GOOD NEWS ON INFLATION: WELL, MAYBE

It’s always nice to have some good news on the economic front and today there was good news on inflation. The “favoured” CPI measure fell in June to 4.2%, having been expected to be 4.5%.

However, behind the headlines are some interesting facts. Weak retail sales have caused heavy discounting in some sectors; for example the price of video cameras fell, according to the BBC news today.

Whoa! Video cameras? I haven’t bought one of those for a few years; especially now that I have a smartphone that takes pictures, in common with about 75% of the population. Even back then, a video camera was hardly a regular and certainly not an essential purchase.

So how come video cameras apparently found their way into the “basket” of items on whose prices the politically-important inflation rates are calculated?

Answers on a postcard, please.

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