Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

UK Government is Still Underestimating Inflation According to Fool.co.uk's Inflation Index

Personal_Finance / Inflation Jul 04, 2007 - 04:10 PM GMT

By: Fool.co.uk

Personal_Finance

Despite two interest rate hikes this year to curb the cost of living, Fool.co.uk readers say official inflation figures are still wide of the mark (1).

  • Consumers say the true rate of inflation is 7.3% not 2.5%
  • Inflation is lower for men than women
  • Older people are worst affected by inflation
  • Scotland experiences the lowest rate of inflation
  • Northern Ireland experiences the highest rate of inflation

As part of an ongoing study (2) into inflation in British households, almost 1,300 Fool.co.uk readers again disagree with official inflation numbers. They reveal the Government's measure of inflation bears little resemblance to what they feel is the real increase in the cost of living. Nine out of ten people say inflation is almost three times higher than the Government's figure of 2.5% (3).

On average, consumers think that prices are rising at 7.3%. Six months ago they said inflation was 7.4% and not 2.7% as calculated by the Office for National Statistics. Two out of three people estimate their personal inflation is somewhere between 4% and 9%, and one in five people believe that inflation is between 10% and 15%.

For a second time, men and women have distinct takes on inflation. Men say their personal inflation is 6.5%, which is appreciably lower than the 7.1% cited last time. Women reckon that the cost of living is rising at 7.6% a year. This is slightly lower than six months ago when they said inflation was 7.9%.

The Fool.co.uk inflation index also highlights the varying impact of inflation on different age groups. Young people are affected least, though people between 18 and 25 say inflation is now higher than six months ago. They put the rate of inflation at 6.9% compared to 5.9% in January.

However, it is older people who are worst affected by inflation. People between 42 and 49 reckon that inflation is 7.6%. Significantly, the oldest group in the survey says inflation is more likely to be 7.1%.

It seems that people living in Scotland are some of the least affected by rising prices. Personal inflation north of the border is 6.3%, down from 7.5% last time. But Scotland's triumph is Northern Ireland's loss. People in Northern Ireland say inflation is running at 8.1%, up from 7.7% in January. Londoners reckon inflation is stuck at 7.3%.

David Kuo, Head of Personal Finance at Fool.co.uk , says: "When gauging inflation, consumers simply want reliable inflation figures. Our indices show they are, and that raises questions as to the relevance of Government inflation numbers to ordinary people.

"Inflation is not whittling away our income at a modest 2.5% per annum as the Government suggests "it is slicing off chunks at a rate of 7.3% a year. For one in five people, the buying power of the pound in their pockets is being eroded at over twice this rate.

Older people, especially those who rely on retirement income, are some of the worst affected. Furthermore, people relying on the basic state pension, which will only rise in line with Government inflation figures, may feel the pinch even more.

Inflation is sometimes called the hidden risk because it quietly chips away at the buying power of the pound in our pockets. But it's hard to disguise a chip when it becomes a chunk.

Figure 1: What do you think is your personal rate of inflation based on your household expenditure results table

Region Personal Inflation
January 2007 June 2007

Scotland 7.5% 6.3%
Northern Ireland 7.7% 8.1%
Wales 7.6% 7.3%
East Midlands 7.2% 7.1%
East of England 7.7% 7.6%
London 7.3% 7.3%
North East 7.4% 7.3%
North West 7.5% 7.8%
South East 7.1% 7.4%
South West 7.5% 7.4%
West Midlands 7.5% 6.6%
Yorkshire and The Humber 6.9% 7.4%


Gender Personal Inflation
January 2007 June 2007

Male 7.1% 6.5%
Female 7.9% 7.6%


Age Range Personal Inflation
January 2007 June 2007

18 - 25 5.9% 6.9%
26 - 33 6.8% 7.5%
34 - 41 7.4% 6.4%
42 - 49 7.6% 7.6%
50 - 57 7.6% 7.2%
58+ 7.6% 7.1%


Notes:

(1) An online survey of 1,271 Fool.co.uk readers conducted between 6 June and 22 June 2007 - Fool.co.uk: Inflation Index - Six Months On

(2) Fool.co.uk news release: Consumers Reveal The Truth About Inflation - 12 January 2007.

(3) Office for National Statistics: Consumer Price Indices - 12 June 2007.

By Sonia Rehill
soniar@fool.co.uk
http://www.fool.co.uk

For further information and/or to arrange an interview with David Kuo please contact:

Sonia Rehill, Fool.co.uk, on 020 7297 8159 or Soniar@fool.co.uk
Sophie Jones, Fool.co.uk, on 020 7297 8160 or Sophiej@fool.co.uk


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules