CPI Inflation Hits 2% Target
Tuesday, January 14, 2014 at 2:43PM Click here for our Clash of the Titans page.
Q4 '13 Inflation: 2.1%
Average Prediction: 2.4%
Number of Correct Forecasts: 25/419
Current S&P 500 High: 1842 (10th Jan)
Competition Progress: 7.4% complete
CPI for December 2013 fell to 2%, the Bank of England's inflation target, for the first time since 2009, dragging the fourth quarter average to 2.1% (the October and November figures were 2.2% and 2.1% respectively). This low figure was driven largely by the prices of food and non-alcoholic beverages, and recreational goods and services. Reaching 2.0% is an important psychological milestone, particularly for policymakers at the Bank of England, who will be even more reluctant to change interest rates now.
The quarterly average was lower than expected, with our average forecast coming in at 2.4%. Only 25 out of the 419 participants in our forecasting competition got it exactly right, while 88% of the entries forecast a rate of 2.2% or higher. This includes two of our official competitors, Kevin Daly (2.2%) and Ros Altmann (2.4%); however, Stephen King was exactly right, and has gone into an early lead in the competition as a result.
Until we get at least one full quarter of results, however, the standings mean very little - and that won't be until the end of February. The next date in the calendar is the 28th January, when we get the preliminary estimate for Q4 GDP growth. The average forecast was for +0.8%, with over three quarters of all our forecasts falling somewhere between +0.6% and +1.0%. Meanwhile, only two people thought that we would see negative growth in Q4 '13.
Click here for a summary of the results so far, or here for the full standings.