UK Inflation Unchanged at 2.7 Per Cent

UK Inflation Unchanged at 2.7%.

The Office for National Statistics has release figures that inflation in the UK remains unchanged for the third month in a row in December at 2.7%pa.

The old measure of inflation Retail Prices Index (which does not include mortgage costs) was still higher at 3.1% and this is the real benchmark.

Our view
As you may already know, at NeedAnAdviser, we believe the Government is managing the economy to ensure inflation remains.  2.7%pa is above the government target of 2.0%pa and 3.1%pa for RPI is also over the old “trend” inflation target of 2.5%pa.

CPI is artificially low anyway at the moment as mortgage costs are cheaper at present.  This means that the real problem of inflation is still underlying and we believe set to snowball in around 5 years.

We believe the Government needs inflation to technically devalue record public sector debt over the coming years without ever repaying it.

Let’s do the numbers: If real inflation (RPI) stays at 3.1% (above trend) for the next 10 years: This is a compound increase in prices of 32% over 10 years and a repayment/devaluation of public sector debt of the same 32% without ever repaying a penny.

This country, as well as the World, needs inflation.

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