Measures of
underlying inflation increased by 1/2 per cent in the June quarter and, with the exception of the market goods and services excluding volatile items measure, increased by between 2 1/2 and 3 per cent in year - ended terms (Graph 69).
Not exact matches
U.S. consumer prices
increased in January, with a gauge of
underlying inflation posting its largest gain in 12 months, bolstering views that price pressures will accelerate this year.
The weak economic performance in the first half of this year means that Canada has more excess capacity, which is
increasing the downward pressure on the
underlying trend in
inflation.
As economies become more integrated, and as the share of goods and services that are «tradable,» or are affected by trade,
increases, the challenge of extracting some measure of
underlying or trend
inflation gets more interesting.
Instead, our central forecast is for
underlying inflation to gradually rise over the next couple of years, and for headline
inflation to
increase a bit more quickly, boosted by
increases in oil and tobacco prices.
In the face of
increased uncertainty about
underlying productivity growth, many economists now argue that a central bank should not try to restrain an expansion until there is visible evidence that
inflation is rising.
According to the minutes of the meeting, a 25 - basis point
increase in the bank rate was fully factored in by the markets in the run - up to November's MPC meeting, and the interest - rate curve
underlying the November
Inflation Report projected interest rates at 1 percent by the end of the three - year forecast period, higher than the recent median estimates of economists polled by Reuters.
Various measures of core or
underlying inflation, which are less affected by these temporary factors, are also gradually
increasing, and over the year to September were around 2 per cent.
The changes to the forecasts for
inflation over the years to June 2000 and June 2001 (excluding the effect of the GST) appear to reflect current and prospective developments in oil and tobacco prices as well as a modest
increase in the assessment of
underlying inflationary pressures.
Measures of
underlying inflation, which are less sensitive to movements in the volatile components of the CPI, indicate that
inflation has gradually
increased to around 2 1/2 per cent from its recent trough of around 1 1/2 per cent (Graph 37).
This partially reflects the view held by some respondents of a pick - up in
underlying inflation, but it also reflects an
increase in the number of respondents who have incorporated an estimate of the first - year effect of the GST into their
inflation forecasts.
Inflation has, nonetheless, edged higher over the past year or two, with
underlying measures having
increased from a low of around 1 1/2 per cent in late 1997 to around 2 per cent now.
The large rise in the house purchase component of the CPI over the past year has contributed to the
increase in the CPI and to most measures of
underlying inflation.
That suggests that
underlying inflation pressures from such things as wage
increases remain muted.
The Board's assessment throughout this period has been that, with strong growth, a gradual
increase in
underlying inflation, and firming demand for credit, interest rates needed to rise to lessen the risks of higher
inflation in the future.
It is possible, against a background of
increasing inflation and a strengthening labour market, that the survey is signalling some pick - up in
underlying wage pressures, but at this stage the extent of any such pick - up is difficult to assess.
U.S. producer prices rose more than expected in January, recording their largest gain in more than four years amid
increases in the cost of energy products and some services, but a strong dollar continued to keep
underlying inflation tame.
It is noteworthy that this
increase is happening as the New York Fed's
Underlying Inflation Gauge (UIG) hit another high for this recovery, rising from 3.01 % in January to 3.06 % in February.
U.S. producer prices unexpectedly rose in November as the cost of services
increased, but the
underlying trend continued to point to weak
inflation pressures.
The exclusion of health services, as well as a number of other services provided by the public sector, largely explains the relatively modest
increase in the market goods and services excluding volatile items measure of
underlying inflation over the past year.
Given the pick - up in upstream prices over the past year and the waning of the drag from exchange rate effects,
underlying inflation remains likely to
increase gradually in the period ahead.
Taking these factors into account, the Bank's forecast is that
underlying inflation will
increase gradually from its current level to around 3 per cent by the end of next year.
In the short term, headline CPI
inflation will be pushed higher than
underlying measures by the recent
increases in petrol prices.
Both are largely dependent upon
inflation for growth in the
underlying asset, as well as for the cash flow to
increase.
Furthermore, as the
underlying properties of the REITs
increases in value, so does their rentals and distributions; so you don't need not be concerned about
inflation because your passive income will steadily
increase over time.
Because during times of high
inflation, you will have a larger than normal income stream funded by
underlying rents that can be
increased to keep up with
inflation.
Regardless of the
underlying cause of an
inflation, a general
increase in prices will always benefit some at the expense of others.
The difference is that the coupon payments and
underlying principal are automatically
increased to compensate for
inflation as measured by the consumer price index (CPI).
The research highlighted how the majority of the
increase could be attributable to the impact of mergers, team hires and fee
inflation, rather than a significant improvement in
underlying levels of work for existing teams.
Appreciation is the
increase in a property's price that results from
inflation and possibly a rise in the
underlying value of the property (what stock investors call «alpha»).