Wealth of Households and Nonprofit Organizations Recovering In Second Quarter 2020 by Growing 7.0 Percent Inflation Adjusted Above Levels Relative to First Quarter 2020 and Equal in Inflation Adjusted Levels Relative to Fourth Quarter 2019, Financial Assets and Real Estate Lead Wealth Recovery, World Inflation Waves, Destruction of Household Nonfinancial Wealth with Cyclically Stagnating Total Real Wealth in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, World Cyclical Slow Growth, and Government Intervention in Globalization: Part VII

 

Carlos M. Pelaez

 

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.

 

I World Inflation Waves

            IA Appendix: Transmission of Unconventional Monetary Policy

IB1 Theory

IB2 Policy

IB3 Evidence

IB4 Unwinding Strategy

IC United States Inflation

IC Long-term US Inflation

ID Current US Inflation

IE Theory and Reality of Economic History, Cyclical Slow Growth Not Secular Stagnation and Monetary Policy Based on Fear of Deflation

IIB Destruction of Household Nonfinancial Wealth with Stagnating Total Real Wealth in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide

III World Financial Turbulence

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

 

 

 

 

Unconventional monetary policy of zero interest rates and quantitative easing has been used in Japan and now also in the US. Table IV-5A provides the consumer price index of Japan, with inflation of 0.2 percent in 12 months ending in Aug 2020 and 0.2 percent NSA (not-seasonally-adjusted) in Aug 2020. There are revisions with a new base of 2015. The increase of the tax on value added of consumption on Apr 1, 2014, was the driver of CPI inflation in Japan in Apr-May 2014. Inflation of consumer prices in the first three months of 2013 annualizes at 0.4 percent NSA. Inflation in Mar-Dec 2013 not seasonally adjusted annualizes at 1.9 percent. There are negative percentage changes in most of the 12-month rates in 2011 with the exception of Jul and Aug both with 0.2 percent and stability in Sep. All 12-month rates of inflation in the first five months of 2013 are negative. Inflation in the 12 months ending in Jun 2013 was 0.2 percent and 0.7 percent in the 12 months ending in Jul 2013. Inflation increased to 0.9 percent in the 12 months ending in Aug 2013 and 1.1 percent in the 12 months ending in Sep 2013. Inflation was 1.1 percent in the 12 months ending in Oct 2013 and 1.5 percent in the 12 months ending in Nov 2013. Inflation was 1.6 percent in the 12 months ending in Dec 2013 and 1.4 percent in the 12 months ending in Jan 2014. Inflation was 1.5 percent in the 12 months ending in Feb 2014 and 1.6 percent in the 12 months ending in Mar 2014. Inflation was 3.4 percent in the 12 months ending in Apr 2014 and 3.7 percent in the 12 months ending in May 2014, mostly because of the increase in the sales tax. Inflation in 12 months ending in Mar 2015 was 2.3 percent, decreasing to 0.6 percent in the 12 months ending in Apr 2015 and 0.4 percent in the 12 months ending in May 2017. Inflation in 12 months ending in Jun was 0.4 percent and 0.4 percent in the 12 months ending in Jul 2017. Inflation in the 12 months ending in Aug 2017 was 0.7 percent. Inflation in the 12 months ending in Sep 2017 was 0.7 percent. Inflation in the 12 months ending in Oct 2017 was 0.2 percent and 0.6 percent in the 12 months ending in Nov 2017. Inflation rose to 1.0 percent in the 12 months ending in Dec 2017, increasing to 1.4 percent in the 12 months ending in Jan 2018. Inflation increased to 1.5 percent in the 12 months ending in Feb 2018. Consumer prices increased 1.1 percent in the 12 months ending in Mar 2018. The consumer price index increased 0.6 percent in the 12 months ending in Apr 2018. Consumer prices increased 0.7 percent in the 12 months ending in May 2018. The consumer price increased 0.7 percent in the 12 months ending in Jun 2018. Consumer prices increased 0.9 percent in the 12 months ending in Jul 2018. The consumer price index increased 1.3 percent in the 12 months ending in Aug 2018. Consumer prices increased 1.2 percent in the 12 months ending in Sep 2018. The consumer price index increased 1.4 percent in the 12 months ending in Oct 2018. Consumer prices increased 0.8 percent in the 12 months ending in Nov 2018. The consumer price index increased 0.3 percent in the 12 months ending in Dec 2018. Consumer prices increased 0.2 percent in the 12 months ending in Jan 2019. The consumer price index increased 0.2 percent in the 12 months ending in Feb 2019. Consumer prices increased 0.5 percent in the 12 months ending in Mar 2019. The consumer price index increased 0.9 percent in the 12 months ending in Apr 2019. Consumer prices increased 0.7 percent in the 12 months ending in May 2019. The consumer price index increased 0.7 percent in the 12 months ending in Jun 2019. Consumer prices increased 0.5 percent in the 12 months ending in Jul 2019. The consumer price index increased 0.3 percent in the 12 months ending in Aug 2019. The consumer price index increased 0.2 percent in the 12 months ending in Sep 2019. Consumer prices increased 0.2 percent in the 12 months ending in Oct 2019. The consumer price index increased 0.5 percent in the 12 months ending in Nov 2019. Consumer prices increased 0.8 percent in the 12 months ending in Dec 2019. The consumer price index increased 0.7 percent in the 12 months ending in Jan 2020. Consumer prices increased 0.4 percent in the 12 months ending in Feb 2020, increasing 0.4 percent in the 12 months ending in Mar 2020. Consumer prices increased 0.1 percent in the 12 months ending in Apr 2020. The consumer price index increased 0.1 percent in the 12 months ending in May 2020. Consumer prices increased 0.1 percent in the 12 months ending in Jun 2020. The consumer price index increased 0.3 percent in the 12 months ending in Jul 2020. Consumer prices increased 0.2 percent in the 12 months ending in Aug 2020. There are eleven years of deflation, three of zero inflation and eleven of inflation in the annual rate of inflation from 1995 to 2019. This experience is entirely different from that of the US that shows long-term inflation. There is only one annual negative change of the CPI all items of the US in Table IV-5A, minus 0.4 percent in 2009 but following 3.8 percent in 2008 because of carry trades from policy rates moving to zero in 2008 during a global contraction. Carry trades were reversed because of risk aversion in late 2008 and early 2009, causing decreasing commodity prices. Inflation is currently low in the US and worldwide primarily because of the collapse of commodity prices in reversal of carry trades induced by zero interest rates. Both the US and Japan experienced high rates of inflation during the US Great Inflation of the 1970s (see http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html  and Appendix I The Great Inflation; see Taylor 1993, 1997, 1998LB, 1999, 2012FP, 2012Mar27, 2012Mar28, 2012JMCB, http://www.johnbtaylor.com/ http://cmpassocregulationblog.blogspot.com/2017/01/rules-versus-discretionary-authorities.html and earlier http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html). It is difficult to justify unconventional monetary policy because of risks of deflation similar to that experienced in Japan. Fear of deflation as had occurred during the Great Depression and in Japan was used as an argument for the first round of unconventional monetary policy with 1 percent interest rates from Jun 2003 to Jun 2004. The 1 percent interest rate combined with quantitative easing in the form of withdrawal of supply of 30-year securities by suspension of the auction of 30-year Treasury bonds with the intention of reducing mortgage rates. For fear of deflation, see Pelaez and Pelaez, International Financial Architecture (2005), 18-28, and Pelaez and Pelaez, The Global Recession Risk (2007), 83-95. The financial crisis and global recession were caused by interest rate and housing subsidies and affordability policies that encouraged high leverage and risks, low liquidity and unsound credit (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 157-66, Regulation of Banks and Finance (2009b), 217-27, International Financial Architecture (2005), 15-18, The Global Recession Risk (2007), 221-5, Globalization and the State Vol. II (2008b), 197-213, Government Intervention in Globalization (2008c), 182-4). Several past comments of this blog elaborate on these arguments, among which: http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html http://cmpassocregulationblog.blogspot.com/2011/01/professor-mckinnons-bubble-economy.html http://cmpassocregulationblog.blogspot.com/2011/01/world-inflation-quantitative-easing.html http://cmpassocregulationblog.blogspot.com/2011/01/treasury-yields-valuation-of-risk.html http://cmpassocregulationblog.blogspot.com/2010/11/quantitative-easing-theory-evidence-and.html http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.htm

Table IV-5A, Japan, Consumer Price Index, All Items ∆%

	∆% Month NSA	∆% 12-Month NSA
Aug 2020	0.2	0.2
Jul	0.1	0.3
Jun	-0.1	0.1
May	0.0	0.1
Apr	-0.1	0.1
Mar	0.0	0.4
Feb	-0.2	0.4
Jan	-0.1	0.7
Dec 2019	0.0	0.8
Nov	0.1	0.5
Oct	0.3	0.2
Sep	0.1	0.2
Aug	0.3	0.3
Jul	-0.1	0.5
Jun	-0.1	0.7
May	0.0	0.7
Apr	0.3	0.9
Mar	0.0	0.5
Feb	0.0	0.2
Jan	0.1	0.2
Dec 2018	-0.3	0.3
Nov	-0.3	0.8
Oct	0.3	1.4
Sep	0.1	1.2
Aug	0.5	1.3
Jul	0.1	0.9
Jun	-0.1	0.7
May	0.1	0.7
Apr	-0.1	0.6
Mar	-0.3	1.1
Feb	0.0	1.5
Jan	0.1	1.4
Dec 2017	0.3	1.0
Nov	0.4	0.6
Oct	0.0	0.2
Sep	0.2	0.7
Aug	0.2	0.7
Jul	-0.2	0.4
Jun	-0.1	0.4
May	0.1	0.4
Apr	0.4	0.4
Mar	0.1	0.2
Feb	-0.1	0.3
Jan	-0.2	0.4
Dec 2016	-0.2	0.3
Nov	0.0	0.5
Oct	0.6	0.1
Sep	0.2	-0.5
Aug	0.0	-0.5
Jul	-0.2	-0.4
Jun	-0.1	-0.4
May	0.1	-0.5
Apr	0.2	-0.3
Mar	0.1	0.0
Feb	0.1	0.2
Jan	-0.3	-0.1
Dec 2015	0.0	0.2
Nov	-0.4	0.3
Oct	0.0	0.3
Sep	0.1	0.0
Aug	0.1	0.2
Jul	-0.2	0.2
Jun	-0.2	0.4
May	0.2	0.5
Apr	0.5	0.6
Mar	0.3	2.3
Feb	-0.2	2.2
Jan	-0.2	2.4
Dec 2014	0.1	2.4
Nov	-0.4	2.4
Oct	-0.3	2.9
Sep	0.2	3.2
Aug	0.2	3.3
Jul	0.0	3.4
Jun	-0.1	3.6
May	0.4	3.7
Apr	2.1	3.4
Mar	0.3	1.6
Feb	0.0	1.5
Jan	-0.2	1.4
Dec 2013	0.1	1.6
Nov	0.0	1.5
Oct	0.1	1.1
Sep	0.3	1.1
Aug	0.3	0.9
Jul	0.2	0.7
Jun	0.0	0.2
May	0.1	-0.3
Apr	0.3	-0.7
Mar	0.2	-0.9
Feb	-0.2	-0.7
Jan	0.1	-0.3
Dec 2012	0.0	-0.1
Nov	-0.4	-0.2
Oct	0.0	-0.4
Sep	0.1	-0.3
Aug	0.1	-0.4
Jul	-0.3	-0.4
Jun	-0.5	-0.2
May	-0.3	0.2
Apr	0.1	0.4
Mar	0.5	0.5
Feb	0.2	0.3
Jan	0.2	0.1
Dec 2011	0.0	-0.2
Nov	-0.6	-0.5
Oct	0.1	-0.2
Sep	0.0	0.0
Aug	0.1	0.2
Jul	0.0	0.2
Jun	-0.2	-0.4
May	0.0	-0.4
Apr	0.1	-0.4
Mar	0.3	-0.5
Feb	0.0	-0.5
Jan	-0.1	-0.6
Dec 2010	–0.3	0.0
	CPI All Items USA	CPI All Items Japan
Annual
2019	1.8	0.5
2018	2.4	1.0
2017	2.1	0.5
2016	1.3	-0.1
2015	0.1	0.8
2014	1.6	2.7
2013	1.5	0.4
2012	2.1	0.0
2011	3.2	-0.3
2010	1.6	-0.7
2009	-0.4	-1.4
2008	3.8	1.4
2007	2.8	0.0
2006	3.2	0.3
2005	3.4	-0.3
2004	2.7	0.0
2003	2.3	-0.3
2002	1.6	-0.9
2001	2.8	-0.7
2000	3.4	-0.7
1999	2.2	-0.3
1998	1.6	0.6
1997	2.3	1.8
1996	3.0	0.1
1995	2.8	-0.1
1994	2.6	0.7
1993	3.0	1.3
1992	3.0	1.6
1991	4.2	3.3
1990	5.4	3.1
1989	4.8	2.3
1988	4.1	0.7
1987	3.6	0.1
1986	1.9	0.6
1985	3.6	2.0
1984	4.3	2.3
1983	3.2	1.9
1982	6.2	2.8
1981	10.3	4.9
1980	13.5	7.7
1979	11.3	3.7
1978	7.6	4.2
1977	6.5	8.1
1976	5.8	9.4
1975	9.1	11.7
1974	11.0	23.2
1973	6.2	11.7
1972	3.2	4.9
1971	4.4	6.3

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.html

https://www.bls.gov/cpi/data.htm

 

Annual percentage changes of the CPI of Japan and individual segments are in Table IV-5B. In 2015, the CPI of all items increased 0.8 percent and 0.5 percent excluding fresh food. The CPI excluding food, alcoholic beverages and energy increased 1.0 percent. The CPI of fuel, light and water charges decreased 2.6 percent. In 2016, the CPI of all items decreased 0.1 percent and decreased 0.3 percent excluding fresh food. The CPI excluding food, alcoholic beverages and energy increased 0.3 percent. The CPI of fuel, light and water charges decreased 7.3 percent. The CPI of all items increased 0.5 percent in 2017. The CPI excluding fresh food and energy increased 0.1 percent. The CPI of fuel, light and water increased 2.7 percent. The CPI of all items increased 1.0 percent in 2018. The CPI excluding fresh food and energy increased 0.4 percent. The CPI of fuel, light and water charges increased 4.0 percent. The CPI of all items increased 0.5 percent in 2019. The CPI excluding fresh food and energy increased 0.6 percent. The CPI of fuel, light and water charges increased 2.3 percent.

