
UK inflation rate turns negative - lentil_soup
http://www.bbc.com/news/business-32793481
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stegosaurus
No, it really doesn't.

Housing is 50% of my budget. It's 50% of everyone I know's budget, or more. It
is most certainly not getting cheaper at all, it is skyrocketing.

I don't care what 'inflation rate' the lucky few that own outright face. Why
should I? They have won. They've completed the game. Inflation could run 15%
for years and they would still win.

If you are going to define inflation on such a ridiculous basket that it
really is irrelevant what the prices move to then don't pretend that it's a
useful indicator of anything.

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adwhit
Rent for my 1-bed flat in London zone 3: £19000/year.

Can London really continue to have an interesting tech scene under such
circumstances? Tech wages (outside the financial sector) are around £30k-£60k.

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retube
Then you are paying way too much. There's lots of smart 2 beds in Putney for
the same price - zone 2, close to the high street & shops/mall/supermarket, 5
mins walk from railway (17 mins to waterloo) or tube (20 mins to earls crt,
south ken etc)

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jacquesm
So, how long before we reach a deflation spiral as more and more people hoard
their money in hopes that they can buy more stuff for it tomorrow than they
can buy today which will totally crash the economy? Just a bit more of this
and bitcoin will start to look pretty good!

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brc
Name a single deflationary spiral that has happened.

Identify how much spending you can postpone until next year.

Reflect if a deflationary spiral is even remotely likely.

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seanmcdirmid
Uh, is this a trick question? Japan?

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wintersFright
long read, but he argues that the Japan CPI went up
[http://www.financialsensearchive.com/fsu/editorials/amerman/...](http://www.financialsensearchive.com/fsu/editorials/amerman/2009/0318.html)

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seanmcdirmid
Definitely not written by someone living in Japan. Here:

[http://www.tradingeconomics.com/japan/inflation-
cpi](http://www.tradingeconomics.com/japan/inflation-cpi)

You can say they have had net inflation if you pick your time range correctly,
but the graph shows spurts of deflation followed by spurts of deparate
inflation via QE that doesn't solve the deflation.

Google "Japan deflation" today and you'll get articles from yesterday
describing how they are still trying to fight this problem.

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wintersFright
will read - thanks

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JupiterMoon
Does this include pump prices for fuel?

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gerty
This. Zero (or negative inflation) today is mostly due to lower oil prices and
slower increase, even decrease, in non-processed food prices (at least it's
the case in parts of continental Europe). Core inflation, which excludes
volatile stuff, in the UK is 0.8%. Although slowly decreasing, it's still well
above 0%. Core inflation is here the number that matters.

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fulafel
Both (core and straight inflation) numbers matter, they have different uses.
Food and energy costs are important parts of inflation. For some uses it can
be interesting to exclude these, yielding an approximation of the inflation
with less volatility.

Oil prices for example have been coming down long enough that it's not noise
re economic effects any more, so it would be bad to exclude the effect of
cheaper oil.

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0x006A
also known as deflation.

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ed_blackburn
Apparently it needs to be sustained to be deflation.

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_0ffh
Nope, I don't think so. That's just a political talking point.

Chancellor: "Negative inflation is not damaging deflation"

So it's not "damaging deflation", but it's still deflation.

"Economists [...] say proper deflation is a long term term trend of declining
prices [...]"

So it's not "proper deflation", but it's still deflation.

We could also s/inflation/negative deflation/ and that would be absolutely
correct.

They are avoiding the word for fear of the connotations of a sustained period
of deflation. Which will actually make the problem worse, as it sets a
precedent for a changed understanding of the word deflation. So next time
everyone will be even warier of using the term. Instead they should accustom
people to hearing the word without thinking "OMG! WE ARE ALL GOING TO
DIE!!1!".

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marrs
They should, but nobody ever does. They'll just continue to find aliases that
are more and more vague until nobody knows what the hell anybody's talking
about any more. Although, the robots will have taken over by then anyway.

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_0ffh
I, for one, welcome our new digital overlords!

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ExpiredLink
not only in the UK

