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An update on the impact of the VAT rises in the UK compared to Australia and Japan

Here’s an update of a slide we produced a year ago following the January 2010 move back to 17.5% VAT from the 15% emergency rate.  We were comparing the UK’s retail sales numbers to those in Australia and Japan around the time of their consumption tax hikes, and asking whether we’d see pre-loading of purchases ahead of the sales tax and a collapse back afterwards.  The blue line shows that ther…

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UK inflation jumps most in one month since 1993 – cue mass hysteria

A 1% jump in UK CPI in December meant that the year on year inflation rate in the UK soared from 3.3% to 3.7% year on year, once again beating consensus expectations of 3.4%.  No doubt we’ll have the newspapers tomorrow full of talk of a return to the 1970s, and no doubt we’ll also have various MPC members continuing to come out over the next few weeks and months explaining that this inflation …

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UK inflation soars, but beware of the hysteria

Expectations had been for a big jump going into this morning’s release of December UK inflation statistics, however expectations still weren’t high enough.  The year-on-year CPI inflation rate surged from +1.9% to +2.9%, eclipsing the average forecast of 2.6% (economic forecasts varied from as low as +1.9% to +2.8%).  This marked the biggest jump in UK CPI since April 1991.

Why the big jump?  W…

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