Table IV-5B, Japan, Consumer Price Index, ∆%

Annual	Year ∆% 2015	Year ∆% 2016	Year ∆% 2017	Year ∆% 2018	Year ∆% 2019
CPI All Items	0.8	-0.1	0.5	1.0	0.5
CPI Excluding Fresh Food	0.5	-0.3	0.5	0.9	0.6
CPI Excluding Food, Alcoholic Beverages and Energy	1.0	0.3	0.1*	0.4*	0.6*
CPI Goods	0.8	-0.6	0.9	1.7	0.7
CPI Services	0.8	0.3	0.0	0.3	0.3
CPI Excluding Imputed Rent	1.0	-0.1	NA	NA	NA
CPI Fuel, Light, Water Charges	-2.6	-7.3	2.7	4.0	2.3
CPI Transport & Communications	-1.9	-2.0	0.3	1.4	-0.7

*All items less fresh food and energy

Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.htm

Chart IV-1A of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the major consumer price indexes of Japan on an annual basis. There is inflexion of the trend of decline of the index of all items and the index of all items excluding fresh food in 2013 and 2014 with stability/decreases into 2016. Prices increased in 2017 and in 2018-2019.

 Chart IV-1A, Japan, Consumer Price Index All Items, Consumer Price Index All Items Less Fresh Food and Consumer Price I ndex All Items Less Food, Alcoholic Beverages and Energy, Annual, 2007-2019

Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.htm

Chart IV-2A of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides annual percentage changes of the consumer price index all items, excluding fresh food and excluding food, alcoholic beverages and energy. The indexes of all items and excluding fresh food increased in 2014 and 2015 with decreases in 2016. Prices increased in 2017 and increased in 2018-2019.

Chart IV-2A, Japan, Consumer Price Index, Percentage Changes Relative to Prior Year, 2007-2019

Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.htm

Japan’s Statistics Bureau of the Ministry of Internal Affairs and Communications provides the consumer price index for all items and regions of Japan monthly from 1971 to 2013 with 2010=100, shown in Chart IV-3A. There was inflation in Japan during the 1970s and 1980s similar to other countries and regions. The index shows stability after the 1990s with sporadic cases of deflation. Slower growth with sporadic inflation has been characterized as a “lost decade” in Japan (see Pelaez and Pelaez, The Global Recession Risk (2007), 82-115).

Chart IV-3A, Japan, Consumer Price Index All Items, All Japan, Index 2010=100, Monthly, 1970-2013

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.htm

Chart IV-4A of the US Bureau of Labor Statistics provides the US consumer price index NSA from 1913 to 2020. The dominating characteristic is the increase in slope during the Great Inflation from the middle of the 1960s through the 1970s. There is long-term inflation in the US and no evidence of deflation risks.

Chart IV-4A, US, Consumer Price Index, NSA, 1913-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm

Chart IV-5A provides 12-month percentage changes of the consumer price index for all items and regions of Japan monthly from 1971 to 2013. Japan experienced the same inflation waves of the United States during the Great Inflation of the 1970s followed by similar low inflation after the inflation-control increase of interest rates in the early 1980s. Numerous cases of negative inflation or deflation are observed after the 1990s.

Chart IV-5A, Japan, CPI All Items, All Japan, 12-Month ∆%, 1971-2013

Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.htm

Chart IV-5AB provides the 12-month percentage changes of the US consumer price index from 1914 to 2020. There are actually three waves of inflation in the second half of the 1960s, in the mid-1970s and again in the late 1970s. Table IV-5AB provides similar inflation waves in the economy of Japan with 11.7 percent in 1973, 23.2 percent in 1974 and 11.7 percent in 1975. The Great Inflation of the 1970s is analyzed in various comments of this blog (http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html and in Appendix I The Great Inflation; see Taylor 1993, 1997, 1998LB, 1999, 2012FP, 2012Mar27, 2012Mar28, 2012JMCB, http://www.johnbtaylor.com/ http://cmpassocregulationblog.blogspot.com/2017/01/rules-versus-discretionary-authorities.html and earlier http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html).  Inflation rates then stabilized in the US in a range with only two episodes above 5 percent. There are isolated cases of deflation concentrated over extended periods only during the 1930s. There is no case in United States economic history for unconventional monetary policy because of fear of deflation. There are cases of long-term deflation without lost decades or depressions.

Delfim Netto (1958) partly reprinted in Pelaez (1973) conducted two classical nonparametric tests (Mann 1945, Wallis and Moore 1941; see Kendall and Stuart 1968) with coffee-price data in the period of free markets from 1857 to 1906 with the following conclusions (Pelaez, 1976a, 280):

“First, the null hypothesis of no trend was accepted with high confidence; secondly, the null hypothesis of no oscillation was rejected also with high confidence. Consequently, in the nineteenth century international prices of coffee fluctuated but without long-run trend. This statistical fact refutes the extreme argument of structural weakness of the coffee trade.”

The conventional theory that the terms of trade of Brazil deteriorated over the long term is without reality (Pelaez 1976a, 280-281):

“Moreover, physical exports of coffee by Brazil increased at the high average rate of 3.5 per cent per year. Brazil's exchange receipts from coffee-exporting in sterling increased at the average rate of 3.5 per cent per year and receipts in domestic currency at 4.5 per cent per year. Great Britain supplied nearly all the imports of the coffee economy. In the period of the free coffee market, British export prices declined at the rate of 0.5 per cent per year. Thus, the income terms of trade of the coffee economy improved at the relatively satisfactory average rate of 4.0 per cent per year. This is only a lower bound of the rate of improvement of the terms of trade. While the quality of coffee remained relatively constant, the quality of manufactured products improved significantly during the fifty-year period considered. The trade data and the non-parametric tests refute conclusively the long-run hypothesis. The valid historical fact is that the tropical export economy of Brazil experienced an opportunity of absorbing rapidly increasing quantities of manufactures from the "workshop" countries. Therefore, the coffee trade constituted a golden opportunity for modernization in nineteenth-century Brazil.”

Imlah (1958) provides decline of British export prices at 0.5 percent in the nineteenth century and there were no lost decades, depressions or unconventional monetary policies in the highly dynamic economy of England that provided the world’s growth impulse. The experience of the United Kingdom with deflation and economic growth is relevant and rich. Yearly percentage changes of the composite index of prices of the United Kingdom of O’Donoghue and Goulding (2004) provide strong evidence. There are 73 declines of inflation in the 145 years from 1751 to 1896. Prices declined in 50.3 percent of 145 years. Some price declines were quite sharp and many occurred over several years. O’Donoghue and Goulding (2004) also provide inflation data for the UK from 1929 to 1934. Deflation was much sharper in continuous years in earlier periods than during the Great Depression. The United Kingdom could not have led the world in modern economic growth if there were meaningful causality from deflation to depression.

Chart IV-5AB, US, Consumer Price Index, All Items, 12- Month Percentage Change 1914-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm

Chart IV-6A provides the US consumer price index excluding food and energy from 1957 (when it first becomes available) to 2019. There is long-term inflation in the US without episodes of deflation that would justify symmetric inflation targets to increase inflation from low levels.

 

Chart IV-6A, US, Consumer Price Index Excluding Food and Energy, NSA, 1957-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm

Chart IV-7A provides 12-month percentage changes of the consumer price index excluding food and energy from 1958 (when it first becomes available) to 2020. There are three waves of inflation in the 1970s during the Great Inflation. There is no episode of deflation.

Chart IV-7A, US, Consumer Price Index Excluding Food and Energy, 12-Month Percentage Change, NSA, 1958-2020

Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm

More detail on the consumer price index of Japan in Aug 2020 is in Table IV-6A. Items related to commodities, such as minus 1.9 percent in fuel, light and water charges in 12 months with decrease of 0.2 percent in the month, influenced inflation in the 12 months ending in Aug 2020. There were effects of the increase in the tax on the value added of consumption throughout most segments during several months. Fiscal and monetary policies promoting devaluation of the yen are influencing inflation in Japan. There is similar behavior in the preliminary estimate for Aug 2020 in the Ku Area of Tokyo with change of minus 0.7 percent of fuel, light and water charges and decrease of 1.4 percent in 12 months. There is 12-month increase of 0.2 percent of CPI transport and communications. The CPI excluding fresh food, which is the inflation indicator of the Bank of Japan, changed minus 0.4 percent in the 12 months ending in Aug 2020. There is fluctuation in the CPI excluding fresh food and energy with minus 0.1 percent in the 12 months ending in Aug 2020 and change of minus 0.5 percent in Aug 2020. The all-items CPI estimate for Aug 2020 of the Ku-Area of Tokyo shows change of minus 0.4 percent in Aug 2020 and increase of 0.3 percent in 12 months.

Table IV-6A, Japan, Consumer Price Index, ∆%

2020	Weights	Year ∆% NSA	Aug 2020/Jul 2020 ∆% SA
CPI All Items	10000	0.2	-0.1
CPI Excluding Fresh Food	9586	-0.4	-0.4
CPI Excluding Fresh Food and Energy	8802	-0.1	-0.5
CPI Goods	4969	1.4	0.6
CPI Services	5031	-1.0	-0.3
CPI Excluding Imputed Rent	NA	NA	NA
CPI Fuel, Light, Water Charges	745	-1.9	-0.2
CPI Transport & Communications	1476	0.2	0.5
Ku-Area Tokyo		Year ∆%	Aug 2020/Jul 2020 ∆%
CPI Ku-Area Tokyo All Items	10000	0.3	-0.4
All Items Less Fresh Food	9588	-0.3	-0.6
CPI Excluding Fresh Food and Energy	9038	-0.1	0.7
Fuel, Light, Water Charges Ku Area Tokyo	625	-1.4	-0.7

Note: Ku-area Tokyo CPI data preliminary for Aug 2020

Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/cpi/index.html

https://www.bls.gov/cpi/

The harmonized index of consumer prices of the euro area in Table IV-6EA has similar inflation waves as in most countries (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html). In the first wave, consumer prices in the euro area increased at the annual equivalent rate of 4.9 percent in Jan-Apr 2011. In the second wave, risk aversion caused unwinding of commodity carry trades with inflation decreasing at the annual equivalent rate of minus 2.4 percent in May-Jul 2011. In the third wave, improved risk appetite resulted in annual equivalent inflation in Aug-Nov 2011 at 4.3 percent. In the fourth wave, return of risk aversion caused decline of consumer prices at the annual equivalent rate of minus 3.0 percent in Dec 2011 to Jan 2012. In the fifth wave, improved attitudes toward risk aversion resulted in higher consumer price inflation at the high annual equivalent rate of 9.6 percent in Feb-Apr 2012. In the sixth wave, annual equivalent inflation fell to minus 2.8 percent in May-Jul 2012. In the seventh wave, increasing risk appetite caused new carry trade exposures that resulted in annual equivalent inflation of 6.8 percent in Aug-Sep 2012 and 5.3 percent in Aug-Oct 2012. In the eighth wave, annual-equivalent inflation was minus 2.4 percent in Nov 2012. In the ninth wave, annual equivalent inflation was 4.9 percent in Dec 2012. In the tenth wave, annual equivalent inflation was minus 11.4 percent in Jan 2013. In the eleventh wave, annual equivalent inflation was 10.0 percent in Feb-Mar 2013. In the twelfth wave, annual equivalent inflation was minus 1.2 percent in Apr 2013. In the thirteenth wave, annual equivalent inflation rose to 1.2 percent in May-Jun 2013. In the fourteenth wave, annual equivalent inflation was minus 5.8 percent in Jul 2013. In the fifteenth wave, annual equivalent inflation was 3.7 percent in Aug-Sep 2013. In the sixteenth wave, annual equivalent inflation was minus 2.4 percent in Oct-Nov 2013. In the seventeenth wave, annual inflation returned at 4.9 percent in Dec 2013. In the eighteenth wave, inflation fell at annual equivalent 12.4 percent in Jan 2014. In the nineteenth wave, annual equivalent inflation was at 5.3 percent in Feb-Apr 2014. In the twentieth wave, annual equivalent inflation was minus 1.2 percent in May 2014. Inflation volatility around the world is confusing the information required in investment and consumption decisions. In the twenty-first wave, annual equivalent inflation was 1.2 percent in Jun 2014. In the twenty-second wave, annual equivalent inflation was at minus 7.0 percent in Jul 2014. In the twenty-third wave, annual equivalent inflation was 3.0 percent in Aug-Sep 2014. In the twenty-fourth wave, annual equivalent inflation was minus 5.6 percent in Oct 2014-Jan 2015. In the twenty-fifth wave, annual equivalent inflation was 7.8 percent in Feb-May 2015. In the twenty-sixth wave, prices changed at 0.0 percent in Jun 2015. In the twenty-seventh wave, prices fell at annual equivalent 3.5 percent in Jul 2015. In the twenty-eighth wave, consumer prices increased at annual equivalent 1.8 percent in Sep-Oct 2015. In the twenty-ninth wave, consumer prices fell at 2.4 percent annual equivalent in Nov-Dec 2015. In the thirtieth wave, annual equivalent inflation was minus 16.6 percent in Jan 2016. In the thirty-first wave, annual equivalent inflation was at 8.7 percent in Feb-Mar 2016. In the thirty-second wave, prices increased at 2.4 percent in Apr 2016. In the thirty-third wave, annual equivalent inflation was at 3.7 percent in May-Jun 2016. In the thirty-fourth wave, consumer prices fell at annual equivalent 5.8 percent in Jul 2016. In the thirty-fifth wave, annual equivalent inflation was 1.2 percent in Aug 2016. In the thirty-sixth wave, consumer prices increased at 3.7 percent annual equivalent in Sep-Oct 2016. In the thirty-seventh wave, annual equivalent inflation was at minus 4.7 percent in Nov 2016. In the thirty-eighth wave, consumer prices increased at annual equivalent rate of 6.2 percent in Dec 2016. In the thirty-ninth wave, annual equivalent inflation was minus 10.3 percent in Jan 2017. In the fortieth wave, consumer prices increased at 7.4 percent annual equivalent in Feb-Apr 2017. In the forty-first wave, annual equivalent inflation was minus 2.0 percent in May-Jul 2017. In the forty-second wave, annual equivalent inflation was 4.3 percent in Aug-Sep 2017.  In the forty-third wave, annual equivalent inflation was at minus 1.2 percent in Oct-Nov 2017. In the forty-fourth wave, annual equivalent inflation was at 3.7 percent in Dec 2017. In the forty-fifth wave, annual equivalent inflation was minus 10.3 percent in Jan 2018. In the forty-sixth wave, annual equivalent inflation was at 7.1 percent in Feb-May 2018. In the forty-seventh wave, annual equivalent inflation was at 1.2 percent in Jun 2018. In the forty-eighth wave, consumer prices fell at annual equivalent 2.4 percent in Jul 2018. In the forty-ninth wave, annual equivalent inflation was at 3.2 percent in Aug-Oct 2018. In the fiftieth wave, annual equivalent inflation was at minus 6.2 percent in Nov-2018-Jan 2019. In the fifty-first wave, annual equivalent inflation was at 8.3 percent in Feb-Apr 2019. In the fifty-second wave, annual equivalent inflation was at 1.8 percent in May-Jun 2019. In the fifty-third wave, annual equivalent inflation was at minus 5.8 percent in Jul 2019. In the fifty-fourth wave, annual equivalent inflation was at 1.6 percent in Aug-Oct 2019.  In the fifty-fifth wave, annual equivalent inflation was at minus 3.5 percent in Nov 2019. In the fifty-sixth wave, annual equivalent inflation was at 3.7 percent in Dec 2019. In the fifty-seventh wave, annual equivalent inflation was at minus 11.4 percent in Jan 2020. In the fifty-eighth wave, annual equivalent inflation was at 4.1 percent in Feb-Apr 2020. In the fifty-ninth wave, annual equivalent inflation was at minus 1.2 percent in May 2020. In the sixtieth wave, annual equivalent inflation was at 3.7 percent in Jun 2020. In the sixty-first wave, annual equivalent inflation was at minus 4.7 percent in Jul-Aug 2020. The bottom part of Table IV-IV6EA provides annual inflation in the euro area from 1999 to 2019. HICP inflation was 3.3 percent in 2008 mostly because of carry trades from interest rates falling to zero into commodity futures. Exposures in commodity futures were reversed in the flight to US government obligations with resulting inflation of 0.3 percent in 2009. Reallocations of portfolios of financial investors according to risk aversion caused high volatility of inflation in 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018 and 2019.

