Entry: Council Tax in Newham increases Six Times Faster than Inflation Friday, March 25, 2005



Since 1995, Council Taxes for a Band D home in the London Borough of Newham (our Mothership), have increased by a total of 93%.

But since 1995, the Consumer Price Index has only increased by less than 15%.  The UK Consumer Price Index is the Annual Rate of inflation that is quoted every 25 seconds by some newspaper, TV, Radio or government official, because it is supposed to be the Sacred Measure of the Cost of Living.

Year

Band "D" Council Tax

Annual Increase

Annual CPI Inflation Rate

1995

576

---

2.6

1996

594

3.1%

2.5

1997

648

9.1%

1.8

1998

679.5

4.9%

1.6

1999

704.43

3.7%

1.3

2000

768.13

9.0%

0.8

2001

827.66

7.7%

1.2

2002

884.5

6.9%

1.3

2003

1004.66

13.6%

1.4

2004

1059.04

5.4%

1.3

2005

1111.91

5.0%

1.6 (projected)



Who in their right mind can believe the fat pompous Gordon Brown when he smugly pats himself on the back for his management of the British economy?

Who in the new Millenium can still take the annual rate of inflation, CPI statistic as a serious reflection on the Cost of Living?  Economists?  Capital Investors?

   2 comments

Gerry
April 16, 2005   09:58 PM PDT
 
For the sake of Christian charity despite my headache from my bicycle accident, allow me to explain the EASY WAY on how cumulative annual inflation rates are calculated.

For the Council Tax Increase take the 2005 rate, divide by the 1995 rate (1111/576) = 1.928. Subtract 1 and multiply that by 100 to get the Percentage Increase of 93%.


For the Inflation Increase since 1995, go to the Consumer Price Index dataset. The Index in 1995 had a value of 97.6.

The Index in 2004 had a value of 111.2. So at a projected Annual rate of 1.6% for 2005, The index in 2005 will have a value of 111.2 x 1.016=112.98.

The cumulative increase from 1995 to 2005 for the CPI is therefore (112.98/97.6)-1, multiplied by 100 percent, which gives 15.7%.



Mr. Blogtastic
April 11, 2005   02:35 PM PDT
 
Your maths are awry.

You can't simply add up annual percentage rates to come to a total for the period because the base gets biiger each year (by the previous year's inflation rate).

You also need to factor into the Council Tax cost the extra bit that goes to the GLA, which didn't exist in 1995.

Nonetheless, it is staggering how far out of step council tax rises have been with general inflation.

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