New Inflation Rates

Tuesday 12^th July 2011

Circular No. National Policy 127/11/MC

To the Secretary all Branches,

Council of Executive members,

Regional Councils and Regional Offices.

Dear Colleagues,

New Inflation Rates

The Office of National Statistics has just published new inflation figures for the twelve months to June 2011.

The Retail Price Index (RPI) for this twelve monthly period is 5%, down 0.2% from the previous figure of 5.2% for the twelve months to May 2011.

The Consumer Price Index (CPI) is 4.2% for the twelve months to June 2011. This is down 0.3% from the figure for the twelve months to May 2011.

By far the largest downward pressure to the change in CPI inflation came from recreation and culture where prices, overall, fell by 0.9 per cent between May and June this year compared with a rise of 0.5 per cent between the same two months a year ago. The fall this year was a record for a May to June period. The main downward effects came from games, toys and hobbies, particularly computer games, and from audio-visual equipment and related products, where price discounting this year of items such as digital cameras, DVDs and televisions contributed to the downward movement.
There were also large downward pressures from:

• miscellaneous goods and services where prices, overall, were little changed between May and June this year compared with an increase of 0.6 per cent between the same two months a year ago. The downward effect came from a wide variety of goods and services with the largest contribution coming from insurance where premiums rose by less than a year ago
• communication, driven by telephone equipment and services, particularly mobile phone charges
• second-hand cars which fell in price this year but rose a year ago

By far the largest offsetting upward pressure to the change in CPI inflation came from food and non-alcoholic beverages where prices, overall, rose by 0.9 per cent between May and June this year but fell by 0.1 per cent between the same two months a year ago. The upward effects came from a wide range of product groups, most notably from bread and cereals, meat, and milk, cheese and eggs. In each case, prices rose this year across a range of products compared with falls a year ago.
There was also a large upward pressure from fuels and lubricants where prices fell this year by less than a year ago. Petrol pump prices fell by 0.7 pence per litre between May and June this year to stand at 135.6 pence per litre. This movement compares with a fall of 2.6 pence per litre between the same two months a year ago.

The next publication date will be 16^th August 2011.

In pay submissions the RMT will continue to emphasise that your financial commitments have increased at a much greater rate than inflation and your living standards have suffered as a result.

Yours Sincerely

Bob Crow,

General Secretary