Q1 Inflation Falls to 1.7%
Tuesday, April 15, 2014 at 10:37AM Click here for our Clash of the Titans page.
Q1 '14 Inflation: 1.7%
Average Prediction: 2.4%
Number of Correct Forecasts: 1/419
Current S&P 500 High: 1890 (2nd April)
Competition Progress: 33.3% complete
The official CPI inflation rate for March was announced by the ONS today, which showed that inflation over the first quarter averaged 1.7% (Jan: 1.9%, Feb: 1.7%, Mar: 1.6%) compared to 2.1% in the final quarter of 2013. The inflation rate has been falling since June 2013, and is now considerably below the 2% target the Bank of England is charged with aiming for.
Back in December, when we held our Clash of the Titans economic forecasting competition, barely anyone predicted inflation would fall this far. The average forecast was 2.4% (although all three of our official Titans thought it would be lower than that), and only one entry (out of over 400) correctly predicted 1.7% this quarter. 95% of our competition entrants forecast an inflation rate of 2% or over at this point in the year.
Out of the three Titans, Ros Altmann (from LSE) was closest, with a prediction of 1.9%, compared to Stephen King (2%) and Kevin Daly (2.1%). The differences seem small, but that was enough to propel Ros into first place, at least for the time being. All three Titans are very close at the moment, with only the tiebreaker separating 2nd and 3rd place.
The next update for the competition comes at the end of the month, on 29th April, when the preliminary estimate for Q1 GDP growth is announced. It will be fascinating to see how fast (or slowly) the economy has grown. The average rate forecast in the competition was 0.7%, but so far our entrants have been consistently too pessimistic about the economic recovery.
Click here for a summary of the results so far, or here for the full standings.