I just don't get it at all. We are told by the financial press, the Chancellor, the Prime Minister, the opposition, the Bank of England and our employers (lest they give us a decent pay rise) that inflation is about 2.5% at the moment. We are told to be prudent in our pay claims because if we're not inflation will rise. Those of us in the public sector are told to be particularly careful.
Now I know I may not be a student of economics, either micro or macro, but my water bill has gone up by 20% this year, gas and electricity has gone up by about 15-20%, filling my car up with petrol is about 10 quid more expensive than it was this time a year ago, bread costs 20p a loaf more than it did 9 months ago. Food on the whole is more expensive (as a result of the fuel rise) too. And inflation is still only 2.5%.
I would love to buy accommodation for Lily, Sybil and me but house prices have spiralled out of control to such an extent that after 25 years of work and a decent wage I can't afford to buy anything with more than one bedroom. Yet inflation, they tell us is only 2.5%. I ask this simple question. What do you base you analysis on? I know i am far worse off this year than I was last and I know I'm not the only one. The outlook is fairly bleak too. If I get a 2% pay rise I will count myself lucky (although not happy) yet petrol, gas, electricity and water will continue to go up above the mythical rate of inflation.
Some clever economist will probably come up with an equation to prove that inflation is only 2.5% but I will say this. The rate of inflation is not based on any reality I know. it may not effect the fat cats in the city (Barclay's Bank President Bob Diamond got a BONUS of 14.8 million quid this year) but the rest of us will be left scratching our heads at how they come up with the figures and and tightening our belts as the cost of living soars.