So, big bad telecoms firms are to raise prices:
So, a simple question. Who is it that is ratcheting inflation upwards? Is it multinational corporations, such as these, or nurses, teachers and rail workers?
Isn’t the answer obvious?
And what is the government doing about this base of monopoly power? It is asking very nicely if they might not increase their prices so much, knowing full well that they will be ignored.
The actual report Spud has lifted this from:
Official figures on Wednesday are expected to show that inflation fell to about 10.2% in January, although it will remain among the highest rates in four decades.
Some telecoms providers also use the retail price index (RPI) measure of inflation, which is typically higher. Many firms are set to increase prices above inflation, with some adding up to 3.9 percentage points on top of the official rate.
BT and Vodafone add 3.9 percentage points to the rate of the December CPI. Virgin Media is pushing through an average 13.8% rise, although customers will have a month to decide whether they want to leave.
This week O2 will reveal the scale of its price rise, which is based on January’s RPI plus 3.9 percentage points. Given RPI in December was 13.4%, a typical customer could be facing a 17%-plus annual rise. The company said the real increase would be closer to 9-10% as it applied to calls and data only, not the significant cost of payments for handsets that are part of bills.
The contract says RPI perhaps plus a bit. So, that’s what the companies are using, the contractual terms.
But perhaps RPI is the wrong inflation rate to be using?
Retail trade union Usdaw is again calling on the Government to take immediate action to tackle the cost of living crisis, as inflation continues to grow and wages are devalued by rising prices. The Retail Prices Index rate of inflation increased to 12.3% today and the Consumer Prices Index reached 10.1%. Usdaw argues that RPI is a more accurate measure of inflation, particularly as it includes housing costs.
Uh, maybe not then. As far as I know Spud doesn’t have any consultancy agreements with Usdaw. If he did no doubt he’d soon put them right.