CPI, RPI overshoot targets.

The UK’s Consumer Price Index for November 2010 was 3.3% and the Retail Price Index 4.7% Details here.. There is plenty of food for thought about the role of the Bank of England’s MPC, and the causes of inflation. Students could investigate the extent that the recent surge is a result of Cost Push or Demand Pull factors, and possible policy approaches.

A useful tool for students to create their own graphs is this RPI Dataset mentioned in by Simon Rogers  in yesterday’s copy of The Guardian.

Supply shortages have caused increases in some food prices as this seasonal video feature illustrates. However surges in demand for cotton clothing in China have helped to push clothing prices upwards.

The ONS point out that the UK CPI rate was significantly higher at 3.2 per cent compared to the EU’s CPI figure of 2.3 per cent, which may limit the UK’s competitiveness over time.

Yesterday Andrew Sentance, one of the members of the MPC, put the case for an interest rate rise, to dampen some inflationary pressures, but today’s unemployment figures for November 2010 could be cited in a case against raising interest rates. Other comments have implied that the rise in CPI and RPI may strengthen the case against Quantitative Easing.

The above target inflation rate is not good news for savers, and the front page of today’s Telegraph is grim reading for those of us looking for real rates of return on deposits in the banks or building societies. “The dearth of decent savings products was laid bare by figures from the personal finance website Moneyfacts which showed that there were just three accounts – out of a total of 2,203 on the market – that paid a real rate of return, and only one for higher-rate taxpayers.”

Students may begin to appreciate the difficulties of reconciling conflicting macroeconomic policy objectives of stable prices, low interest rates, stable employment levels, with the needs of savers.

Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 2 Macro: Evaluation on Supply-Side Policies [21 May 2012]
Unit 2 Macro: Migration and the UK Economy [20 May 2012]
Unit 2 Macro: Positive and Negative Multiplier Effects [20 May 2012]
Unit 2 Macro: The Importance of Productivity [20 May 2012]
Unit 2 Macro: Measuring Unemployment in the UK [20 May 2012]
Unit 2 Macro: Measuring Inflation in the UK [20 May 2012]
Unit 2 Macro: Real Interest Rates [20 May 2012]
Q&A: What do we need to know about output gaps? [20 May 2012]
Unit 2 Macro: The Output Gap [20 May 2012]
Revision notes on unemployment [20 May 2012]
Unit 2 Macro: Bank Cuts UK growth Forecast for 2012 [16 May 2012]
Unit 1 Micro: Economics of a Minimum Wage [12 May 2012]
Unit 1 Micro: Poverty and Inequality and Market Failure [12 May 2012]
Unit 2 Macro: Revision Notes on Supply-side Policies [10 May 2012]
Unit 2 Macro: Model answer for revision data question [9 May 2012]
Unit 3 Micro: The Dawn of a Shareholder Spring? [8 May 2012]
Unit 2 Macro: Monetary Policy and Inflation Glossary [5 May 2012]
Unit 2 Macro: Unemployment Glossary [5 May 2012]
Unit 2 Macro: Economic Cycle Glossary [5 May 2012]
Unit 2 Macro: Aggregate Demand Glossary [5 May 2012]
Macro Revision - Key Statistics on the UK Economy [4 May 2012]
Unit 1 Micro: Using the Cost-Benefit Principle [30 Apr 2012]
Macro Revision: Putting Things in Context [29 Apr 2012]
Unit 4 Macro: The Euro Zone Crisis (Revision) [22 Apr 2012]
Unit 1 Micro: Adecco and Monopsony Power [22 Apr 2012]
Unit 2 Macro: Better news on jobs in the UK? [19 Apr 2012]
Unit 2 Macro: Skills Shortages Hold Back Recovery [12 Apr 2012]
Superb article on unemployment [8 Apr 2012]
Unit 2 Macro: Inflation and the Business Environment [6 Apr 2012]
Unit 2 Macro: Revision on Real Economic Data [2 Apr 2012]
Unit 2 Macro: Revision on Real Disposable Income [2 Apr 2012]
Unit 4 Macro: Pain in Spain as Fiscal Austerity Bites [1 Apr 2012]
Posen on slower growth in the UK compared to the USA [30 Mar 2012]
Intergenerational Equity - Fairness and the Slump [28 Mar 2012]
Blanchflower calls for more action to address youth jobless crisis [28 Mar 2012]
Life in the Slow Lane - UK Growth in 2011 Lags the Euro Area [28 Mar 2012]
Beyond the Bike - Monetary Policy in Africa [28 Mar 2012]
Unit 4 Macro: Evaluating 3 Years of Quantitative Easing [27 Mar 2012]
Unit 2 Macro: Seasonal and Structural Unemployment [15 Mar 2012]
Unit 4 Macro: Video Resources on the Euro Crisis [10 Mar 2012]
Unit 2 Macro: Policies to Drive Economic Recovery [9 Mar 2012]
Unit 1 Micro - Labour Migration and the Economy [5 Mar 2012]
Unit 2 Macro: Might Oil Prices Bring another Recession? [4 Mar 2012]
Economies hooked on central bank stimulants? [4 Mar 2012]
Unit 4 Macro: King on the UK Economy [15 Feb 2012]
Economics Explained, by Evan [12 Feb 2012]
Unit 2 Macro: China’s Trade Engine is Spluttering [10 Feb 2012]
Unit 2 Macro: Growth and Development - Some Indicators [30 Jan 2012]
Unit 2 Macro: Signs of Progress for Zimbabwe [29 Jan 2012]
Unit 2 Macro: Focus on China - Inflation [26 Jan 2012]
Unit 2 Macro: Focus on China - Changing Economic Structure [26 Jan 2012]
France and Flexible Employment [22 Jan 2012]
Unit 2 Macro: Living below the Breadline [19 Jan 2012]
Inflation - what’s up, what’s down and what’s going to happen next [17 Jan 2012]
Unit 2 Macro: Quantitative Easing in the UK [8 Jan 2012]
Unit 2 Macro: A Jobs Boost for the US Economy [8 Jan 2012]
Unit 2 Macro: Revision Quiz on Monetary Policy [6 Jan 2012]
Unit 2 Macro: Revision Quiz on Economics of Unemployment [5 Jan 2012]
Unit 4 Macro: Video Resources on Unemployment [3 Jan 2012]
Unit 2 Macro: The UK Housing Market in 2011 [26 Dec 2011]
Unit 2 Macro: Brazil Overtakes UK in Economic Size [26 Dec 2011]
Unit 4 Macro: The Rise in Self Employment [17 Dec 2011]
Unit 2 Macro: Long Term Unemployment - A Human Story [15 Dec 2011]
Rising prices and falling real incomes [13 Dec 2011]
Unit 2 Macro: Will a Youth Jobs Subsidy Work? [30 Nov 2011]
Where is the UK Economy? National Output [22 Nov 2011]
Beyond the Bike - The Value of Money [19 Nov 2011]
Unit 2 Macro: A Prezi on Unemployment Policies [16 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Unit 4 Macro: America’s hour-glass economy [9 Nov 2011]
Unit 2 Macro: Video Clips on Unemployment [6 Nov 2011]
Australia lowers interest rate to 4.5% [1 Nov 2011]
Unit 4 Macro: Unemployment Chart Resource Download [29 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
UK Unemployment in October 2011 [12 Oct 2011]
Unit 4 Macro: Unit Labour Costs and Inflation [12 Oct 2011]
Unit 4 Macro: UK Inflation Charts [12 Oct 2011]
University Challenged [11 Oct 2011]
NMW: Classical real-wage unemployment [3 Oct 2011]
Unit 4 Macro: IMF Flags up Risks of Double Dip [20 Sep 2011]
Inflation in India [18 Sep 2011]
Unit 2 Macro: Interest Rates and Income Inequality [16 Sep 2011]
Study Note - Macroeconomic policy objectives [16 Sep 2011]
Study Note - What is Macroeconomics? [13 Sep 2011]
Monetary Policy Roundtable [25 Jul 2011]
“We need to make more stuff, using the same number of people…” [16 Jul 2011]
Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
Unit 2 Macro: Reducing Unemployment after a Recession [11 Jul 2011]
AQA ECON4 Context [20 Jun 2011]
Structural unemployment in the UK - insights for 2011 [13 Jun 2011]
A2 Macro: Consumer Spending [30 May 2011]
AS Macro Key Term: Supply-Side Policies [25 May 2011]
AQA Macro: Remember to revise inflation [25 May 2011]
AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Deflation [24 May 2011]
AS Macro Key Term: Cost Push Inflation [24 May 2011]
AS Macro Key Term: Inflation [24 May 2011]
AS Macro Key Term: Economic Recovery [23 May 2011]
AS Macro Key Term: Recession [23 May 2011]

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