Ignore the RPI – it is just reflecting the huge cuts in interest rates. Although it is the rate that matters from the point of view of many contracts, for once we should examine Mr Brown’s chosen rate of the CPI.
It is obstinately still at 3%. The authorities should not be surprised. That is the price of falling sterling, which we will see reflected to some extent in rising prices, despite the general gloom and the discounting. For once CPI is giving a more meaningful impression of inflation than the RPI.