Increase in Inflation recently?

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The whole reason inflation is being played down is because overindebted government's need to keep borrowing at ultra low interest rates. The Irish government had to pay slightly more interest rates last week in their last bond auction.That's the real issue how does the ecb retract from quantitative easing and allow the normal bond markets to function normally?
 
I don't really have a view on whether it is played down or not
When things open up more after Covid and retailers start to replace existing stock and start passing on the large increases we will see problems with Inflation,
many retailers will have cash flow problems who give credit terms, such as hardware stores and building suppliers, I expect to see price Increase more than inflation to cover losses on Items sold on credit ,
 
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Different countries as far as I know have varying methods by which they measure inflation. Ireland may have high inflation while someone in a country beside us have a lower rate. You'd wonder at times about the reality of it all.
 
No, that’s the whole point of monetary policy these days.

Get inflation ahead of interest rates.

e.g. borrow €30bn in 2011 to backstop Anglo Irish Bank, and repay it in 2040.

€30bn then is less than €30bn now.
 

Gordon Gekko said:
No, that’s the whole point of monetary policy these days.

Get inflation ahead of interest rates.

e.g. borrow €30bn in 2011 to backstop Anglo Irish Bank, and repay it in 2040.

€30bn then is less than €30bn now.
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But inflation never went negative like interest rates did, there was always positive inflation ? Is monetary policy really about inflation at all , until it really is about inflation. Joe Biden has let the genie out of the bottle and he has unleashed inflation, it's back to 1970s , the oil price is on a tear and nothing sparks inflation like the oil price, it never went away you know. Oil consumption will be back above 100 million barrels per day next year resuming its long-term upward trajectory. Biden will bookend his political career with another 1970s style inflationary spiral
 
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noproblem said:
Different countries as far as I know have varying methods by which they measure inflation. Ireland may have high inflation while someone in a country beside us have a lower rate. You'd wonder at times about the reality of it all.
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Yes,
Take a look at The way the USA measure inflation,
I don't know about Ireland Some Countries measure
Gross Domestic Purchase price Index featured/ measure of Inflation in their economy
The Index measures the price of goods and services purchased by their residents regardless of where the goods and services were produced

It Shows Quarterly Percent Change from Preceding Quarter
There is a built-in released every Month showing a % of Inflation Deflation each month until the next Quarter in published,

Seeing Ireland is in the EU it may not be as easy to Measure, but Ireland should be publishing a monthly guide to Inflation/deflation in there Economy,
 
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Gordon Gekko said:
No, that’s the whole point of monetary policy these days.

Get inflation ahead of interest rates.

e.g. borrow €30bn in 2011 to backstop Anglo Irish Bank, and repay it in 2040.

€30bn then is less than €30bn now.
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It just doesn't work that way when you dont have control of your own currency, i.e are in the eurozone. The ECB's monetary policy objective is price stability; not bailing out overborrowed member states.

Ireland had negative inflation (i.e negative annual CPI) in 2009 (-4/5%), 2010 (-1.0%), 2015 (-0.3%) and 2002 (-0.3%) and zero inflation in 2016. The last time our inflation exceeded the ECB's 2% target rate was in 2011 (2.6%, but this was after two years of negative inflation). (http://www.cso.ie).
The eurozone HICP is currently 1.6% so it is doubtful if there is any pressure on the ECB to increase interest rates in the short term.
 
But there is no real breakdown of which sectors in the Irish Economy led to deflation in 2009/2010 that I can see and who gained lost as a result,
 
PMU said:
It just doesn't work that way when you dont have control of your own currency, i.e are in the eurozone. The ECB's monetary policy objective is price stability; not bailing out overborrowed member states.
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But is that not what the ecb's policy is on the surface, initially that was the strategy followed by trichet he followed the euro rule book to the letter and almost collapsed the euro during the financial crisis . Since draghi took over they changed tact then they eased monetary policy in order to keep the over indebted countries on board . As you rightly pointed out Irish inflation does not count but German inflation has spiked up now, are the ecb going to rush in to quench the flames of German inflation ? That is the test but I doubt it because I believe the over borrowed member States are now wagging the tail of the ecb. Lagarde is a liberal anyway she is not a technocrat but a quasi politician so that's where she will sway.
 
kinnjohn said:
Seeing Ireland is in the EU it may not be as easy to Measure, but Ireland should be publishing a monthly guide to Inflation/deflation in there Economy,
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Might I suggest you look at the CSO website. They are the authority responsible for collecting price statistics. These figures are reported regularly - monthly no less

kinnjohn said:
But there is no real breakdown of which sectors in the Irish Economy led to deflation in 2009/2010 that I can see and who gained lost as a result,
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Again the CSO publish detailed info on the components of the CPI/HICP.

