AN old joke that never really ages: What’s the point of economists? To make astrologers looks good.
This gag surfaced again today when inflation came in at 10.4% for the year to February.
That isn’t just a bit higher than City economists were expecting, it’s miles higher. Some had guessed it at 9.6%, which in terms of how these things are measured is embarrassingly far off.
If the economics profession were trying to give the impression that it’s a bunch of pointy heads lost in data it misinterprets while the real world passes by outside, today was a good day.
Down at the WB Yeats, the finest hostelry in all of north London, even people who never normally notice inflation are moaning about it. Most conversations begin something like: “I just paid £20 for a sandwich and a coffee. What’s going on?”
So if economists and the Bank of England are surprised at today’s news, no one else is.
The cost of some things is plainly rising at much more than 10%. Moreover, the quality of the goods or services is getting worse.
“Nothing works” is a common remark.
The dismal defence for being this wrong goes like this: the reweighting of the Consumer Prices Index in February always makes forecasting hard. So the forecasts are even more likely than usual to be wrong this month. Glad we’ve got that cleared up.
And the direction of travel on inflation is still down, once energy costs fall. Unless something else happens that they didn’t foresee.
Shelley Von Strunckel, our excellent astrologist, is on page 38 of today’s paper.
