News For the Future (Feign Surprise When it Happens)

Posted on May 22, 2023. by NTI

The future news looks more interesting than the stuff hanging around the news-wires today (Monday 22 May).

We in the NTI newsroom hate to spoil the surprise, but there will be some good data issued later this week about the UK inflation rate. Economists (who have an accuracy forecasting rate equivalent to that of Billy and Tracee's grandma's weather-predicting seaweed hanging over her shed door) are expecting a large drop in the headline rate of inflation in this week’s data because the 54 per cent rise in the energy price cap for gas and electricity tariffs, imposed in April 2022, will drop out of the annual inflation calculation. That's just 'maths'; even they can't be that terribly wrong about that.

The clever money is on a reduction in the inflation rate of almost two percentage points (down from 10.1 to 8.4) when it is announced on Wednesday of this week, and although economists expect measures of underlying price pressures to show little improvement, let's be frank, no-one really listens to them much any more.

The fact remains that the UK’s core inflation rate, excluding food, alcohol, tobacco and energy prices, will probably climb from a 6.2 per cent rate in March to 6.5 per cent in April. With the Bank of England tussling with their target of two per cent (in the same way that Neil tussles with his target of growing a plait by the end of July ...) there may still be some upward pressure on interest rates next month which will be yet more gloomy news for those with mortgages where their erstwhile fixed rates are now appearing in the rear view mirror. 

All may not be lost, however, as the price of milk is a portent of things to come in supermarkets. It is heading down, and may lead other prices with it - so for those keen to take their Nesquik in 'banana', or to lavish their granola with the white stuff, they will be paying less for the bottle in their basket.

We asked 'the poor' about their food budgets. They were a bit miserable about it. Households in the 'poorer' category allocate roughly 15 per cent of their budgets to food compared with 10 per cent for the richest households, and it is a fact that inflation was more heavily skewed to the poor than at any time since equivalent records began in 2006.

One thing certain to go up this week is the points on the Home Secretary's driving licence. Oddly, her popularity ratings are set to fall by a number faster than inflation as she may have to spend a little more on 'image counselling'.

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