abi98
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I am about to start my A levels and have been given homework, it would be really helpful if you would read what I have written about inflation over 5 months and tell me what I should write to improve it. This is my first thing I have written about inflation, so it may suck. I need help!!!


Macroeconomics

Inflation

Inflation is a sustained increase in the cost of living or the general price level leading to a fall in the purchasing power of money. The rate of inflation is measured by the annual percentage change in consumer prices.

The UK Government has set has set an inflation target of 2% using the consumer prices index (CPI). It is the job of the bank of england to set policy interest rates so the inflationary pressures are controlled and the inflation target is reached. A fall in inflation is not the same as a fall in prices. Only when there's a deflation will then the general price level fall.

Inflation changes all the time as the graph below represents this. In Feburary 2014 the Retail price index percentage for inflation was at 2.7% and the consumer price index percenatge price was at 1.7%, these percentages fell in march having the RPI at 2.5% and the CPI at 1.6%. however in April the RPI stayed the same and the CPI rose to 1.8%, but when getting to May inflation fell again , the RPI being at 2.4% and the CPI being at 1.5%. the inflation of June 2014 rose just like April but even sharper. The consumer Price index rose to 1.9%, the percentage was puched up by consumer spending on clothing and footwear, food and non-alchoholic drinks, this show that prices are rising at a fast rate. As well as the RPI rising so did the CPI but not as much, the CPI of June 2014 was at 2.6%.


(and there is meant to be a graph below with all the percentages but couldn't upload it) thank
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username42
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(Original post by abi98)
I am about to start my A levels and have been given homework, it would be really helpful if you would read what I have written about inflation over 5 months and tell me what I should write to improve it. This is my first thing I have written about inflation, so it may suck. I need help!!!


Macroeconomics

Inflation

Inflation is a sustained increase in the cost of living or the general price level leading to a fall in the purchasing power of money. The rate of inflation is measured by the annual percentage change in consumer prices.

The UK Government has set has set an inflation target of 2% using the consumer prices index (CPI). It is the job of the bank of england to set policy interest rates so the inflationary pressures are controlled and the inflation target is reached. A fall in inflation is not the same as a fall in prices. Only when there's a deflation will then the general price level fall.

Inflation changes all the time as the graph below represents this. In Feburary 2014 the Retail price index percentage for inflation was at 2.7% and the consumer price index percenatge price was at 1.7%, these percentages fell in march having the RPI at 2.5% and the CPI at 1.6%. however in April the RPI stayed the same and the CPI rose to 1.8%, but when getting to May inflation fell again , the RPI being at 2.4% and the CPI being at 1.5%. the inflation of June 2014 rose just like April but even sharper. The consumer Price index rose to 1.9%, the percentage was puched up by consumer spending on clothing and footwear, food and non-alchoholic drinks, this show that prices are rising at a fast rate. As well as the RPI rising so did the CPI but not as much, the CPI of June 2014 was at 2.6%.


(and there is meant to be a graph below with all the percentages but couldn't upload it) thank
That all sounds fine, except I think you've mixed up CPI and RPI in your last sentence - RPI was at 2.6% and CPI at 1.9%. Do you want to explain the difference between RPI and CPI?
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gr8wizard10
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As above, RPI will nearly always be above CPI

Retail Price Index takes into account mortgage repayments.
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Procrastin8R
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(Original post by username42)
That all sounds fine, except I think you've mixed up CPI and RPI in your last sentence - RPI was at 2.6% and CPI at 1.9%. Do you want to explain the difference between RPI and CPI?
Could you explain the difference between them please?
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keynes24
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(Original post by Procrastin8R)
Could you explain the difference between them please?
Google?
http://www.google.co.uk/url?sa=t&rct...9gUorfLY_BKSVA
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Mike_123
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(Original post by abi98)
I am about to start my A levels and have been given homework, it would be really helpful if you would read what I have written about inflation over 5 months and tell me what I should write to improve it. This is my first thing I have written about inflation, so it may suck. I need help!!!


Macroeconomics

Inflation

Inflation is a sustained increase in the cost of living or the general price level leading to a fall in the purchasing power of money. The rate of inflation is measured by the annual percentage change in consumer prices.

The UK Government has set has set an inflation target of 2% using the consumer prices index (CPI). It is the job of the bank of england to set policy interest rates so the inflationary pressures are controlled and the inflation target is reached. A fall in inflation is not the same as a fall in prices. Only when there's a deflation will then the general price level fall.

Inflation changes all the time as the graph below represents this. In Feburary 2014 the Retail price index percentage for inflation was at 2.7% and the consumer price index percenatge price was at 1.7%, these percentages fell in march having the RPI at 2.5% and the CPI at 1.6%. however in April the RPI stayed the same and the CPI rose to 1.8%, but when getting to May inflation fell again , the RPI being at 2.4% and the CPI being at 1.5%. the inflation of June 2014 rose just like April but even sharper. The consumer Price index rose to 1.9%, the percentage was puched up by consumer spending on clothing and footwear, food and non-alchoholic drinks, this show that prices are rising at a fast rate. As well as the RPI rising so did the CPI but not as much, the CPI of June 2014 was at 2.6%.


(and there is meant to be a graph below with all the percentages but couldn't upload it) thank
Everything seems okay, maybe explain the difference between RPI and CPI and why this trend exists. Also, you might want to mention the BoE ±1% on the 2% CPI target and what must happen if this is breached.
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