Wednesday, February 15, 2012

Good news?

It must be a slow news day over at the Daily Express, they are trumpeting that a slightly lower rise in the cost of living is somehow good news.
INFLATION fell to a 14-month low last month, providing some welcome good news for cash-strapped families.
The rise in the cost of living dropped to 3.6 per cent in January from 4.2 per cent in December, according to the Office for national Statistics.
The fall is partly down to the VAT increases of January last year, where the tax rose from 17.5 per cent to 20 per cent, having now fallen out of the annual calculations. But several goods and products have also seen increases in their costs slowing.
Charges for commodities and oil have not risen by as much as they did at the same time last year. Petrol prices, for example, increased by 0.6 pence per litre in January, compared with a 5.4 pence rise in 2011.
Meanwhile, diesel was up 0.7 pence, while last January it had soared by 5.8p.
Rises in clothing and footwear, furniture and household goods and transport costs also slowed.
But alcohol, financial services and air transport saw larger price increases.
While the consumer prices index (CPI) rate of inflation fell to 3.6 per cent last month, other measures of inflation also fell. The retail prices index (RPI) dropped to 3.9 per cent in January from 4.8 per cent in December, its lowest level in just under two years.
Ok, it's not as big a rise as last year, however unless somehow or other you're actually getting a pay rise above the rate of inflation, then you're still going to be out of pocket and I see no reason to be cheerful about being out of pocket. If like me you've had no pay rise in the last 2 years, it's definitely not good news, good news would be a negative before the cost of living index such as a -3.6% drop. Fuel, food, energy all cost rose, perhaps not as much as expected, but they still rose and people still have to find the means to make up the difference, which usually means the odd little luxury has to go, though I suspect a lot of people have passed that stage and are at the juggling essentials in order to make ends meet, hence the rise in payday loans and people defaulting on them.
Of course there are the odd exceptions, people like Birmingham University Professor David Eastwood enjoyed a seven per cent pay rise in the last academic year who earned a £29,000 bonus last year on top of his £323,000 salary and £67,000 in pension and other benefits, which includes the £16,000 running costs of his grace-and-favour university residence. Nice work if you can get it and all paid for by tripling the entry fee for student courses to £9,000. There are other exceptions too, bankers etc, though in all cases it seems to be people at the top of the tree, rather than those of us struggling at the bottom and wondering whether to eat or heat the house.
So, sorry Daily Express, not good news, not good news at all.

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