The Oil Drum: Europe

The best case scenario was if you lived at home and scrounged off your parents, in this case you may actually experience deflation (thanks to all those cheap ipods...)

The worst was if you were a pensioner, due to the very real cost of fuel costs rising.

Me?   I'm being hammered by huge increases in housing costs (relative to older folk that purchased a decade ago) especially compared to my income.  Rents around here are rising faster than the rate of inflation....
Of course Brown changed which measure of inflation he uses, to the one where housing costs are not considered.  This was to prevent house price increases from causing runaway inflation, and to prevent public sector workers from demanding payrises to pay for more expensive housing.  This (along with a multitude of other reasons) is why I'm far from impressed with our so-called "prudent" Chancellor.

I don't believe the 2% inflation figure for one second.

Plus, I have to comment on fuel duty.  Although the real cost of motoring has decreased, that's mainly due to cheap credit and cheaper cars.
The cost of FUEL has increased above the rate of inflation.  I don't see how it is fair that the Chancellor can increase his tax take on fuel pushing the total cost up beyond inflation.

Plus no one ever mentions that there is a component of tax on fuel that increases with inflation.  VAT.

In late 2003, I could buy petrol for 77p/litre.  VAT accounted for 13.475p

Now in 2006 petrol is 85p/litre.  VAT accounts for 14.875p

That's a 10% rise on VAT receipts.  In a period where inflation has supposedly been 6%  So the Chancellor has already had his inflation busting increase in VAT receipts from fuel.

The price of fuel, as mentioned, has already gone up beyond inflation.  The excuse that the treasury receives less total cash (adjusted for inflation) because there has not been inflation increases on (fixed) fuel duty just will not wash with the public.  Especially considering the vast increases of Stamp Duty receipts, North Sea revenues and VAT recipes on home fuel (5% of a 30% rise in consumer costs).

Nope, Gordon has massively increased tax take, and we've got little to nothing to show for it.  Especially as most of our new schools/hospitals are now PFI, which is the government equivalent of buying it on a credit card and only paying the interest charges.  

Not impressed

Andy