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Thread: Inflation at 0.5% but breakdown tells a lot more

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    Politics.ie Member Fides's Avatar
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    Default Inflation at 0.5% but breakdown tells a lot more

    Headline figures show a low level of inflation for September but a look at the breakdown shows something else is going on

    http://www.cso.ie/releasespublicatio...urrent/pic.pdf

    The big jumps are in housing (mortgages up/rents down), utilities and education. Meanwhile retailers are still seeing deflation. Not the best combination from a business point of view as input costs in terms of overheads (utilities, transport, communication) are rising but receipts from sales are still falling. Education up 9.5% is a big leap.

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    As usual those areas under the control of the state are rising, evidence that this shower are not addressing the real issue of unemployment, our underlying uncompetitiveness.

    Until they remove the state induced high overheads unemployment is only going to get worse.

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    It is primarily State driven inflation

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    Interesting. Looking at what is up and what is down, and comparing those with my usage/expenditures, my expenditures are all up.

    From report:
    04 Housing, Water, Electricity, Gas and Other Fuels + 6.76
    07 Transport + 0.71
    01 Food and Non-Alcoholic Beverages + 0.47
    03 Clothing and Footwear + 0.31
    10 Education + 0.13 06 Health - 0.06
    08 Communications + 0.11

    02 Alcoholic Beverages and Tobacco - 0.66
    12 Miscellaneous Goods and Services - 0.50
    11 Restaurants and Hotels - 0.20
    09 Recreation and Culture - 0.15
    05 Furnishings, Household Equipment and Routine
    Household Maintenance - 0.01

    So much for things being cheaper.
    The enemy of my enemy is the enemy of my enemy. EU Army coming to be, the feckin' conspiracy nuts on Lisbon were right on this one.

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    What people don't often address is that inflation is an average figure. As seen above it is possible to calculate inflation in different sectors of the economy, but also for different types of people.

    Older people buy a different mix of goods to younger people, and the rich buy a different mix to the poor, so all these groups can experience different types of inflation - or in Ireland's case, deflation. For this reason it is worth comparing social welfare changes to their inflation rates, and the same for changes in wage levels of different sectors.

    The consensus on this is that the higher up the income scale you go, the lower your inflation rate has been in recent years. Consumer electronics and air travel have been collapsing in price, while staples have increased, and this pattern of difference between top- and bottom-end inflation is reflected across many categories.

    In addition, the fixed charges of the type that the government tends to impose form a bigger proportion of poorer households' spending, and therefore a larger component of the inflation rate that they experience. I think that this should inform the debate about adjusting social welfare and public sector pay levels.
    Here's How, Ireland's political, social and current affairs podcast; Call the show on 076 603 5060 to record your contribution for the next show.

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    I'm looking forward to the spinning from those who used deflation as an excuse to slash welfare as to why we shouldn't increase it now that we have inflation.

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    Politics.ie Member libertarian-right's Avatar
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    Quote Originally Posted by William D View Post
    It is primarily State driven inflation
    +1 which is mainly driven by the need to fund our debt (bank bailout / NAMA / deficit)

    This totally voids the arguement from FF/Greens that they are doing ANYTHING to make us more competitive, in fact they are making things worse.

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    Politics.ie Member gijoe's Avatar
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    Quote Originally Posted by myksav View Post

    So much for things being cheaper.
    Not if you are alcoholic renter, hic!

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    Quote Originally Posted by Baron von Biffo View Post
    I'm looking forward to the spinning from those who used deflation as an excuse to slash welfare as to why we shouldn't increase it now that we have inflation.
    Honest question, Biffo: Annual deficit running at 22bn per year. Depending on who you believe, that's a banking bailout once ever two to three years.

    Assuming that you accept that this is not sustainable, roughly what mix of spending cuts and tax increases would you use to close the gap?
    Here's How, Ireland's political, social and current affairs podcast; Call the show on 076 603 5060 to record your contribution for the next show.

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    Politics.ie Member Mitsui2's Avatar
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    Quote Originally Posted by GJG View Post
    I think that this should inform the debate about adjusting social welfare and public sector pay levels.
    There's a debate? All I ever hear is a few people pointing out facts such as you've done and then being shouted down by a lot of people who don't like the poor.

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