How to evaluate the reliability of economic data?


Readers Question: how to evaluate the reliability of economic data? This is a good question. In brief, some issues to consider Is there a political angle? – Political leanings of media/think tank In what context is the data presented? How to interpret the data. Should we look at nominal data, real data or as a …

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UK Inflation Rate and Graphs

Current UK Inflation Rate

  • CPI inflation rate:  3.1% (headline rate) CPI – D7G7 at ONS
  • (page updated 17 Dec 2017)

Other measures of inflation

  • (CPIH) CPI including owner occupiers’ housing costs – 2.8% (CPIH – L550)
  • RPI – 3.9% (Nov 2017)
  • Factory gate prices (Output prices) 3.3% June 2017 (output prices) ONS
  • See: Measures of inflation

Cost-push inflationary factors

In 2017, UK has seen a rise in cost-push inflationary pressures. This has caused a spike in inflation, despite relatively weak economic growth. Cost-push inflationary factors have come from:

  • Devaluation in Sterling. This makes imports more expensive and has fed through into higher input prices for manufacturers.
  • Rise in petrol prices in early part of 2017.
  • Rise in food and recreational goods.

What factors are affecting current inflation rates?

UK inflation post-war

Despite temporary cost-push inflationary factors in 2017, underlying inflationary pressures remain muted – at least compared to the past four decades.

The current UK inflation rate compares favourable to much of the post-war period. The 1970s frequently saw double digit inflation (due to global inflationary pressures from rising oil prices + wage growth). In 2017, the annual CPI is just above the inflation target of 2%.

This is due to:

  • Low worldwide inflationary expectations. Europe is experiencing very low rates of inflation.
  • Fall in global inflation rates since 2007.
  • Supermarket price wars, with big chains, such as Tesco and Sainsbury attempting to maintain market share from Pound Shops and discounters like Lidl.
  • Weaker commodity price growth.
  • Fiscal austerity – many government departments still seeing spending squeezed. In particular public sector pay restraint of 1% has reduced real wages for public sector workers.
  • Private sector wage growth still weak. This has limited costs of firms and limited growth in aggregate demand.
  • Potential negative output gap, with real GDP still around 10-15% below pre-crisis trend rate.

Inflation and wages

  • Real wages = nominal wages – inflation.
  • Usually, during a period of economic growth – wage growth is higher than inflation, this leads to positive real wage growth.
  • During the economic recession of 2009-13 – we had a prolonged period of negative real wage growth. Wages rising at a slower rate than inflation.
  • The end of 2014 saw the first signs of renewed wage growth and positive real wage growth.

inflation-wagesSince 2017, the trend of negative real wage growth has resumed. This low nominal wage growth is one of the major costs of inflation rate of 3%.

See more at UK wage growth

Inflation since 1990


  • Inflation rose over 8% in the late 1980s due to the Lawson boom, which was a period of unsustainable economic growth.
  • Inflation was low in the period 1992 to 2007. This was a period known as the ‘great moderation’
  • The inflation of 2008 and 2012 was due to cost-push factors (devaluation and rising commodity prices)

Read moreUK Inflation Rate and Graphs

UK Unemployment Stats and Graphs

UK unemployment-rate

A selection of graphs and statistics on UK unemployment. Also, looking at factors that explain UK unemployment and why unemployment has fallen in recent years.


Raw data:  Labour market data | Source: ONS MGSX (LFS)

Current UK Unemployment rate

  • Unemployment rate of 4.3%, (Oct 2017) –  (UK Unemployment at ONS)
  • 1.45 million unemployed people. (ONS)

Employment rates

  • Employment rate: 75.3% (proportion of people aged 16-64 in work) – ONS
  • Employment:  32.136 million people in work.

Participation rate

  • Inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) – 21.2% or 8.7 million. (ONS)
  • See also: Participation rates

Read moreUK Unemployment Stats and Graphs

UK Housing Market

A look at the main UK housing market data.

  1. House prices
  2. Affordability of housing
  3. Interest rates
  4. Supply of housing

House price inflation


Nationwide data

  • Annual house price inflation running at 5.3% in Q1 2016
  • London showed strongest housing market with prices rising more than other areas.
  • Price of a typical home is £198,564 (Q1 2016)

UK House prices in past few decades


  • In 1969, average house prices were: £4,312
  • In 1975, average house prices were: £10,388.
  • In 1980, average house prices were: £22,676
  • In 2016, average house prices are: £198,564.

Read moreUK Housing Market

EU inflation and deflation

eurozone inflation

The Eurozone inflation rate is 0.4% (ECB database)  (Sept 2014) Eurozone HCIP inflation rate HCIP (Harmonized consumer index prices) Source:| (ECB Inflation graphs, sometimes a few months outdated) Food inflation Food inflation is currently negative. Food inflation tends to be one of the most volatile components. This negative food inflation is one factor reducing the …

Read moreEU inflation and deflation

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