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What is your real rate of inflation?

Basket of shopping
More Or Less
Monday, 21 April, 2008
BBC Radio 4, 1630 BST

Are we being hoodwinked into thinking that inflation is lower than it really is?

British newspapers and supermarkets are starting to publish their own inflation rate checkers and this has got us thinking.

The government's headline measure of inflation, the Consumer Price Index, is 2.5% but Asda supermarket has estimated that for their average shopper the cost of living is rising at over 5%.

More Or Less presenter Tim Harford points out that actually Asda has produced an estimate of how much cash a typical family has left after buying essentials, not a rate of inflation.

So the Office for National Statistics is not falling over itself to copy the Asda methodology.

Tim chats to economic statistician Michael Ward who points out that the measure of inflation that the prime minister tends to quote - the Consumer Price Index - is much lower than the traditional measure, the Retail Price Index.

Paul Dales at Capital Economics tells us that, in reality, it is an impossible mission to find an exact rate of inflation.

So Tim went to the pub instead, with the consolation that you can measure your own personal inflation rate by clicking on the Office of National Statistics website or the Capital Economics website.

Arts and maths

Marcus Du Sautoy
Marcus Du Sautoy on stage during a performance of The 19th Step

Oxford mathematician Marcus Du Sautoy has found himself a Media Fellowship Grant to combine the arts of dance, music and sculpture with - wait for it - mathematics.

More Or Less gets exclusive access to the rehearsal of his latest show, The 19th Step, which is performed in front of Boundstone Community College in Lancing, West Sussex.

The responses from pupils and parents are, well, varied. But that is not going to stop Du Sautoy and his bright sartorial elegance.

Company valuations

How are companies valued? Revenue? Profits? Growth rate?

What about those websites that have millions of free customers, how is their worth valued for example?

Company valuations used to be based on tangible measures like price/earnings ratio and capital valuations. But the valuations of hi-tech companies like Facebook and Yahoo greatly exceed these traditional calculations.

So where do the billion-dollar price tags come from? Tim Harford asks his colleague at the Financial Times, John Gapper, and blogger and venture capitalist Paul Kedrosky.

Immigration

"Migrant crime wave a myth" (The Guardian)
"Immigrants bring more crime" (Daily Express)

Both these headlines refered to the same story, so has immigration caused a crime wave or not? Our reporter Ruth Alexander tries to find the truth.

More or Less asks Richard Garside, the director of the Centre for Crime and Justice Studies at King's College London, and decides that actually neither story is right.

There is no statistical evidence to prove either.

BBC Radio 4's More or Less will be broadcast on Monday, 21 April, 2008 at 1630 BST.


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SEE ALSO
UK inflation held steady in March
15 Apr 08 |  Business

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