The Deflation Lie

Deflation returns to Britain for first time since 1960 | Business | guardian.co.uk

Deflation returned to Britain for the first time in nearly five decades last month as prices measured by the retail price index (RPI) were lower than the same time a year ago.

The Office for National Statistics said the RPI was 0.4% lower in March than it had been in March 2008. That was the first negative reading since March 1960, when Harold Macmillan was prime minister and John F Kennedy was running for the US presidency.

This may be true if you drive a car and pay a mortgage but the deflation figures published in the UK today are sheer bunkum for the poor.

Here's why.

*Food. General food inflation is still rising, but hidden in those figures, and explaining why supermarkets are making mega profits is that the "low-end" non-branded items on which low income people were already relaying have shot up in price by 20-30%.

This is from my experience of ASDA

Tomatoes: up from 55p to 88p over the year
ASDA Butter: up from 67p to 87p over the year.
Mincemeat: up by about 20%
A Can of Tuna: 33p to 48p
Rice: 55p to 88p

[Canned tuna, brown rice, and onions is a cheap nutritious meal - but it has doubled in price.]

*Gas and Electricity
Southern Electric raised prices by around 40% last year, and reaped profit over the winter, even as oil market prices plummeted.

*Bus Fares. First Group in Manchester has increased the Fare from where I live to the Town center from 1.20 to 1.50.

For people living on low incomes virtually our expenses are on food, fuel, and bus travel. There is no way these costs have gone down over the past year, In fact there has been more like an 8-12% increase.

There is no evidence that the Labour government is offering anywhere near enough help.