Time to Re-Index Inflation

Everyone except Alistair Darling and Gordon Brown believes that inflation is much higher than 2.5%. Indeed, even the Office of National Statistics allow you to calculate your own personal inflation and say that National Inflation is nearer 4%.

NB: You will need to download Adobe's SVG Viewer first to calculate your own inflation - scroll half way down the adobe page to the download links, click on Win98-XP and run it, then go back to the National Statistics website.

My inflation (see graph on right) is running at around 5% and has been as high as 8% last year.

I'm a pretty average person, although I don't use my car much, so my inflation will be a lot lower than other people's.

The "basket of goods" change today and more new technology will undoubtedly be added, which isn't relevant as the price of technology naturally falls.

Unless mortgages and fuel prices are added to the inflation calculation, what hope have the Bank of England got in setting interest rates that are relevant to the country's economic state?

This fudging of the inflation figures could end up being dangerous if interest rates bear no resemblance to the real world.