How Is The Rate Of Inflation Worked Out...?

If Gordon Brown's saying the rate of inflation is currently running at 2.1 percent, but food prices, fuel and energy bills are rising by around 17-20 percent, how is the official figure arrived at? Surely that is manipulating the figures, isn't it? Or have I missed something? How is the inflation rate calculated?

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  • Anonymous
    1 decade ago
    Favorite Answer

    According to this site...its worked out using what they call ‘hedonistic pricing’ which is a very complex range of calculations and equations. In fact it’s so complex that nobody can actually work it out which most probably is the whole point....

    http://www.investorprofit.com/banking/bank-62.html

  • 1 decade ago

    Current Average Price level minus last year's CAP level divided by last year's CAP level multiplied by 100 will equal the Rate of Inflation.

    You take the rate of increase in consumer price index along with the rate of decrease in purchasing power and you will be able to calculate the real interest rate which runs close to the rate of inflation

    Or, go down to Walmart , see if you can still buy 5 snickers candy bars for the price of 3.

    If you can't, the inflation rate is running at about 16%.

  • 1 decade ago

    If they do it the same way as they do in the USA, they don't include energy prices or food prices in the inflation index so as to make it look like everything is going just fine and dandy.

    I don't know how they do it in the UK, but that is how it's done in the USA.

  • 4 years ago

    Just like the health of your banks, it's all lies. You know the prices you pay. You really believe someone who robs you blind like Fall 2008, and each 7 to 10 years in so-called "recession" (rich class cleaning out of working class pensions)? They think you believe everything they say - and most of those dopes do, actually.

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  • 1 decade ago

    Karen is right about 'hedonistic pricing' - here is a bit more about it

    The powers that be are given enough subjective input to get whatever answer they want.

    Like the old soviet union - the government lie, we know that they lie, they know that we know that they lie but they don't care because we let them (the worst they get is a slagging off on Y!A which they probably dont read anyway).

  • 1 decade ago

    Not sure about how they figure it but food is included in it. As for automobile gas fuel it's not included they say its not a necessity. Not sure what heat/energy is considered.

  • 1 decade ago

    i would imagine the same way governments work out anything.pure guess work, and lets face it they haven't got anything right have they, pensions, the amount of immigrants, the cost of the Olympics, so no wonder the rate they quote is farcical to the point of disbelief.

  • 1 decade ago

    In America, chief government economists hold monthly meetings at the White House They gather ‘round a big table stocked with plenty of booze, lots of really strong dope, and some cocaine to keep the lies flowing.

  • L
    Lv 7
    1 decade ago

    Good question, something i cant answer but agree that it doesnt seem logical.

  • 1 decade ago

    Seems like it's based on jelly babies to me.

    Or maybe they just think we're that thick!

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