There's nothing to say about the inflation data out this morning from the ONS, about which they said:
- The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to September 2025, unchanged from August.
- On a monthly basis, CPI was unchanged in September 2025, as in September 2024.
- Transport made the largest upward contribution to the monthly change in CPI annual rates; recreation and culture, and food and non-alcoholic beverages made the largest offsetting downward contributions.
- Core CPI (CPI excluding energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to September 2025, down from 3.6% in the 12 months to August; the CPI goods annual rate rose slightly from 2.8% to 2.9%, while the CPI services annual rate was unchanged in September, at 4.7%.
Inflation has plateaued. It might fall in the next few months.
And given wage and benefit rises are broadly matching inflation right now, there is no cause to panic about what is happening.
The only real question is: given that this is not an issue, why is the economy being punished for the sake of an arbitrary 2% inflation target that was set for reasons no one now understands?
A video is coming out on that tomorrow, unless plans change in the meantime.
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Two percent = moot percent.
Agreed.
Might an answer to the question about the economy being punished for the sake of an arbitrary 2% inflation target include any of the following?
1) The illeducated emotional appeal of definite numbers
2) The wish of a power elite to depress the regular citizenry into subsevience
3) A “punished” economy largely affects the not wealthy and benefis rentiers, great and small
4) Our governments have a big problem in admitting that they have made mistakes
5) A lack of a really analytical and reasonably objective main stream media, not least the B.B.C.
6) The delusive appeal of a fixed data figure when the context is better served by data of a flexible range type, usually connected to a set of affecting factors
Yes
Inflation at 3.5% food 3.8% and. People moaning about pensioners being better off by 0.5 and 0.2% better off next April!
Having got my first job in the late 70’s, I just can’t get my head around this panic over missing an invented 2% inflation target and wrecking the country in pretended pursuit of it.
Ther’s a Monty Python sketch of some Yorkshire men swapping horror stories about how poor they were when they were younger.
https://m.youtube.com/watch?v=VAdlkunflRs
I find myself rewriting the script…
“Eeh lad, call 3.8% inflation? When Ah were a lad, we’d a been grateful for 3.8%. Them oil sheiks were ‘aving a reet laugh then, it were 25% in ma day – we were that busy in’t shop, putting new price labels up ivvery 5 minutes, there were ‘ardly time to serve ‘t customers.”
and so on…
🙂
You have “rose by” a couple of times when it should read “rose to”!
No, I haven’t.
The ONS has.
A cost of living crisis is when broad remuneration is going up less than inflation. A cost of living problem is when pay/bennies are rising just less than inflation. We’ve now got the averages matching. We declare the cost of living crisis at the aggregate level over.
Let’s party
It doesn’t mean anything to me any more. Totally ignores the bills that will decide how people will vote next time. Pointless. As I said in a post yesterday, cause and effect. CPI ignores the effect of real inflation on people’s lives, like rent increases, water increases, etc… For most people, the most important inflation figure is their own personal level of inflation, in relation to their income. Do politicians understand this?
No, in a word
Inflation control is important but arbitrary targets are a poor idea.
As Goodhart said “When a measure becomes a target, it ceases to be a good measure”
… or, in this case, obsessing about the deckchair arrangements on the Titanic when there are other things to worry about is foolish. Better we focus on avoiding the icebergs and we may find that the deckchairs sort themselves out.
The UK does have an inflation problem – it will have the highest rate of major economies in 2025 and historically, it always has – but the idea that high interest rates are the best/only solution is absurd.
So, what are the icebergs?
Brexit. We need to (at least) rejoin the Single Market.
“Inflation plus” price increase formulae. Eliminate them in government controlled areas – or entirely if possible.
….oh, there are more and I am sure other commentators will contribute.
See tomorrow’s video