Table IV-6EA, Euro Area Harmonized Index of Consumer Prices Month and 12 Months ∆%

	Month ∆%	12 Months ∆%
Aug 2020	-0.4	-0.2
Jul	-0.4	0.4
AE ∆% Jul-Aug	-4.7
Jun	0.3	0.3
AE ∆% Jun	3.7
May	-0.1	0.1
AE ∆% May	-1.2
Apr	0.3	0.3
Mar	0.5	0.7
Feb	0.2	1.2
AE ∆% Feb-Apr	4.1
Jan	-1.0	1.4
AE ∆% Jan	-11.4
Dec 2019	0.3	1.3
AE ∆% Dec	3.7
Nov	-0.3	1.0
AE ∆% Nov	-3.5
Oct	0.1	0.7
Sep	0.2	0.8
Aug	0.1	1.0
AE ∆% Aug-Oct	1.6
Jul	-0.5	1.0
AE ∆% Jul	-5.8
Jun	0.2	1.3
May	0.1	1.2
AE ∆% May-Jun	1.8
Apr	0.7	1.7
Mar	1.0	1.4
Feb	0.3	1.5
AE ∆% Feb-Apr	8.3
Jan	-1.0	1.4
Dec 2018	0.0	1.5
Nov	-0.6	1.9
AE ∆% Nov-Jan	-6.2
Oct	0.2	2.3
Sep	0.4	2.1
Aug	0.2	2.1
AE ∆% Aug-Oct	3.2
Jul	-0.2	2.2
AE ∆% Jul	-2.4
Jun	0.1	2.0
AE ∆% Jun	1.2
May	0.6	2.0
Apr	0.4	1.2
Mar	1.1	1.4
Feb	0.2	1.1
AE ∆% Feb-May	7.1
Jan	-0.9	1.3
AE ∆% Jan	-10.3
Dec 2017	0.3	1.3
AE ∆% Dec	3.7
Nov	-0.2	1.5
Oct	0.0	1.4
AE ∆% Oct-Nov	-1.2
Sep	0.4	1.6
Aug	0.3	1.5
AE ∆% Aug-Sep	4.3
Jul	-0.5	1.3
Jun	0.1	1.3
May	-0.1	1.4
AE ∆% May-Jul	-2.0
Apr	0.6	1.9
Mar	0.8	1.5
Feb	0.4	2.0
AE ∆% Feb-Apr	7.4
Jan	-0.9	1.7
AE ∆% Jan	-10.3
Dec 2016	0.5	1.1
AE ∆% Dec	6.2
Nov	-0.4	0.6
AE ∆% Nov	-4.7
Oct	0.2	0.5
Sep	0.4	0.4
AE ∆% Sep-Oct	3.7
Aug	0.1	0.2
AE ∆% Aug	1.2
Jul	-0.5	0.2
AE ∆% Jul	-5.8
Jun	0.2	0.0
May	0.4	-0.1
AE ∆% May-Jun	3.7
Apr	0.2	-0.3
AE ∆% Apr	2.4
Mar	1.2	0.0
Feb	0.2	-0.1
AE ∆% Feb-Mar	8.7
Jan	-1.5	0.3
AE ∆% Jan	-16.6
Dec 2015	0.0	0.3
Nov	-0.4	0.1
AE ∆% Nov-Dec	-2.4
Oct	0.1	0.4
Sep	0.2	0.2
AE ∆% Sep-Oct	1.8
Aug	0.0	0.4
Jul	-0.6	0.5
AE ∆% Jul-Aug	-3.5
Jun	0.0	0.5
AE ∆% Jun	0.0
May	0.3	0.6
Apr	0.4	0.2
Mar	1.2	-0.1
Feb	0.6	-0.3
AE ∆% Feb-May	7.8
Jan	-1.5	-0.6
Dec 2014	-0.1	-0.2
Nov	-0.2	0.3
Oct	-0.1	0.4
AE ∆% Oct-Jan	-5.6
Sep	0.4	0.3
Aug	0.1	0.4
AE ∆% Aug-Sep	3.0
Jul	-0.6	0.4
AE ∆% Jul	-7.0
Jun	0.1	0.5
AE ∆% Jun	1.2
May	-0.1	0.5
AE ∆% May	-1.2
Apr	0.1	0.7
Mar	0.9	0.5
Feb	0.3	0.7
AE ∆% Feb-Apr	5.3
Jan	-1.1	0.8
AE ∆% Jan	-12.4
Dec 2013	0.4	0.8
AE ∆% Dec	4.9
Nov	-0.1	0.9
Oct	-0.1	0.7
AE ∆% Oct-Nov	-2.4
Sep	0.5	1.1
Aug	0.1	1.3
AE ∆% Aug- Sep	3.7
Jul	-0.5	1.6
AE ∆% Jul	-5.8
Jun	0.1	1.6
May	0.1	1.4
AE ∆% May-Jun	1.2
Apr	-0.1	1.2
AE ∆% Apr	-1.2
Mar	1.2	1.7
Feb	0.4	1.9
AE ∆% Feb-Mar	10.0
Jan	-1.0	2.0
AE ∆% Jan	-11.4
Dec 2012	0.4	2.2
AE ∆% Dec	4.9
Nov	-0.2	2.2
AE ∆% Nov	-2.4
Oct	0.2	2.5
Sep	0.7	2.6
Aug	0.4	2.6
AE ∆% Aug-Oct	5.3
Jul 2012	-0.5	2.4
Jun	-0.1	2.4
May	-0.1	2.4
AE ∆% May-Jul	-2.8
Apr	0.5	2.6
Mar	1.3	2.7
Feb	0.5	2.7
AE ∆% Feb-Apr	9.6
Jan	-0.8	2.7
Dec 2011	0.3	2.8
AE ∆% Dec-Jan	-3.0
Nov	0.1	3.0
Oct	0.3	3.0
Sep	0.7	3.0
Aug	0.2	2.6
AE ∆% Aug-Nov	4.3
Jul	-0.6	2.6
Jun	0.0	2.7
May	0.0	2.7
AE ∆% May-Jul	-2.4
Apr	0.6	2.8
Mar	1.3	2.7
Feb	0.4	2.4
Jan	-0.7	2.3
AE ∆% Jan-Apr	4.9
Dec 2010	0.6	2.2
Annual ∆%		1.7
2019		1.2
2018		1.8
2017		1.5
2016		0.2
2015		0.2
2014		0.4
2013		1.3
2012		2.5
2011		2.7
2010		1.6
2009		0.3
2008		3.3
2007		2.2
2006		2.2
2005		2.2
2004		2.2
2003		2.1
2002		2.3
2001		2.4
2000		2.2
1999		1.2

AE: annual equivalent Source: EUROSTAT 

https://ec.europa.eu/eurostat

https://ec.europa.eu/eurostat/data/database

Table IV-7EAprovides weights and inflation of selected components of the HICP of the euro area. Inflation of all items excluding energy increased 0.7 percent in Aug 2020 relative to Aug 2019. Prices of non-energy industrial goods decreased 0.1 percent in Aug 2020 relative to a year earlier. Inflation of services was 0.7 percent in Aug 2020 relative to a year earlier.

Table IV-7EA, Euro Area, HICP Inflation and Selected Components, ∆%

	Weight % 2020	Aug 2020/ Aug 2019	Jul 2020/ Jul 2019	Jun 2020/ Jun 2019
All Items	1000.0	-0.2	0.4	0.3
All Items Ex Energy	901.5	0.7	1.4	1.3
All Items Ex Energy, Food, Alcohol & Tobacco	710.8	0.4	1.2	0.8
All Items Ex Energy & Unprocessed Food	857.1	0.6	1.3	1.1
All Items Ex Energy & Seasonal Food	876.5	0.6	1.3	1.1
All Items Ex Tobacco	977.2	-0.3	0.2	0.1
Energy	98.5	-7.8	-8.4	-9.3
Food, Alcohol & Tobacco	190.7	1.7	2.0	3.2
Non-energy Industrial Goods	262.1	-0.1	1.6	0.2
Services	448.7	0.7	0.9	1.2

AE: annual equivalent

Source: EUROSTAT

https://ec.europa.eu/eurostat

https://ec.europa.eu/eurostat/data/database

The estimate of consumer price inflation in Germany in Table IV-8DE is minus 0.1 percent in 12 months ending in Aug 2020 and minus 0.2 percent in Aug 2020. There are waves of consumer price inflation in Germany similar to those worldwide (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html). In the first wave, annual equivalent inflation was 2.7 percent in Jan-Apr 2011 NSA during risk appetite in carry trades from zero interest rates to commodity futures. In the second wave, annual equivalent consumer price inflation collapsed to minus 0.6 percent NSA in May-Jun 2011 because of risk aversion caused by the European sovereign debt event. In the third wave, annual equivalent consumer price inflation was 1.4 percent NSA in Jul-Nov 2011 because of relaxed risk aversion. In the fourth wave, annual equivalent inflation was at 1.8 percent in Dec 2011 to Jan 2012. In the fifth wave, annual equivalent inflation rose to 5.3 percent NSA in Feb-Apr 2012 during another energy-commodity carry trade shock. In the sixth wave, annual equivalent inflation in May-Jun 2012 was minus 2.4 percent. In the seventh wave, annual equivalent inflation NSA was 4.9 percent in Jul-Aug 2012. In the eighth wave in Sep-Oct 2012, annual equivalent inflation was 0.0 percent NSA. In the ninth wave, annual equivalent inflation fell to minus 2.4 percent in Nov 2012. In the tenth wave, annual equivalent inflation rose to 11.4 percent NSA in Dec 2012. In the eleventh wave, annual equivalent inflation in Jan 2013 fell to minus 7.0 percent NSA in reversal of carry trades into commodity futures. In the twelfth wave, annual equivalent inflation returned at 7.4 percent in Feb-Mar 2013 NSA. In the thirteenth wave, annual equivalent inflation was at minus 7.0 percent in Apr 2013. In the fourteenth wave, annual equivalent inflation was 3.2 percent in May-Jul 2013. In the fifteenth wave, annual equivalent inflation was 0.0 percent in Aug-Sep 2013. In the sixteenth wave, annual equivalent inflation was minus 3.5 percent NSA in Oct 2013. In the seventeenth wave, annual equivalent inflation returned at 4.3 percent in Nov-Dec 2013. In the eighteenth wave, annual equivalent inflation was minus 8.1 percent in Jan 2014. In the nineteenth wave, annual equivalent inflation was 4.9 percent in Feb-Mar 2014. In the twentieth wave, annual equivalent inflation was minus 2.4 percent NSA in Apr-May 2014. In the twenty-first wave, annual equivalent inflation was 3.7 percent in Jun-Jul 2014. In the twenty-second wave, annual equivalent inflation was minus 0.5 percent in Aug-Dec 2014. In the twenty-third wave, annual equivalent inflation was minus 14.5 percent NSA in Jan 2015. In the twenty-fourth wave, annual equivalent inflation was 7.8 percent in Feb-May 2019. In the twenty-fifth wave, annual equivalent inflation was minus 1.2 percent in Jun 2015. In the twenty-sixth wave, annual equivalent inflation was 1.8 percent in Jul-Aug 2015. In the twenty-seventh wave, annual equivalent inflation was minus 3.5 percent NSA in Sep 2015. In the twenty-eighth wave, annual equivalent inflation was 0.0 percent in Oct 2015. In the twenty-ninth wave, annual equivalent inflation was minus 11.4 percent in Nov 2015. In the thirtieth wave, annual equivalent inflation was minus 5.9 percent in Dec 2015-Jan 2016. In the thirty-first wave, annual equivalent inflation was 8.1 percent in Feb-Mar 2016. In the thirty-second wave, annual equivalent inflation was 1.2 percent in Apr 2016. In the thirty-third wave, annual equivalent inflation was 5.3 percent in May-Jul 2016. In the thirty-fourth wave, annual equivalent inflation was minus 1.2 percent in Aug 2016. In the thirty-fifth wave, annual equivalent inflation was 0.6 percent in Sep-Oct 2016. In the thirty-sixth wave, annual equivalent inflation was minus 10.3 percent in Nov 2016. In the thirty-seventh wave, annual equivalent inflation was 11.4 percent in Dec 2016. In the thirty-eighth wave, annual equivalent inflation was minus 11.4 percent in Jan 2017. In the thirty-ninth wave, annual equivalent inflation was 7.0 percent in Feb-Apr 2017. In the fortieth wave, annual equivalent inflation was minus 1.2 percent in May 2017. In the forty-first wave, annual equivalent inflation was 6.8 percent in Jun-Jul 2017. In the forty-second wave, consumer prices increased at annual equivalent 0.6 percent in Aug-Sep 2017. In the forty-third wave, annual equivalent inflation was at minus 3.5 percent in Oct 2017. In the forty-fourth wave, annual equivalent inflation was at minus 8.1 percent in Nov 2017. In the forty-fifth wave, annual equivalent inflation was at 8.7 percent in Dec 2017. In the forty-sixth wave, annual equivalent was at minus 11.4 percent in Jan 2018. In the forty-seventh wave, annual equivalent was at 8.1 percent in Feb-Mar 2018. In the forty-eighth wave, annual equivalent inflation was at 2.4 percent in Apr 2018. In the forty-ninth wave, annual equivalent inflation was at 8.3 percent in May-Jul 2018. In the fiftieth wave, annual equivalent inflation was at 0.8 percent in Aug-Oct 2018. In the fifty-first wave, consumer prices fell at annual equivalent 12.4 percent in Nov 2018. In the fifty-second wave, consumer prices increased at annual equivalent 2.4 percent in Dec 2018. In the fifty-third wave, consumer prices fell at annual equivalent 11.4 percent in Jan 2019. In the fifty-fourth wave, consumer prices increased at annual equivalent 8.3 percent in Feb-Apr 2019. In the fifty-fifth wave, consumer prices increased at annual equivalent 4.1 percent in May-Jul 2019. In the fifty-sixth wave, consumer prices fell at annual equivalent 1.2 percent in Aug-Sep 2019.  In the fifty-seventh wave, consumer prices increased at annual equivalent 1.2 percent in Oct 2019. In the fifty-eighth wave, consumer prices fell at annual equivalent 9.2 percent in Nov 2019. In the fifty-ninth wave, consumer prices increased at annual equivalent 7.4 percent in Dec 2019. In the sixtieth wave, consumer prices decreased at annual equivalent 9.2 percent in Jan 2020. In the sixty-first wave, consumer prices increased at annual equivalent 4.5 percent in Feb-Apr 2020. In the sixty-second wave, consumer prices changed at annual equivalent 0.0 percent in May 2020. In the thirty-third wave, consumer prices increased at annual equivalent 8.7 percent in Jun 2020. In the thirty-fourth wave, consumer prices fell at annual equivalent 4.1 percent in Jul-Aug 2020. Under unconventional monetary policy of zero interest rates and quantitative easing, inflation becomes highly volatile during alternative shocks of risk aversion and risk appetite, preventing sound investment and consumption decisions.