Would the 234 difference series do you?


As for winners and losers in 2010- very subjective

Biggest decreases related to mortgage payments - this likely reflects collapse in house prices.

Biggest increase in prices - health insurance and third level education.

I don't remember either homeowners or students being classed as winners back then.
 
Thanks, skrooge
I think people pick up inflation away faster than the above reports for some reason,
For the last few months I know there is a big increase in building and material supplies I don't see it reported on any website so far,

It is news to me that your Mortgages goes down when your house price collapse how did you come up with that,Must be in the 234 difference series you found it in

Most students and their parents were winners back then rents fell, buy to let owner/landlord lost the most landlords with no mortgage may not have lost as much, is their detail/reports showing the different type of landlords,

One I was wondering about is if they reform taxing company profits to where most of their sales are made will it drive up inflation, in other words, will the consumer finish up paying the extra tax on the items bought,
 
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kinnjohn said:
For the last few months I know there is a big increase in building and material supplies I don't see it reported on any website so far,
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In addition to the CSO website might I recommend you broaden your horizons to include RTE

Concern at impact of increased building materials costs

amp.rte.ie

kinnjohn said:
It is news to me that your Mortgages goes down when your house price collapse how did you come up with that,Must be in the 234 difference series you found it in
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You need to stop and think what the CSO are trying to measure. What you have in your mind is not inflation in the the strictest definition.

The CPI measures the price of transactions for a given month. The cost of buying a house moves in line with prices. Existing homeowner's/mortgage holders are not included as they are not new transactions. You could argue remortgaging should be in there (and maybe they are) but they are dwarfed by the scale of new purchases in any month.


kinnjohn said:
Most students and their parents were winners back then rents fell, buy to let owner/landlord lost the most landlords with no mortgage may not have lost as much, is their detail/reports showing the different type of landlords,
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A very property-related/blinkered view on things - the rate of youth unemployment was between 25%-33% in 2010 - you could hardly class that as winning.
 
kinnjohn said:
For the last few months I know there is a big increase in building and material supplies I don't see it reported on any website so far,
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There has been widespread reporting of rises in building materials costs.
 
kinnjohn said:
One I was wondering about is if they reform taxing company profits to where most of their sales are made will it drive up inflation, in other words, will the consumer finish up paying the extra tax on the items bought,
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Your query is really about the incidence of taxation, as in who actually pays a tax.

Who pays the higher excise on tobacco?

The tobacco company send the payment to Revenue, but the customer actually pays the tax.


Who pays CT? That is a good question.

It is one or more of:

(1) staff
(2) customers
(3) shareholders
 
Protocol
Reform of Corporation tax that leads to an increase in taxation will hit all companies and Countrys at the same time, for each country to get its fair share of CT tax will have to be linked to the location item is sold in, the question is will this lead to inflation,
There is a good chance CT tax increases will finish up being built into the costing from now on as part of the tax reform,
 
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You are presuming that retail prices are affected by CT rates.

When Trump cut CT from 35% to 21% in 2018 in the USA, did that lead to falls in consumer prices?

I don't think so.

The UK has cut CT several times over the last few years, from 30% to about 20%.

I never read anything to suggest that might cause less inflation.
 
I had a look at the cso inflation statistics for 2020 and 2021 @Protocol it shows that it actually went slightly negative in 2020 -0.46% and only 1.6% so far this year. It seems curiously low in comparison to other countries, big spike in inflation in UK , US and Germany now over 4 % in some cases. Also the curious negative inflation here in 2020 did not happen in either of these countries , they still had positive inflation rates. Can you explain why is this ? What is different about Ireland that we are avoiding inflation even though employers in many cases cannot get employees for lower paid jobs and the oil price has spiked?
 
Protocol
I don't want to take tread off course
would the result be the same if they insisted CT went up another 5% extra and this 5% has to be forwarded on to another country where their product finally sold they would have to put systems in place to catch the extra CT the easiest way is to build CT into the price,
The question is would they have take a hit on the 5% tax or passed the extra tax on to the final customer,
 
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I'd be careful looking too closely at the cross-country comparisons over the last 18 months. Lockdowns at various different times in different countries might explain some of the difference.
 
Lots of lower-paid jobs In Ireland are about to get pay increases Child care just to name one will have a knock-on effect on other areas,
More Regulations means what once was a low-paid job is now a specialist job commanding higher pay, and getting higher by the day,
 
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