How the Government Fiddles the Inflation Figures
Officially, inflation in the UK is still low.
You and I know that inflation is between 5% and 10% a year – probably nearer to 10%.
But the official inflation figures (which are used to decide pension payments for the elderly and interest payments on some gilts) are much, much lower – considerably less than 2%.
I have long argued that this is entirely because the Office for National Statistics calculates the UK’s inflation in such a way that the figure is absurdly, unrealistically low.
Economists and statisticians calculate the official inflation figures by looking at the prices of the items in an imaginary ‘basket’ of commonly purchased things and services.
Rarely purchased items are left out of the basket. So, for example, things that the Government has decided that most of us spend very little on (housing costs, taxes, fuel, heating, bread, beer, insurance) are all excluded.
But stuff that we buy on a regular basis is put into the index.
The Government constantly checks to make sure that the basket of items on which we spend our money is relevant and up-to-date.
And so the ‘basket’ was recently re-jigged to bring it up-to-date again.
Here are the items which the Government has decided that we regularly purchase and which have been added to the basket of commonly purchased items:
Canned apple cider
Bottles of fruity cider
So, that’s it.
I don’t buy any of those things.
And if you don’t then someone, somewhere must be buying a hell of a lot of canned cider, almond milk and bicycle helmets.
The only alternative explanation is that the Government is deliberately keeping the inflation figures falsely low so that it doesn’t have to pay out what it should be paying in pensions and interest.
They wouldn’t do that, would they?
Copyright Vernon Coleman 2017
Vernon Coleman’s books include ‘Moneypower’ – available as an ebook on Amazon.
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