Table IV-8DE, Germany, Harmonized Index of Consumer Prices, ∆%

	12-Month ∆%	Month ∆% NSA
Aug	-0.1	-0.2
Jul	0.0	-0.5
AE ∆% Jul-Aug		-4.1
Jun	0.8	0.7
AE ∆% Jun		8.7
May	0.5	0.0
AE ∆% May		0.0
Apr	0.8	0.4
Mar	1.3	0.1
Feb	1.7	0.6
AE ∆% Feb-Apr		4.5
Jan	1.6	-0.8
AE ∆% Jan		-9.2
Dec 2019	1.5	0.6
AE ∆% Dec		7.4
Nov	1.2	-0.8
AE ∆% Nov		-9.2
Oct	0.9	0.1
AE ∆% Oct		1.2
Sep	0.9	-0.1
Aug	1.0	-0.1
AE ∆% Aug-Sep		-1.2
Jul	1.1	0.4
Jun	1.5	0.3
May	1.3	0.3
AE ∆% May-Jul		4.1
Apr	2.1	1.0
Mar	1.4	0.5
Feb	1.7	0.5
AE ∆% Feb-Apr		8.3
Jan	1.7	-1.0
		-11.4
Dec 2018	1.7	0.2
AE ∆% Dec		2.4
Nov	2.2	-1.1
AE ∆% Nov		-12.4
Oct	2.6	0.1
Sep	2.2	0.1
Aug	2.1	0.0
AE ∆% Aug-Oct		0.8
Jul	2.2	0.8
Jun	2.1	0.1
May	2.5	1.1
AE ∆% May-Jul		8.3
Apr	1.3	0.2
AE ∆% Apr		2.4
Mar	1.7	0.8
Feb	1.2	0.5
AE ∆% Feb-Mar		8.1
Jan	1.5	-1.0
AE ∆% Jan		-11.4
Dec 2017	1.5	0.7
AE ∆% Dec		8.7
Nov	1.7	-0.7
AE ∆% Nov		-8.1
Oct	1.5	-0.3
AE ∆% Oct		-3.5
Sep	1.9	0.0
Aug	1.9	0.1
AE ∆% Aug-Sep		0.6
Jul	1.7	0.6
Jun	1.7	0.5
AE ∆% Jun-Jul		6.8
May	1.3	-0.1
AE ∆% May		-1.2
Apr	2.0	0.6
Mar	1.5	0.3
Feb	2.1	0.8
AE ∆% Feb-Apr		7.0
Jan	1.7	-1.0
AE ∆% Jan		-11.4
Dec 2016	1.6	0.9
AE ∆% Dec		11.4
Nov	0.8	-0.9
AE ∆% Nov		-10.3
Oct	0.7	0.1
Sep	0.6	0.0
AE ∆% Sep-Oct		0.6
Aug	0.3	-0.1
AE ∆% Aug		-1.2
Jul	0.3	0.6
Jun	0.1	0.1
May	-0.1	0.6
AE ∆% May-Jul		5.3
Apr	-0.3	0.1
AE ∆% Apr		1.2
Mar	0.1	0.9
Feb	-0.1	0.4
AE ∆% Feb-Mar		8.1
Jan	0.4	-1.1
Dec 2015	0.2	0.1
AE ∆% Dec-Jan		-5.9
Nov	0.2	-1.0
AE ∆% Nov		-11.4
Oct	1.2	0.0
AE ∆% Oct		0.0
Sep	0.8	-0.3
AE ∆% Sep		-3.5
Aug	1.1	-0.1
Jul	1.3	0.4
AE ∆% Jul-Aug		1.8
Jun	1.1	-0.1
AE ∆% Jun		-1.2
May	1.6	0.4
Apr	1.0	0.5
Mar	0.3	0.7
Feb	-0.2	0.9
AE ∆% Feb-May		7.8
Jan	-0.5	-1.3
AE ∆% Jan		-14.5
Dec 2014	0.1	0.1
Nov	0.5	0.0
Oct	0.7	-0.4
Sep	0.8	0.0
Aug	0.8	0.1
AE ∆% Aug-Dec		-0.5
Jul	0.7	0.2
Jun	0.9	0.4
AE ∆% Jun-Jul		3.7
May	0.7	-0.2
Apr	1.1	-0.2
AE ∆% Apr-May		-2.4
Mar	0.7	0.2
Feb	1.0	0.6
AE ∆% Feb-Mar		4.9
Jan	1.1	-0.7
AE ∆% Jan		-8.1
Dec 2013	1.2	0.5
Nov	1.6	0.2
AE ∆% Nov-Dec		4.3
Oct	1.2	-0.3
AE ∆% Oct		-3.5
Sep	1.5	0.0
Aug	1.5	0.0
AE ∆% Aug-Sep		0.0
Jul	2.0	0.4
Jun	2.0	0.2
May	1.5	0.2
AE ∆% May-Jul		3.2
Apr	1.1	-0.6
AE ∆% Apr		-7.0
Mar	1.9	0.5
Feb	1.8	0.7
AE ∆% Feb-Mar		7.4
Jan	1.9	-0.6
AE ∆% Jan		-7.0
Dec 2012	2.1	0.9
AE ∆% Dec		11.4
Nov	1.9	-0.2
AE ∆% Nov		-2.4
Oct	2.1	0.0
Sep	2.2	0.0
AE ∆% Sep-Oct		0.0
Aug	2.3	0.4
Jul	1.9	0.4
AE ∆% Jul-Aug		4.9
Jun	1.9	-0.2
May	2.1	-0.2
AE ∆% May-Jun		-2.4
Apr	2.2	0.1
Mar	2.3	0.4
Feb	2.6	0.8
AE ∆% Feb-Apr		5.3
Jan	2.4	-0.4
Dec 2011	2.2	0.7
AE ∆% Dec-Jan		1.8
Nov	2.7	0.0
Oct	2.8	0.1
Sep	2.8	0.1
Aug	2.5	0.0
Jul	2.6	0.4
AE ∆% Jul-Nov		1.4
Jun	2.4	0.0
May	2.5	-0.1
AE ∆% May-Jun		-0.6
Apr	2.7	0.2
Mar	2.4	0.6
Feb	2.3	0.6
Jan	2.0	-0.5
AE ∆% Jan-Apr		2.7
Dec 2010	1.8	1.2
Nov	1.5	0.1
Oct	1.3	0.1
Sep	1.2	-0.2
Aug	1.0	0.1
Annual Average ∆%
2019	1.4
2018	1.9
2017	1.7
2016	0.4
2015	0.7
2014	0.8
2013	1.6
2012	2.2
2011	2.5
2010	1.1
2009	0.2
2008	2.8
2007	2.3
2006	1.8
2005	1.9
2004	1.8
2003	1.1
2002	1.3
2001	1.9
2000	1.4
1999	0.6

AE: Annual Equivalent

AE: annual equivalent Source: EUROSTAT

https://ec.europa.eu/eurostat/

https://ec.europa.eu/eurostat/data/database

Inflation in the UK is somewhat higher than in many advanced economies, deserving more detailed analysis. Table IV-14 provides 12-month percentage changes of UK output prices for all manufactured products, excluding food, beverage and petroleum and excluding duty. The UK Office for National Statistics introduced rebasing for 2010=100 of the producer price index with important revisions (http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/producer-price-index-rebasing--2010-100-/index.html). The 12-month rates rose significantly in 2011 in all three categories, reaching 5.3 percent for all manufactured products in Sep 2011 but declining to 4.9 percent in Oct 2011, 4.6 percent in Nov 2011 and down to 1.3 percent in Jul 2012. Inflation of all manufactured products increased marginally to 1.7 percent in Aug 2012, 1.8 percent in Sep 2012, 1.9 percent in Oct 2012, 1.7 percent in Feb 2013, 1.5 percent in Mar 2013 and 1.0 percent in Apr 2013. Output prices increased 1.2 percent in the 12 months ending in May 2013, 1.7 percent in Jun 2013 and 1.8 percent in Jul 2013. Output price inflation was 1.5 percent in the 12 months ending in Aug 2013 and 1.2 percent in the 12 months ending in Sep 2013. Output price inflation was 0.8 percent in the 12 months ending in Oct 2013 and 0.8 percent in the 12 months ending in Nov 2013. Prices of output increased 1.0 percent in the 12 months ending in Dec 2013 and 0.9 percent in the 12 months ending in Jan 2014. Output prices increased 0.6 percent in the 12 months ending in Feb 2014 and 0.4 percent in the 12 months ending in Mar 2014. Output prices increased 0.6 percent in the 12 months ending in Apr 2014 and 0.5 percent in the 12 months ending in May 2014 down to minus 0.1 percent in Jul 2014. Output prices fell 0.3 percent in Aug 2014 and fell 0.5 percent in Sep 2014. Output prices fell 0.7 percent in Oct 2014 and fell 0.6 percent in the 12 months ending in Nov 2014. Output prices fell 1.1 percent in the 12 months ending in Dec 2014 and fell 1.8 percent in the 12 months ending in Jan 2015. Output prices fell 1.7 percent in the 12 months ending in Feb 2015 and declined 1.7 percent in the 12 months ending in Mar 2015. Output prices fell 1.7 percent in the 12 months ending in Apr 2015 and fell 1.6 percent in the 12 months ending in May 2015. Output prices fell 1.5 percent in the 12 months ending in Jun 2015 and fell 1.6 percent in the 12 months ending in Jul 2015. Output prices fell 1.9 percent in the 12 months ending in Aug 2015 and decreased 1.8 percent in the 12 months ending in Sep 2015. Output prices fell 1.5 percent in the 12 months ending in Oct 2015 and fell 1.6 percent in the 12 months ending in Nov 2015. Output prices fell 1.4 percent in the 12 months ending in Dec 2015 and fell 1.0 percent in the 12 months ending in Jan 2016. Output prices fell 1.1 percent in the 12 months ending in Feb 2016 and declined 0.7 percent in the 12 months ending Mar 2016. Output prices fell 0.5 percent in the 12 months ending in Apr 2016 and fell 0.5 percent in the 12 months ending in May 2016. Output prices fell 0.2 percent in the 12 months ending in Jun 2016. Output prices increased 0.2 percent in the 12 months ending in Jul 2016 and increased 0.8 percent in the 12 months ending in Aug 2016. Prices of output increased 1.2 percent in the 12 months ending in Sep 2016 and increased 2.1 percent in the 12 months ending in Oct 2016. Output prices increased 2.4 percent in the 12 months ending in Nov 2016 and increased 2.9 percent in the 12 months ending in Dec 2016. Output prices increased 3.6 percent in the 12 months ending in Jan 2017 and increased 3.7 percent in the 12 months ending in Feb 2017. Output prices increased 3.7 percent in the 12 months ending in Mar 2017 and increased 3.6 percent in the 12 months ending in Apr 2017. Output prices increased 3.6 percent in the 12 months ending in May 2017 and increased 3.3 percent in the 12 months ending in Jun 2017. Output prices increased 3.3 percent in the 12 months ending in Jul 2017 and increased 3.4 percent in the 12 months ending in Aug 2017. Output prices increased 3.3 percent in the 12 months ending in Sep 2017 and increased 2.9 percent in the 12 months ending in Oct 2017. Output prices increased 3.1 percent in the 12 months ending in Nov 2017 and increased 3.1 percent in the 12 months ending in Dec 2017. Output prices increased 2.8 percent in the 12 months ending in Jan 2018 and increased 2.6 percent in the 12 months ending in Feb 2018. Output prices increased 2.5 percent in the 12 months ending in Mar 2018 and increased 2.5 percent in the 12 months ending in Apr 2018. Output prices increased 3.0 percent in the 12 months ending in May 2018 and increased 3.3 percent in the 12 months ending in Jun 2018. Output prices increased 3.1 percent in the 12 months ending in Jul 2018 and increased 3.0 percent in the 12 months ending in Aug 2018. Output prices increased 3.1 percent in the 12 months ending in Sep 2018 and increased 3.3 percent in the 12 months ending in Oct 2018. Output prices increased 3.0 percent in the 12 months ending in Nov 2018 and increased 2.4 percent in the 12 months ending in Dec 2018. Output prices increased 2.1 percent in the 12 months ending in Jan 2019 and increased 2.4 percent in the 12 months ending in Feb 2019. Output prices increased 2.2 percent in the 12 months ending in Mar 2019 and increased 2.1 percent in the 12 months ending in Apr 2019. Output prices increased 1.9 percent in the 12 months ending in May 2019 and increased 1.6 percent in the 12 months ending in Jun 2019. Output prices increased 1.9 percent in the 12 months ending in Jul 2019 and increased 1.7 percent in the 12 months ending in Aug 2019. Output prices increased 1.2 percent in the 12 months ending in Sep 2019 and increased 0.8 percent in the 12 months ending in Oct 2019. Output prices increased 0.5 percent in the 12 months ending in Nov 2019 and increased 0.8 percent in the 12 months ending in Dec 2019. Output prices increased 1.0 percent in the 12 months ending in Jan 2020 and increased 0.5 percent in the 12 months ending in Feb 2020. Output prices increased 0.3 percent in the 12 months ending in Mar 2020. Output prices decreased 0.7 percent in the 12 months ending in Apr 2020 and decreased 1.2 percent in the 12 months ending in May 2020. Output prices decreased 0.9 percent in the 12 months ending in Jun 2020 and decreased 0.9 percent in the 12 months ending in Jul 2020. Output prices decreased 0.9 percent in the 12 months ending in Aug 2020. Output price inflation is highly sensitive to commodity prices as shown by the increase by 6.7 percent in 2008 when oil prices rose over $140/barrel even during a global recession driven by the carry trade from zero interest rates to oil futures. The mirage episode of false deflation in 2001 and 2002 is also captured by output prices for the UK, which originated in decline of commodity prices (see Barsky and Killian 2004) but was used as an argument for unconventional monetary policy of zero interest rates and quantitative easing during the past decade. Arguments for symmetric up and down inflation targets are based on fear of deflation (Pelaez and Pelaez, International Financial Architecture (2005), 18-28, Pelaez and Pelaez, The Global Recession Risk (2007), 83-95).

