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…Read the article
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 …Read the article
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…Read the article