2015 Remains Year of "No-flation"
Tuesday, October 13, 2015 at 9:34AM Click here for our Clash of the Titans page.
Q3 '15 Inflation: 0%
Average Prediction: 1.4%
Number of Correct Forecasts: 0/462
Weakest Yen to Dollar Rate: 126 (7th Jun)
Competition Progress: 85.2% complete
The average rate of inflation in the third quarter of 2015 was 0% (made up of individual monthly rates of 0.1% in July, 0% in August, and -0.1% in September). Combined with quarterly rates of 0% in Q2 and 0.1% in Q1, this paints a picture of a year of "no-flation" for the UK in 2015. When our forecasters entered the Clash of the Titans competition in December, almost everyone expected inflation to decline to a trough in mid-2015 before recovering, but very few people thought that trough would be much below 1%. Not a single competition entry correctly predicted the average inflation rate of 0% this quarter.
In fact, the same number of entries (41) thought inflation would be less than 1% as thought it would be more than 2% by this point in the year (and only 5 people forecast a rate lower than 0.5% - the same number as thought it would be higher than 3%), with the vast majority going for somewhere in between. Clearly, nobody expected prices to remain so flat, and this is mostly down to the scale of the oil price collapse, which was only hinted at by the beginning of December 2014.
LSE's Michael McMahon and Cambridge's John Llewellyn both forecast a rate of 1.3%, lower than Kate Barker's 1.8%, and as a result Michael remains in a convincing lead. Barring any major revisions to previous data, it looks a certainty that LSE will win the competition for a second time.
Our penultimate big update to the competition will come on 27th October, when we receive the preliminary estimate of Q3 GDP growth, as well as any revisions to previous GDP figures. Although the official Titans' competition now looks fairly complete, there is plenty of potential for movement in the public competition, with two people currently tied for first place.
Click here for a summary of the results so far, or here for the full standings.