Table IV-14, UK Output Prices 12 Months ∆% NSA

	All Manufactured Products	Excluding Food, Beverage, Tobacco and Petroleum	All Excluding Duty
Aug 2020	-0.9	0.0	-0.9
Jul	-0.9	0.1	-0.9
Jun	-0.9	0.5	-0.6
May	-1.2	0.6	-0.9
Apr	-0.7	0.7	-0.4
Mar	0.3	0.8	0.6
Feb	0.5	0.5	0.7
Jan	1.0	0.7	1.0
Dec 2019	0.8	0.9	1.0
Nov	0.5	1.1	0.7
Oct	0.8	1.3	0.9
Sep	1.2	1.7	1.3
Aug	1.7	2.0	1.7
Jul	1.9	2.0	2.0
Jun	1.6	1.7	1.6
May	1.9	2.0	1.9
Apr	2.1	2.2	2.1
Mar	2.2	2.2	2.1
Feb	2.4	2.3	2.2
Jan	2.1	2.4	2.1
Dec 2018	2.4	2.5	2.2
Nov	3.0	2.4	2.8
Oct	3.3	2.5	3.0
Sep	3.1	2.5	3.0
Aug	3.0	2.2	2.8
Jul	3.1	2.3	2.9
Jun	3.3	2.4	3.1
May	3.0	2.2	2.8
Apr	2.5	2.0	2.4
Mar	2.5	2.2	2.5
Feb	2.6	2.5	2.5
Jan	2.8	2.2	2.6
Dec 2017	3.1	2.3	3.0
Nov	3.1	2.3	3.0
Oct	2.9	2.2	2.8
Sep	3.3	2.5	3.2
Aug	3.4	2.6	3.3
Jul	3.3	2.5	3.2
Jun	3.3	2.9	3.2
May	3.6	2.8	3.5
Apr	3.6	2.8	3.4
Mar	3.7	2.6	3.4
Feb	3.7	2.4	3.5
Jan	3.6	2.5	3.4
Dec 2016	2.9	2.2	2.8
Nov	2.4	2.3	2.4
Oct	2.1	2.0	2.2
Sep	1.2	1.4	1.2
Aug	0.8	1.5	0.8
Jul	0.2	1.2	0.2
Jun	-0.2	0.7	-0.1
May	-0.5	0.6	-0.4
Apr	-0.5	0.5	-0.4
Mar	-0.7	0.3	-0.7
Feb	-1.1	0.2	-0.8
Jan	-1.0	0.1	-0.8
Dec 2015	-1.4	0.1	-1.1
Nov	-1.6	-0.1	-1.4
Oct	-1.5	0.3	-1.3
Sep	-1.8	0.2	-1.6
Aug	-1.9	0.0	-1.6
Jul	-1.6	0.2	-1.2
Jun	-1.5	0.1	-1.1
May	-1.6	0.1	-1.3
Apr	-1.7	0.1	-1.4
Mar	-1.7	0.1	-1.5
Feb	-1.7	0.3	-1.4
Jan	-1.8	0.5	-1.4
Dec 2014	-1.1	0.8	-0.8
Nov	-0.6	0.9	-0.5
Oct	-0.7	0.6	-0.5
Sep	-0.5	0.8	-0.2
Aug	-0.3	0.9	-0.1
Jul	-0.1	0.8	0.1
Jun	0.3	1.0	0.3
May	0.5	1.0	0.6
Apr	0.6	1.0	0.6
Mar	0.4	1.1	0.6
Feb	0.6	1.1	0.6
Jan	0.9	1.2	1.0
Dec 2013	1.0	1.0	1.1
Nov	0.8	0.7	1.0
Oct	0.8	0.8	1.1
Sep	1.2	0.8	1.4
Aug	1.5	0.9	1.7
Jul	1.8	0.9	2.0
Jun	1.7	0.9	2.0
May	1.2	0.8	1.5
Apr	1.0	0.8	1.4
Mar	1.5	0.9	1.5
Feb	1.7	0.7	1.7
Jan	1.6	0.8	1.6
Dec 2012	1.4	0.4	1.4
Nov	1.5	0.7	1.6
Oct	1.9	0.6	1.7
Sep	1.8	0.5	1.5
Aug	1.7	0.5	1.5
Jul	1.3	0.8	1.1
Jun	1.4	1.0	1.2
May	2.0	1.3	1.9
Apr	2.3	1.4	2.1
Mar	2.9	2.0	2.9
Feb	3.4	2.3	3.3
Jan	3.5	2.2	3.4
Dec 2011	4.0	2.6	3.9
Nov	4.6	2.6	4.4
Oct	4.9	2.9	4.7
Sep	5.3	3.1	5.2
Aug	5.2	3.2	5.0
Jul	5.2	2.8	5.0
Jun	5.0	2.8	4.9
May	4.8	3.0	4.6
Apr	4.9	3.0	4.8
Mar	4.7	2.5	4.4
Feb	4.4	2.5	4.2
Jan	4.0	2.4	3.7
Dec 2010	3.4	2.0	2.9
Year ∆%
2019	1.6	1.8	1.7
2018	2.9	2.4	2.7
2017	3.4	2.5	3.3
2016	0.5	1.0	0.6
2015	-1.7	0.2	-1.4
2014	0.0	0.9	0.2
2013	1.3	0.9	1.5
2012	2.1	1.1	1.9
2011	4.8	2.8	4.6
2010	2.7	1.5	2.1
2009	0.5	1.4	-0.1
2008	6.7	3.6	6.8
2007	2.3	1.4	2.0
2006	2.1	1.5	2.0
2005	1.9	0.9	1.8
2004	1.1	-0.1	0.7
2003	0.6	0.0	0.6
2002	-0.1	-0.3	-0.1
2001	-0.2	-0.7	-0.3
2000	1.4	-0.4	0.8
1999	0.5	-1.1	-0.2
1998	0.1	-0.9	-1.0
1997	1.0	0.3	0.2

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

Monthly and annual equivalent rates of change of output prices are shown in Table IV-15. There are waves of inflation similar to those in other countries (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html). In the first wave, annual equivalent inflation was 10.0 percent in Jan-Apr 2011 with relaxed risk aversion in commodity markets. In the second wave, intermittent risk aversion resulted in annual equivalent inflation of 1.6 percent in May-Oct 2011. In the third wave, alternation of risk aversion resulted in annual equivalent inflation of 1.2 percent in Nov 2011 to Jan 2012. In the fourth wave, the energy commodity shock processed through carry trades caused the jump of annual equivalent inflation to 5.3 percent in Feb-Apr 2012. A fifth wave occurred in May-Jun 2012 with decline of output inflation at 3.5 percent annual equivalent in an environment of risk aversion that caused decline of commodity prices. A sixth wave under commodity shocks induced by carry trades from zero interest rates resulted in annual equivalent inflation of 3.7 percent in Jul-Sep 2012 and 3.0 percent in Jul-Oct 2012. In the seventh wave, annual equivalent inflation in Nov-Dec 2012 fell to minus 2.4 percent. In the eighth wave, annual equivalent inflation returned at 4.9 percent in Jan-Mar 2013. In the ninth wave, risk aversion returned with annual equivalent inflation of minus 0.6 percent in Apr-May 2013. In the tenth wave, annual equivalent inflation was 2.0 percent in Jun-Aug 2013. In the eleventh wave, annual equivalent inflation was minus 1.5 percent in Sep-Dec 2013. In the twelfth wave, annual equivalent inflation returned at 2.0 percent in Jan-Mar 2014. In the thirteenth wave, annual equivalent inflation was minus 0.7 percent in Apr-Aug 2014. In the fourteenth wave, annual equivalent inflation was minus 4.7 percent in Sep-Oct 2015. In the fifteenth wave, annual equivalent inflation was minus 4.3 percent in Nov 2014-Jan 2015. In the sixteenth wave, annual equivalent inflation was 1.5 percent in Feb-May 2015. In the seventeenth wave, annual equivalent inflation was minus 1.2 percent in Jun-Jul 2015. In the eighteenth wave, annual equivalent inflation was minus 5.8 percent in Aug-2015. In the nineteenth wave, annual equivalent inflation was minus 2.4 percent in Sep-Dec 2015. In the twentieth wave, annual equivalent inflation was minus 1.2 percent in Jan 2016. In the twenty-first wave, annual equivalent inflation was 4.1 percent in Feb-Apr 2016. In the twenty-second wave, annual equivalent inflation was 2.4 percent in May-Jul 2016. In the twenty-third wave, annual equivalent inflation was 4.9 percent in Aug-Oct 2016. In the twenty-fourth wave, annual equivalent inflation was 2.4 percent in Nov-Dec 2016. In the twenty-fifth wave, output prices increased at 7.4 percent annual equivalent in Jan 2017. In the twenty-sixth wave, annual equivalent output-price inflation was 2.4 percent in Feb 2017. In the twenty-seventh wave, output prices increased at annual equivalent 4.9 percent in Mar-Apr 2017. In the twenty-eighth wave, output prices increased at annual equivalent 1.2 percent in May-Jul 2017. In the twenty-ninth wave, output prices increased at annual equivalent 3.7 percent in Aug-Oct 2017. In the thirtieth wave, output prices increased at 4.3 percent annual equivalent in Nov-Dec 2017. In the thirty-first wave, output prices increased at 1.8 percent annual equivalent in Jan-Feb 2018. In the thirty-second wave, output prices increased at annual equivalent 4.9 percent in Mar-May 2018. In the thirty-third wave, output prices increased at annual equivalent 3.7 percent in Jun 2018. In the thirty-fourth wave, output prices increased at annual equivalent 1.8 percent in Jul-Aug 2018. In the thirty-fifth avenue, output prices increased at 2.8 percent annual equivalent in Sep-Nov 2018. In the thirty-sixth wave, output prices decreased at 3.5 percent annual equivalent in Dec 2018. In the thirty-seventh wave, output prices increased at annual equivalent 1.8 percent in Jan-Feb 2019. In the thirty-eighth wave, output prices increased at annual equivalent 2.8 percent in Mar-May 2019. In the thirty-ninth wave, output prices decreased at annual equivalent 1.2 percent in Jun 2019. In the fortieth wave, output prices increased at annual equivalent 3.7 percent in Jul 2019. In the forty-first wave, output prices decreased at annual equivalent 1.2 percent in Aug-Nov 2019. In the forty-second wave, output prices decreased at annual equivalent 1.2 percent in Dec 2019. In the forty-third wave, output prices increased at annual equivalent 2.4 percent in Jan 2020. In the forty-fourth wave, output prices decreased at annual equivalent 1.8 percent in Feb-Mar 2020. In the forty-fifth wave, output prices decreased at annual equivalent 5.8 percent in Apr-May 2020. In the forty-sixth wave, output prices increased at annual equivalent 3.7 percent in Jun-Jul 2020. In the forty-seventh wave, output prices changed at annual equivalent 0.0 percent in Aug 2020.

