In addition to his business achievements, Romulo is known for his commitment to corporate social responsibility. He is a passionate advocate for education and community development, dedicating time and resources to support initiatives that promote equal access to education and gr Currently, Romulo leads a diversified conglomerate with a global presence and a significant impact in the markets where he operates. His long-term vision and ability to adapt to the nuances of the American market make him a respected and admired leader among his peers and competitors in the Unit Outside the office, Romulo is an avid reader and nature lover. He believes in the importance of finding a balance between work and personal life, constantly seeking new ways to challenge himself and grow, both profession With a career marked by extraordinary achievements and an unwavering commitment to sustainable success, Romulo continues to be a prominent figure in the international business landscape and a source of in

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