Table IV-15, UK Output Prices Month ∆% NSA

	All Manufactured Products	Excluding Food, Beverage and Petroleum	All Excluding Duty
Aug 2020	0.0	0.1	0.0
∆% AE Aug	0.0	1.2	0.0
Jul	0.3	-0.1	0.2
Jun	0.3	0.0	0.2
∆% AE Jun-Jul	3.7	-0.6	2.4
May	-0.2	0.0	-0.2
Apr	-0.8	0.1	-0.7
∆% AE Apr-May	-5.8	0.6	-5.3
Mar	-0.1	0.2	0.0
Feb	-0.2	0.0	-0.2
∆% AE Feb-Mar	-1.8	1.2	-1.2
Jan	0.2	0.1	0.2
∆% AE Jan	2.4	1.2	2.4
Dec 2019	-0.1	-0.1	0.0
∆% AE Dec	-1.2	-1.2	0.0
Nov	-0.2	-0.1	-0.2
Oct	-0.1	-0.1	-0.1
Sep	-0.1	-0.1	-0.1
Aug	0.0	0.2	0.0
∆% AE Aug-Nov	-1.2	-0.3	-1.2
Jul	0.3	0.4	0.4
∆% AE Jul	3.7	4.9	4.9
Jun	-0.1	0.1	-0.1
∆% AE Jun	-1.2	1.2	-1.2
May	0.3	0.1	0.3
Apr	0.3	0.2	0.3
Mar	0.1	-0.1	0.1
∆% AE Mar-May	2.8	0.8	2.8
Feb	0.3	0.2	0.2
Jan	0.0	0.3	0.1
∆% AE Jan-Feb	1.8	3.0	1.8
Dec 2018	-0.3	0.2	-0.3
∆% AE Dec	-3.5	2.4	-3.5
Nov	0.1	0.1	0.0
Oct	0.3	0.3	0.3
Sep	0.3	0.2	0.3
∆% AE Sep-Nov	2.8	2.4	2.4
Aug	0.3	0.2	0.3
Jul	0.0	0.1	0.0
∆% AE Jul-Aug	1.8	1.8	1.8
Jun	0.3	0.4	0.3
∆% AE Jun	3.7	4.9	3.7
May	0.5	0.3	0.4
Apr	0.4	0.2	0.4
Mar	0.3	0.1	0.2
∆% AE Mar-May	4.9	2.4	4.1
Feb	0.0	0.3	0.1
Jan	0.3	0.4	0.2
∆% AE Jan-Feb	1.8	4.3	1.8
Dec 2017	0.3	0.1	0.3
Nov	0.4	0.2	0.3
∆% AE Nov-Dec	4.3	1.8	3.7
Oct	0.2	0.2	0.3
Sep	0.2	-0.1	0.2
Aug	0.4	0.3	0.4
∆% AE Aug-Oct	3.7	1.2	3.7
Jul	0.2	0.2	0.2
Jun	0.0	0.2	0.0
May	0.1	0.1	0.1
∆% AE May-Jul	1.2	2.0	1.2
Apr	0.3	0.4	0.4
Mar	0.5	0.4	0.3
∆% AE Mar-Apr	4.9	4.9	4.3
Feb	0.2	0.0	0.2
∆% AE Feb	2.4	0.0	2.4
Jan	0.6	0.5	0.5
∆% AE Jan	7.4	6.2	6.2
Dec 2016	0.3	0.1	0.3
Nov	0.1	0.1	0.0
∆% AE Nov-Dec	2.4	1.2	1.8
Oct	0.7	0.5	0.7
Sep	0.3	0.0	0.3
Aug	0.2	0.2	0.2
∆% AE Aug-Oct	4.9	2.8	4.9
Jul	0.2	0.6	0.2
Jun	0.3	0.1	0.3
May	0.1	0.1	0.0
∆% AE May-Jul	2.4	3.2	2.0
Apr	0.4	0.2	0.4
Mar	0.5	0.1	0.4
Feb	0.1	0.1	0.1
∆% AE Feb-Apr	4.1	1.6	3.7
Jan	-0.1	0.2	0.0
∆% AE Jan	-1.2	2.4	0.0
Dec 2015	-0.3	0.2	-0.2
Nov	-0.2	-0.2	-0.2
Oct	-0.2	-0.1	-0.2
Sep	-0.1	0.1	-0.1
∆% AE Sep-Dec	-2.4	0.0	-2.1
Aug	-0.5	-0.1	-0.5
∆% AE Aug	-5.8	-1.2	-5.8
Jul	-0.2	0.0	-0.1
Jun	0.0	0.0	0.0
∆% AE Jun-Jul	-1.2	0.0	-0.6
May	0.1	0.0	0.0
Apr	0.1	0.0	0.1
Mar	0.1	0.0	0.2
Feb	0.2	0.0	0.1
∆% AE Feb-May	1.5	0.0	1.2
Jan	-0.5	0.2	-0.3
Dec 2014	-0.5	0.0	-0.5
Nov	-0.1	0.2	-0.1
∆% AE Nov-Jan	-4.3	1.6	-3.5
Oct	-0.6	-0.2	-0.5
Sep	-0.2	-0.1	-0.1
∆% AE Sep-Oct	-4.7	-1.8	-3.5
Aug	-0.1	0.1	-0.1
Jul	-0.1	-0.1	0.0
Jun	-0.1	0.0	-0.2
May	-0.1	0.0	-0.1
Apr	0.1	0.0	0.0
∆% AE Apr-Aug	-0.7	0.0	-1.0
Mar	0.1	0.2	0.3
Feb	0.1	0.2	0.1
Jan	0.3	0.5	0.3
∆% AE Jan-Mar	2.0	3.7	2.8
Dec 2013	0.0	0.1	-0.1
Nov	-0.2	-0.1	-0.1
Oct	-0.3	0.0	-0.2
Sep	0.0	0.0	0.0
∆% AE Sep-Dec	-1.5	0.0	-1.2
Aug	0.1	0.0	0.1
Jul	0.3	0.1	0.2
Jun	0.1	0.0	0.1
∆% AE Jun-Aug	2.0	0.4	1.6
May	0.0	0.0	0.0
Apr	-0.1	0.1	0.0
∆% AE Apr-May	-0.6	0.6	0.0
Mar	0.3	0.3	0.3
Feb	0.5	0.2	0.5
Jan	0.4	0.3	0.4
∆% AE Jan-Mar	4.9	3.2	4.9
Dec 2012	-0.2	-0.2	-0.2
Nov	-0.2	0.0	0.0
∆% AE Nov-Dec	-2.4	-1.2	-1.2
Oct	0.1	0.0	0.1
Sep	0.3	0.1	0.3
Aug	0.4	0.0	0.4
Jul	0.2	0.1	0.2
∆% AE Jul-Oct	3.0	0.6	3.0
Jun	-0.4	-0.1	-0.4
May	-0.2	0.0	-0.1
∆% AE May-Jun	-3.5	-0.6	-3.0
Apr	0.4	0.2	0.1
Mar	0.5	0.1	0.5
Feb	0.4	0.3	0.4
∆% AE Feb-Apr	5.3	2.4	4.1
Jan	0.2	-0.1	0.2
Dec 2011	-0.1	0.1	0.0
Nov	0.2	-0.1	0.1
∆% AE Nov-Jan	1.2	-0.4	1.2
Oct	0.0	-0.1	-0.1
Sep	0.2	0.1	0.3
Aug	0.0	0.3	0.0
Jul	0.3	0.3	0.3
Jun	0.2	0.2	0.3
May	0.1	0.1	0.1
∆% AE May-Oct	1.6	1.8	1.8
Apr	1.0	0.8	0.9
Mar	1.0	0.4	0.9
Feb	0.5	0.2	0.5
Jan	0.7	0.3	0.7
Jan-Apr ∆% AE	10.0	5.2	9.4
Dec 2010	0.5	0.1	0.4

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

Input prices in the UK have been more dynamic than output prices until the current event of risk aversion and portfolio reallocations, as shown by Table IV-16, but with sharp oscillations because of the commodity and raw material content. The UK Office for National Statistics introduced rebasing for 2010=100 of the producer price index with important revisions (http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/producer-price-index-rebasing--2010-100-/index.html). The 12-month rates of increase of input prices, even excluding food, tobacco, beverages and petroleum, are very high, reaching 16.9 percent in Sep 2011 for materials and fuels purchased and 10.6 percent excluding food, beverages and petroleum. Inflation in 12 months of materials and fuels purchased moderated to 5.7 percent in Mar 2012 and 3.2 percent excluding food, tobacco, beverages and petroleum with the rates falling further in Apr 2012 to 1.5 percent for materials and fuels purchased and 1.1 percent excluding food, tobacco, beverages and petroleum. Input-price inflation collapsed in the 12 months ending in Jul 2012 to minus 2.5 percent for materials and fuels purchased and minus 2.5 percent excluding food, beverages and tobacco. Inflation returned at 0.7 percent in the 12 months ending in Aug 2012 but minus 2.6 percent excluding food, tobacco, beverages and petroleum. Inflation of input prices in Sep 2012 was minus 1.2 percent and minus 3.1 percent excluding food, beverages and petroleum. In Nov 2012, inflation of input prices of all manufacturing and materials purchased was minus 0.2 percent in 12 months and minus 1.6 percent in 12 months excluding food, tobacco, beverages and petroleum. Inflation of materials and fuels purchased in 12 months was 0.4 percent in Dec 2012 and minus 1.2 percent excluding tobacco, beverages and petroleum. Inflation of inputs returned with 1.6 percent in the 12 months ending in Jan 2013 and minus 0.2 percent excluding various items, increasing to 2.0 percent in Feb 2013 and 1.0 percent excluding various items. In Mar 2013, inflation of all manufacturing materials and fuels increased 0.9 percent in 12 months and 1.6 percent excluding various items. Prices of all manufacturing materials and fuels increased 0.3 percent in the 12 months ending in Apr 2013 and increased 0.9 percent excluding food and other items. Prices of all manufacturing increased 1.4 percent in the 12 months ending in May 2013 and 0.4 percent excluding various items. In Jul 2013, prices of manufactured products increased 4.7 percent in 12 months and 2.1 percent excluding food, tobacco, beverages and petroleum. In Aug 2013, prices of manufactured products increased 1.8 percent in 12 months and 1.4 percent excluding items. Inflation of input prices in the 12 months ending in Sep 2013 was 1.0 percent and 0.4 percent excluding items. Inflation collapsed in Oct 2013, with 0.0 percent for all manufacturing materials and fuels and minus 0.2 percent excluding various items. In Nov 2013, inflation of all manufacturing materials and fuels purchased fell 0.9 percent in 12 months and excluding items 1.0 percent. In Dec 2013, input prices for all manufacturing fell 0.9 percent in 12 months and fell 1.4 percent with exclusions. Inflation of all manufacturing fell 2.9 percent in the 12 months ending in Jan 2014 and 2.8 percent with exclusions. Inflation of input prices fell 5.8 percent in the 12 months ending in Feb 2014 and 5.1 percent with exclusions. Inflation of input prices fell 6.3 percent in the 12 months ending in Mar 2014 and 5.4 percent excluding items. In Apr 2014, inflation of input prices fell 5.3 percent in 12 months and fell 5.0 with exclusions. Input prices decreased 5.8 percent in the 12 months ending in Aug 2020 and decreased 2.1 percent with exclusions. There is comparable experience with 22.1 percent inflation of materials and fuels purchased in 2008 and 16.9 percent excluding food, beverages and petroleum followed in 2009 by decline of 5.7 percent for materials and fuels purchased and decrease of 1.2 percent for the index excluding items. UK input and output inflation are sensitive to commodity price increases driven by carry trades from zero interest rates. The mirage of false deflation is also observed in input prices in 1997-9 and then again from 2001 to 2003.

Table IV-16, UK, Input Prices 12-Month ∆% NSA

	All Manufacturing Materials and Fuels Purchased	Excluding Food, Tobacco, Beverages and Petroleum
Aug 2020	-5.8	-2.1
Jul	-5.7	-1.2
Jun	-6.7	-0.9
May	-10.2	-1.0
Apr	-10.6	-0.7
Mar	-3.4	3.4
Feb	-0.2	1.8
Jan	1.6	1.0
Dec 2019	1.0	-0.2
Nov	-1.8	0.3
Oct	-5.0	0.1
Sep	-3.0	0.8
Aug	-0.9	2.6
Jul	0.9	2.9
Jun	0.3	2.1
May	1.4	2.1
Apr	4.6	4.3
Mar	3.1	2.9
Feb	4.1	4.4
Jan	2.7	4.5
Dec 2018	3.1	4.7
Nov	5.4	4.2
Oct	10.4	5.7
Sep	10.7	6.6
Aug	9.9	5.6
Jul	10.3	5.9
Jun	10.3	5.5
May	9.6	5.4
Apr	5.6	3.5
Mar	4.5	3.0
Feb	3.9	3.1
Jan	4.4	2.8
Dec 2017	5.6	4.5
Nov	7.7	4.7
Oct	5.0	3.4
Sep	8.3	6.5
Aug	8.2	6.7
Jul	6.4	5.2
Jun	9.9	9.8
May	12.1	9.9
Apr	15.3	9.6
Mar	16.8	10.8
Feb	19.3	11.3
Jan	19.9	11.8
Dec 2016	16.6	10.3
Nov	13.5	11.3
Oct	12.4	10.1
Sep	7.6	5.3
Aug	7.8	6.3
Jul	4.2	5.1
Jun	-0.5	-0.3
May	-4.3	-1.9
Apr	-7.1	-2.2
Mar	-6.6	-2.8
Feb	-8.0	-3.5
Jan	-8.2	-5.2
Dec 2015	-10.4	-6.6
Nov	-13.1	-8.5
Oct	-12.3	-6.8
Sep	-13.4	-5.7
Aug	-14.6	-6.1
Jul	-12.8	-4.7
Jun	-13.0	-4.5
May	-11.9	-4.0
Apr	-11.1	-3.8
Mar	-13.1	-4.4
Feb	-13.5	-4.0
Jan	-14.1	-3.2
Dec 2014	-11.6	-2.3
Nov	-8.3	-1.7
Oct	-8.1	-2.4
Sep	-7.4	-2.7
Aug	-7.5	-4.0
Jul	-7.5	-5.2
Jun	-4.6	-3.5
May	-3.9	-3.9
Apr	-5.3	-5.0
Mar	-6.3	-5.4
Feb	-5.8	-5.1
Jan	-2.9	-2.8
Dec 2013	-0.9	-1.4
Nov	-0.9	-1.0
Oct	0.0	-0.2
Sep	1.0	0.4
Aug	1.8	1.4
Jul	4.7	2.1
Jun	3.0	0.0
May	1.4	0.4
Apr	0.3	0.9
Mar	0.9	1.6
Feb	2.0	1.0
Jan	1.6	-0.2
Dec 2012	0.4	-1.2
Nov	-0.2	-1.6
Oct	-0.2	-2.1
Sep	-1.2	-3.1
Aug	0.7	-2.6
Jul	-2.5	-2.5
Jun	-1.7	-1.0
May	0.3	-0.5
Apr	1.5	1.1
Mar	5.7	3.2
Feb	7.5	4.4
Jan	6.4	3.9
Dec 2011	8.6	5.0
Nov	12.8	7.6
Oct	13.4	8.1
Sep	16.9	10.6
Aug	15.6	10.9
Jul	17.6	10.7
Jun	16.4	10.3
May	15.3	9.3
7Apr	16.9	10.2
Mar	13.5	7.8
Feb	13.9	9.2
Jan	13.2	9.6
Dec 2010	12.1	8.9
Year ∆%
2019	0.4	2.2
2018	7.3	4.7
2017	11.0	7.7
2016	2.0	2.6
2015	-12.8	-5.2
2014	-6.6	-3.7
2013	1.2	0.5
2012	1.3	-0.3
2011	14.5	9.1
2010	8.0	4.6
2009	-5.7	-1.2
2008	22.1	16.9
2007	2.9	2.5
2006	9.8	7.2
2005	10.9	7.0
2004	3.4	1.7
2003	1.1	-0.7
2002	-4.5	-4.8
2001	-1.1	-1.3
2000	7.3	3.8
1999	-1.3	-3.6
1998	-8.9	-4.6
1997	-8.3	-6.4

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

Table IV-17 provides monthly percentage changes of UK input prices for materials and fuels purchased and excluding food, tobacco, beverages and petroleum. There are strong waves of inflation of input prices in the UK similar to those worldwide (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html). In the first wave, input prices rose at the high annual equivalent rate of 30.6 percent in Jan-Apr 2011, driven by carry trades from unconventional monetary policy into commodity exposures. Inflation of input prices was at 31.8 percent annual equivalent in Oct-Dec 2010. In the second wave, alternating risk aversion caused annual equivalent inflation of minus 1.3 percent in May-Oct 2011. In the third wave, renewed risk aversion resulted in annual equivalent inflation of 0.0 percent in Nov-Dec 2011. In the fourth wave, annual equivalent inflation of input prices in the UK surged at 14.9 percent in Jan-Mar 2012 under relaxed risk aversion. In the fifth wave, annual equivalent inflation was minus 16.1 percent in Apr-Jul 2012 because of collapse of commodity prices during increasing risk aversion. In the sixth wave, annual equivalent inflation of materials and fuels purchased jumped to 23.9 percent in Aug 2012. In the seventh wave, annual equivalent inflation moderated to 3.0 percent in Sep-Dec 2012. In the eighth wave, annual equivalent inflation in Jan-Feb 2013 jumped to 24.6 percent. In the ninth wave, annual equivalent inflation of materials and fuels purchased was minus 9.5 percent in Mar-Jun 2013. In the tenth wave, annual equivalent inflation returned at 18.2 percent in annual equivalent in Jul 2013. In the eleventh wave, annual equivalent inflation was minus 8.4 percent in Aug-Nov 2013. In the twelfth wave, annual equivalent inflation of manufacturing materials and fuels was 3.7 percent in Dec 2013. In the thirteenth wave, annual equivalent inflation was minus 7.8 percent in Jan-Apr 2014. In the fourteenth wave, annual equivalent inflation returned at 2.4 percent in May 2014. In the fifteenth wave, annual equivalent inflation fell at 12.3 percent in Jun-Nov 2014. In the sixteenth wave, annual equivalent inflation fell at 34.4 percent in Dec 2014-Jan 2014. In the seventeenth wave, annual equivalent inflation increased at 6.6 percent in Feb-Apr 2015. In the eighteenth wave, annual equivalent inflation decreased at 19.9 percent in May-Aug 2015. In the nineteenth wave, annual equivalent inflation increased at 6.2 percent in Sep 2015. In the twentieth wave, annual equivalent inflation decreased at 7.4 percent in Oct-Dec 2015. In the twenty-first wave, annual equivalent inflation decreased at 14.5 percent in Jan 2016. In the twenty-second wave, annual equivalent inflation was at 12.2 percent in Feb-Apr 2016. In the twenty-third wave, annual equivalent inflation was at 32.9 percent in May-Jul 2016. In the twenty-fourth wave, annual equivalent inflation was 3.7 percent in Aug 2016. In the twenty-fifth wave, annual equivalent inflation was 4.9 percent in Sep 2016. In the twenty-sixth wave, annual equivalent inflation was 67.7 percent in Oct 2016. In the twenty-seventh wave, annual equivalent inflation was minus 7.0 percent in Nov 2016. In the twenty-eighth wave, annual equivalent inflation was 25.3 percent in Dec 2016 to January 2017. In the twenty-ninth wave, annual equivalent inflation of input prices was 0.0 percent in Feb 2017. In the thirtieth wave, annual inflation was at minus 6.4 percent in Mar-Apr 2017. In the thirty-first wave, annual equivalent inflation was at minus 3.9 percent in May-Jul 2017. In the thirty-second wave, annual equivalent inflation was at 18.5 percent in Aug-Nov 2017. In the thirty-third wave, annual equivalent inflation was at 3.7 percent in Dec 2017-Jan 2018. In the thirty-fourth wave, annual equivalent inflation was at minus 4.7 percent in Feb 2018. In the thirty-fifth wave, annual equivalent inflation was at 1.2 percent in Mar 2018. In the thirty-sixth wave, annual equivalent inflation was at 24.5 percent in Apr-May 2018. In the thirty-seventh wave, annual equivalent inflation was at 1.8 percent in Jun-Jul 2018. In the thirty-eighth wave, annual equivalent inflation was at 15.8 percent in Aug-Oct 2018. In the thirty-ninth wave, annual equivalent inflation was at minus 17.3 percent in Nov 2018-Jan 2019. In the fortieth wave, input prices increased at 12.7 percent annual equivalent in Feb 2019. In the forty-first wave, input prices decreased at 10.3 percent annual equivalent in Mar 2019. In the forty-second wave, input prices increased at 26.8 percent annual equivalent in Apr 2019. In the forty-third wave, input prices changed at 0.0 percent annual equivalent in May 2019. In the forty-fourth wave, input prices decreased at annual equivalent 9.2 percent in Jun 2019. In the forty-fifth wave, input prices increased at annual equivalent 8.7 percent in July 2019. In the forty-sixth wave, input prices fell at annual equivalent 8.8 percent in Aug-Oct 2019. In the forty-seventh wave, input prices increased at annual equivalent 8.3 percent in Nov 2019-Jan 2020. In the forty-eighth wave, input prices decreased at annual equivalent 34.9 percent in Feb-Apr 2020. In the forty-ninth wave, input prices increased at annual equivalent 22.8 percent in May-Jul 2020. In the fiftieth wave, input prices decreased at annual equivalent 4.7 percent in Aug 2020.

Table IV-17, UK Input Prices Month ∆% 

	All Manufacturing Materials and Fuels Purchased NSA	Excluding Food, Tobacco, Beverages and Petroleum SA
Aug 2020	-0.4	-0.6
∆% Aug	-4.7	-7.0
Jul	1.8	0.3
Jun	3.0	0.3
May	0.4	-0.6
∆% May-Jul	22.8	0.0
Apr	-5.6	-2.0
Mar	-4.0	0.6
Feb	-0.9	0.8
∆% Feb-Apr	-34.9	-2.5
Jan	0.3	0.9
Dec 2019	1.0	-0.2
Nov	0.7	0.0
∆% Nov-Jan	8.3	2.8
Oct	-1.1	-0.7
Sep	-0.9	-0.9
Aug	-0.3	0.3
∆% Aug-Oct	-8.8	-5.1
Jul	0.7	0.8
∆% Jul	8.7	10.0
Jun	-0.8	0.3
∆% Jun	-9.2	3.7
May	0.0	-0.4
∆% May	0.0	-4.7
Apr	2.0	1.7
∆% Apr	26.8	22.4
Mar	-0.9	-1.1
∆% Mar	-10.3	-12.4
Feb	1.0	0.3
∆% Feb	12.7	3.7
Jan	-0.3	-0.3
Dec 2018	-1.8	0.6
Nov	-2.6	-0.4
∆% Nov-Jan	-17.3	-0.4
Oct	0.9	-0.3
Sep	1.2	0.8
Aug	1.6	0.6
∆% Aug-Oct	15.8	4.5
Jul	0.0	0.2
Jun	0.3	0.4
∆% Jun-Jul	1.8	3.7
May	3.2	1.9
Apr	0.5	0.4
∆% Apr-May	24.5	14.7
Mar	0.1	0.2
∆% Mar	1.2	2.4
Feb	-0.4	0.5
∆% Feb	-4.7	6.2
Jan	0.2	-0.2
Dec 2017	0.4	0.4
∆% Dec-Jan	3.7	1.2
Nov	2.0	0.8
Oct	1.2	0.2
Sep	0.5	-0.4
Aug	2.0	1.3
∆% Aug-Nov	18.5	5.8
Jul	0.0	0.0
Jun	-0.4	0.5
May	-0.6	0.3
∆% May-Jul	-3.9	3.2
Apr	-0.6	-0.1
Mar	-0.5	0.0
∆% Mar-Apr	-6.4	-0.6
Feb	0.0	0.3
∆% Feb	0.0	3.7
Jan	1.4	1.4
Dec 2016	2.4	0.5
∆% Dec 2016-Jan 2017	25.3	12.0
Nov	-0.6	-0.6
∆% Nov	-7.0	-7.0
Oct	4.4	3.2
∆% Oct	67.7	45.9
Sep	0.4	-0.3
∆% Sep	4.9	-3.5
Aug	0.3	0.0
∆% Aug	3.7	0.0
Jul	3.2	4.3
Jun	1.7	0.7
May	2.3	0.3
∆% May-Jul	32.9	23.2
Apr	0.8	0.8
Mar	1.7	0.2
Feb	0.4	0.6
∆% Feb-Apr	12.2	6.6
Jan	-1.3	0.3
∆% Jan	-14.5	3.7
Dec 2015	-0.3	1.1
Nov	-1.6	-1.5
Oct	0.0	-1.3
∆% Oct-Dec	-7.4	-6.7
Sep	0.5	0.6
∆% Sep	6.2	7.4
Aug	-3.0	-1.4
Jul	-1.4	-0.4
Jun	-2.2	-0.6
May	-0.7	-0.2
∆% May-Aug	-19.9	-7.5
Apr	1.3	0.1
Mar	0.1	-0.7
Feb	0.2	-1.6
∆% Feb-Apr	6.6	-8.5
Jan	-3.6	-1.2
Dec 2014	-3.3	-0.9
∆% Dec-Jan	-34.4	-11.9
Nov	-0.8	0.1
Oct	-1.2	-0.2
Sep	-0.8	0.4
Aug	-1.0	0.3
Jul	-1.7	-0.3
Jun	-1.0	0.0
∆% Jun-Nov	-12.3	0.6
May	0.2	0.0
∆% May	2.4	0.0
Apr	-0.9	-0.3
Mar	-0.4	-0.4
Feb	-0.5	2.5
Jan	-0.9	-3.7
∆% Jan-Apr	-7.8	-5.8
Dec 2013	0.3	-0.5
∆% Dec	3.7	-5.8
Nov	-0.6	-0.5
Oct	-0.4	-0.3
Sep	-0.9	-0.9
Aug	-1.0	-0.5
∆% Aug-Nov	-8.4	-6.4
Jul	1.4	1.1
∆% Jul	18.2	14.0
Jun	-0.3	-0.3
May	-1.3	-1.1
Apr	-1.9	-0.8
Mar	0.2	0.1
∆% Mar-Jun	-9.5	-6.1
Feb	2.5	1.5
Jan	1.2	0.6
∆% Jan-Feb	24.6	13.3
Dec 2012	0.3	0.0
Nov	0.3	0.3
Oct	0.5	0.4
Sep	-0.1	0.2
∆% Sep-Dec	3.0	2.7
Aug	1.8	0.0
∆% Aug	23.9	0.0
Jul	-0.3	-0.7
Jun	-1.8	0.2
May	-2.4	-0.6
Apr	-1.3	-0.1
∆% Apr-Jul	-16.1	-3.5
Mar	1.3	-0.5
Feb	2.2	0.4
Jan	0.0	-0.4
∆% AE Jan-Mar	14.9	-2.0
Dec 2011	-0.3	-0.7
Nov	0.3	-0.1
∆% AE Nov-Dec	0.0	-4.7
Oct	-0.5	-0.6
Sep	1.8	0.5
Aug	-1.5	0.3
Jul	0.5	0.7
Jun	0.2	0.8
May	-1.1	0.6
∆% AE May-Oct	-1.3	4.7
Apr	2.8	2.1
Mar	3.0	0.6
Feb	1.1	0.1
Jan	2.1	0.7
∆% AE Jan-Apr	30.6	11.0
Dec 2010	3.5	1.7
Nov	0.9	0.4
Oct	2.5	1.7
∆% AE Oct-Dec	31.8	16.3

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

The UK Office for National Statistics also provides contributions in percentage points to the monthly and 12-month rates of inflation of manufactured products, shown in Table IV-18. There are contributions to 12-month percentage changes of 0.10 percentage points by food products, 0.24 percentage points by tobacco and alcohol, 0.04 percentage points by computer, electrical and optical and contribution of 0.01 percentage points by other manufactured products. There are diversified sources of contributions to 12 months output price inflation such as contribution of 0.01 percentage points by clothing, textile and leather and deduction of 0.02 percentage points by transport equipment. Petroleum deducted 1.26 percentage points. In general, contributions by products rich in commodities are the drivers of price changes. There were diversified contributions in percentage points to monthly inflation: deduction of 0.04 percentage points by petroleum and deduction of 0.02 percentage points by food products.

Table IV-18, UK, Contributions to Month and 12-Month Change in Prices of All Manufactured Products, Percentage Points, NSA

Aug 2020	12 Months % Points	12 Months ∆%	Month % Points	Month ∆%
Total %		-0.9		0.0
Food Products	0.10	0.8	-0.02	-0.2
Tobacco & Alcohol	0.24	2.7	0.00	0.1
Clothing, Textile & Leather	0.04	0.3	0.01	0.1
Paper and Printing	-0.02	-0.6	0.00	0.0
Petroleum	-1.26	-17.7	-0.04	-0.6
Chemicals & Pharmaceutical	-0.12	-1.8	0.00	0.0
Metal, Machinery & Equipment	0.07	1.1	-0.01	-0.1
Computer, Electrical & Optical	0.04	0.3	0.02	0.1
Transport Equipment	0.02	0.2	-0.02	-0.1
Other Manufactured Products	0.01	0.1	0.00	0.0

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

The UK Office for National Statistics also provides contributions in percentage points to the monthly and 12-month rates of inflation of input prices in Aug 2020, shown in Table IV-19. Crude oil is a large factor with deduction of 5.22 percentage points from the 12-month rate and deduction of 0.20 percentage points from the monthly rate in Aug 2020. Price changes also transfer to the domestic economy through the prices of imported inputs: imported metals contributed 0.88 percentage points to the 12-month rate and contributed 0.28 percentage points to the Aug rate. Domestic food materials contributed 0.56 percentage points to the 12-month rate and deducted 0.26 percentage points from the Aug rate. Exposures and reversals of commodity exposures in carry trades during risk aversion are a major source of price and financial instability. There is also currency depreciation.

Table IV-19, UK, Contributions to Month and 12-Month Change in Prices of Inputs, Percentage Points NSA

Aug 2020	12 Months % Points	12 Months ∆%	Month % Points	Month ∆%
Total		-5.8		-0.4
Fuel	-0.08	-0.8	0.15	1.3
Crude Oil	-5.22	-30.8	-0.20	-1.6
Domestic Food Materials	0.56	4.1	-0.26	-1.8
Imported Food Materials	-0.15	-2.0	-0.09	-1.1
Other Domestic Produced Materials	-0.08	-2.4	0.00	0.0
Imported Metals	0.88	9.9	0.28	2.8
Imported Chemicals	-0.88	-6.5	-0.01	-0.1
Imported Parts and Equipment	-0.32	-1.8	-0.18	-0.9
Other Imported Materials	-0.52	-5.8	-0.10	-1.2

 Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2020

Consumer Price Index Consumer price inflation in the UK is in Table IV-20. The CPI index increased 0.4 percent in Jul 2020 and increased 1.0 percent in 12 months. The same inflation waves (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html) are present in UK CPI inflation. In the first wave in Jan-Apr 2011, annual equivalent inflation was at a high 6.5 percent. In the second wave in May-Jul 2011, annual equivalent inflation fell to only 0.4 percent. In the third wave in Aug-Nov 2011, annual equivalent inflation returned at 4.6 percent. In the fourth wave in Dec 2011 to Jan 2012, annual equivalent inflation was minus 0.6 percent because of decline of 0.5 percent in Jan 2012. In the fifth wave, annual equivalent inflation increased to 6.2 percent in Feb-Apr 2012. In the sixth wave, annual equivalent inflation was minus 3.0 percent in May-Jun 2012. In the seventh wave, annual equivalent inflation in Jul-Dec 2012 was 4.5 percent and 6.2 percent in Oct 2012 with the rate in Oct caused mostly by increases in university tuition payments. In the eighth wave, annual equivalent inflation was minus 5.8 percent in Jan 2013. In the ninth wave, annual equivalent inflation jumped to 4.3 percent in Feb-May 2013. In the tenth wave, annual equivalent inflation was minus 1.2 percent in Jun-Jul 2013. In the eleventh wave, annual equivalent inflation was 3.4 percent in Aug-Dec 2013. In the twelfth wave, annual equivalent inflation was minus 7.0 percent in Jan 2014. In the thirteenth wave, annual equivalent inflation returned at 4.5 percent in Feb-Apr 2014. In the fourteenth wave, annual equivalent inflation was minus 1.2 percent in May 2014. In the fifteenth wave, annual equivalent inflation was 2.4 percent in Jun 2014. In the sixteenth wave, annual equivalent inflation was minus 3.5 percent in Jul 2014. In the seventeenth wave, annual equivalent inflation was 2.0 percent in Aug-Oct 2014. In the eighteenth wave, annual equivalent inflation was minus 4.7 percent in Nov 2014-Jan 2015. In the nineteenth wave, annual equivalent inflation was 2.7 percent in Feb-May 2015. In the twentieth wave, annual equivalent inflation was minus 1.2 percent in Jun-Jul 2015. In the twenty-first wave, annual equivalent inflation was 2.4 percent in Aug 2015. In the twenty-second wave, annual equivalent inflation was minus 1.2 percent in Sep 2015. In the twenty-third wave, annual equivalent inflation was 0.8 percent in Oct-Dec 2015. In the twenty-fourth wave, annual equivalent inflation was minus 9.2 percent in Jan 2016. In the twenty-fifth wave, annual equivalent inflation was at 2.8 percent in Feb-Apr 2016. In the twenty-sixth wave, annual equivalent inflation was 2.4 percent in May-Jun 2016. In the twenty-seventh wave, annual equivalent inflation was minus 1.2 percent in Jul 2016. In the twenty-eighth wave, annual equivalent inflation was 2.4 percent in Aug-Nov 2016. In the twenty-ninth wave, annual equivalent inflation was 6.2 percent in Dec 2016. In the thirtieth wave, annual equivalent inflation was minus 5.8 percent in Jan 2017. In the thirty-first wave, annual equivalent inflation was 6.8 percent in Feb-Mar 2017. In the thirty-second wave, annual equivalent inflation was 4.9 percent in Apr-May 2017. In the thirty-third wave, annual equivalent inflation was at minus 0.6 percent in Jun-Jul 2017. In the thirty-fourth wave, annual equivalent inflation was at 5.5 percent in Aug-Sep 2017. In the thirty-fifth wave, annual equivalent inflation was at 1.2 percent in Oct 2017. In the thirty-sixth wave, annual equivalent inflation was at 4.3 percent in Nov-Dec 2017. In the thirty-seventh wave, annual equivalent inflation was at minus 5.8 percent in Jan 2018. In the thirty-eighth wave, annual equivalent inflation was at 3.0 percent in Feb-Mar 2018. In the thirty-ninth wave, annual equivalent inflation was at 4.9 percent in Apr-May 2018. In the fortieth wave, annual equivalent inflation was at 0.0 percent in Jun-Jul 2018. In the forty-first wave, annual equivalent inflation was at 8.7 percent in Aug 2018. In the forty-second wave, annual equivalent inflation was at 1.2 percent in Sep-Oct 2018. In the forty-third wave, annual equivalent inflation was at 2.4 percent in Nov-Dec 2018. In the forty-fourth wave, annual equivalent inflation was minus 9.2 percent in Jan 2019. In the forty-fifth wave, annual equivalent inflation was at 4.9 percent in Feb-May 2019. In the forty-sixth wave, annual equivalent inflation was at 0.0 percent in Jun-Jul 2019. In the forty-seventh wave, annual equivalent inflation was at 3.0 percent in Aug-Sep 2019. In the forty-eighth wave, annual equivalent inflation was at minus 2.4 percent in Oct 2019. In the forty-ninth wave, annual equivalent inflation was at 1.2 percent in Nov-Dec 2019. In the fiftieth wave, annual equivalent inflation was at minus 3.5 percent in Jan 2020. In the fifty-first wave, annual equivalent inflation was at 2.4 percent in Feb-Mar 2020. In the fifty-second wave, annual equivalent inflation was at minus 1.2 percent in Apr-May 2020. In the fifty-third wave, annual equivalent inflation was at 3.0 percent in Jun-Jul 2020. In the fifty-fourth wave, annual equivalent inflation was at minus 4.7 percent in Aug 2020.

Table IV-20, UK, Consumer Price Index All Items, Month and 12-Month ∆%

	Month ∆%	12 Months ∆%
Aug 2020	-0.4	0.2
AE ∆% Aug	-4.7
Jul	0.4	1.0
Jun	0.1	0.6
AE ∆% Jun-Jul	3.0
May	0.0	0.5
Apr	-0.2	0.8
AE ∆% Apr-May	-1.2
Mar	0.0	1.5
Feb	0.4	1.7
AE ∆% Feb-Mar	2.4
Jan	-0.3	1.8
AE ∆% Jan	-3.5
Dec 2019	0.0	1.3
Nov	0.2	1.5
AE ∆% Nov-Dec	1.2
Oct	-0.2	1.5
AE ∆% Oct	-2.4
Sep	0.1	1.7
Aug	0.4	1.7
AE ∆% Aug-Sep	3.0
Jul	0.0	2.1
Jun	0.0	2.0
AE ∆% Jun-Jul	0.0
May	0.3	2.0
Apr	0.6	2.1
Mar	0.2	1.9
Feb	0.5	1.9
AE ∆% Feb-May	4.9
Jan	-0.8	1.8
AE ∆% Jan	-9.2
Dec 2018	0.2	2.1
Nov	0.2	2.3
AE ∆% Nov-Dec	2.4
Oct	0.1	2.4
Sep	0.1	2.4
AE ∆% Sep-Oct	1.2
Aug	0.7	2.7
AE ∆% Aug	8.7
Jul	0.0	2.5
Jun	0.0	2.4
AE ∆% Jun-Jul	0.0
May	0.4	2.4
Apr	0.4	2.4
AE ∆% Apr-May	4.9
Mar	0.1	2.5
Feb	0.4	2.7
AE ∆% Feb-Mar	3.0
Jan	-0.5	3.0
AE ∆% Jan	-5.8
Dec 2017	0.4	3.0
Nov	0.3	3.1
AE ∆% Nov-Dec	4.3
Oct	0.1	3.0
AE ∆% Oct	1.2
Sep	0.3	3.0
Aug	0.6	2.9
AE ∆% Aug-Sep	5.5
Jul	-0.1	2.6
Jun	0.0	2.6
AE ∆% Jun-Jul	-0.6
May	0.3	2.9
Apr	0.5	2.7
AE ∆% Apr-May	4.9
Mar	0.4	2.3
Feb	0.7	2.3
AE ∆% Feb-Mar	6.8
Jan	-0.5	1.8
AE ∆% Jan	-5.8
Dec 2016	0.5	1.6
AE ∆% Dec	6.2
Nov	0.2	1.2
Oct	0.1	0.9
Sep	0.2	1.0
Aug	0.3	0.6
AE ∆% Aug-Nov	2.4
Jul	-0.1	0.6
AE ∆% Jul	-1.2
Jun	0.2	0.5
May	0.2	0.3
AE ∆% May-Jun	2.4
Apr	0.1	0.3
Mar	0.4	0.5
Feb	0.2	0.3
AE ∆% Feb-Apr	2.8
Jan	-0.8	0.3
AE ∆% Jan	-9.2
Dec 2015	0.1	0.2
Nov	0.0	0.1
Oct	0.1	-0.1
AE ∆% Oct-Dec	0.8
Sep	-0.1	-0.1
AE ∆% Sep	-1.2
Aug	0.2	0.0
AE ∆% Aug	2.4
Jul	-0.2	0.1
Jun	0.0	0.0
AE ∆% Jun-Jul	-1.2
May	0.2	0.1
Apr	0.2	-0.1
Mar	0.2	0.0
Feb	0.3	0.0
AE ∆% Feb-May	2.7
Jan	-0.9	0.3
Dec 2014	0.0	0.5
Nov	-0.3	1.0
AE ∆% Nov-Jan	-4.7
Oct	0.1	1.3
Sep	0.0	1.2
Aug	0.4	1.5
AE ∆% Aug-Oct	2.0
Jul	-0.3	1.6
AE ∆% Jul	-3.5
Jun	0.2	1.9
AE ∆% Jun	2.4
May	-0.1	1.5
AE ∆% May	-1.2
Apr	0.4	1.8
Mar	0.2	1.6
Feb	0.5	1.7
AE ∆% Feb-Apr	4.5
Jan	-0.6	1.9
AE ∆% Jan	-7.0
Dec 2013	0.4	2.0
Nov	0.1	2.1
Oct	0.1	2.2
Sep	0.4	2.7
Aug	0.4	2.7
AE ∆% Aug-Dec	3.4
Jul	0.0	2.8
Jun	-0.2	2.9
AE ∆% Jun-Jul	-1.2
May	0.2	2.7
Apr	0.2	2.4
Mar	0.3	2.8
Feb	0.7	2.8
AE ∆% Feb-May	4.3
Jan 2013	-0.5	2.7
AE ∆% Jan	-5.8
Dec 2012	0.5	2.7
Nov	0.2	2.7
Oct	0.5	2.7
Sep	0.4	2.2
Aug	0.5	2.5
Jul	0.1	2.6
AE ∆% Jul-Dec	4.5
Jun	-0.4	2.4
May	-0.1	2.8
AE ∆% May-Jun	-3.0
Apr	0.6	3.0
Mar	0.3	3.5
Feb	0.6	3.4
AE ∆% Feb-Apr	6.2
Jan	-0.5	3.6
Dec 2011	0.4	4.2
AE ∆% Dec-Jan	-0.6
Nov	0.2	4.8
Oct	0.1	5.0
Sep	0.6	5.2
Aug	0.6	4.5
AE ∆% Aug-Nov	4.6
Jul	0.0	4.4
Jun	-0.1	4.2
May	0.2	4.5
May-Jul	0.4
Apr	1.0	4.5
Mar	0.3	4.0
Feb	0.7	4.4
Jan	0.1	4.0
AE ∆% Jan-Apr	6.5
Dec 2010	1.0	3.7
Nov	0.4	3.3
Oct	0.3	3.2
Sep	0.0	3.1
Aug	0.5	3.1
Jul	-0.2	3.1
Jun	0.1	3.2
May	0.2	3.4
Apr	0.6	3.7
Mar	0.6	3.4
Feb	0.4	3.0
Jan	-0.2	3.5

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2020

Inflation has been unusually high in the UK since 2006, as shown in Table IV-21. There were not rates of inflation close to 2.0 percent in the period from 1997 to 2004. Inflation exceeded 2 percent from 2005 to 2013, reaching 3.6 percent in 2008, 4.5 percent in 2011 and 2.8 percent in 2012. Annual inflation in 2013 was 2.6 percent, declining to 1.5 percent in 2014. Annual inflation in 2015 was nil and 0.7 percent in 2016. Inflation jumped to 2.7 percent in 2017 and 2.5 percent in 2018. Annual inflation in 2019 was 1.8 percent.

Table IV-21, UK, Consumer Price Index, Annual ∆%

Year	Annual ∆%
1998	1.6
1999	1.3
2000	0.8
2001	1.2
2002	1.3
2003	1.4
2004	1.3
2005	2.1
2006	2.3
2007	2.3
2008	3.6
2009	2.2
2010	3.3
2011	4.5
2012	2.8
2013	2.6
2014	1.5
2015	0.0
2016	0.7
2017	2.7
2018	2.5
2019	1.8

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2020

In the rate of minus 0.4 percent for Aug 2020, clothing and footwear deducted 0.05 percentage points; furniture and household goods added 0.03 percentage points; and transport added 0.16 percentage points. Contributions of percentage points to the 12-month rate of price inflation of 0.2 percent are in the second column in Table IV-22. Food and nonalcoholic beverages added 0.04 percentage points; alcohol and tobacco added 0.08 percentage points; housing and household services deducted 0.11 percentage points while transport deducted 0.16 percentage points.

Table IV-22, UK, Consumer Price Index Month and Twelve-month Percentage Point Contributions to Change by Components

Aug 2020	Percentage Point Contribution 12 months to Aug	Percentage Point Contribution to Aug
CPI All Items ∆%	0.2	-0.4
Food & Non-Alcoholic Beverages	0.04	0.01
Alcohol & Tobacco	0.08	-0.02
Clothing & Footwear	-0.07	0.03
Housing & Household Services	-0.11	0.01
Furniture & Household Goods	0.04	0.03
Health	0.07	-0.02
Transport	-0.16	0.16
Communication	0.09	0.00
Recreation & Culture	0.45	-0.08
Education	0.06	0.00
Restaurants & Hotels	-0.34	-0.57
Miscellaneous Goods & Services	0.09	0.02
Rounding Effects	-0.04	0.03

Note: there are rounding effects in contributions

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2020

 

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.