Indeed, I seem to remember a report being issued (although I don't have a link) that stated that real inflation, was anywhere between 0% and 9.5%.

The best case scenario was if you lived at home and scrounged off your parents, in this case you may actually experience deflation (thanks to all those cheap ipods...)

The worst was if you were a pensioner, due to the very real cost of fuel costs rising.

Me?   I'm being hammered by huge increases in housing costs (relative to older folk that purchased a decade ago) especially compared to my income.  Rents around here are rising faster than the rate of inflation....
Of course Brown changed which measure of inflation he uses, to the one where housing costs are not considered.  This was to prevent house price increases from causing runaway inflation, and to prevent public sector workers from demanding payrises to pay for more expensive housing.  This (along with a multitude of other reasons) is why I'm far from impressed with our so-called "prudent" Chancellor.

I don't believe the 2% inflation figure for one second.

Plus, I have to comment on fuel duty.  Although the real cost of motoring has decreased, that's mainly due to cheap credit and cheaper cars.
The cost of FUEL has increased above the rate of inflation.  I don't see how it is fair that the Chancellor can increase his tax take on fuel pushing the total cost up beyond inflation.

Plus no one ever mentions that there is a component of tax on fuel that increases with inflation.  VAT.

In late 2003, I could buy petrol for 77p/litre.  VAT accounted for 13.475p

Now in 2006 petrol is 85p/litre.  VAT accounts for 14.875p

That's a 10% rise on VAT receipts.  In a period where inflation has supposedly been 6%  So the Chancellor has already had his inflation busting increase in VAT receipts from fuel.

The price of fuel, as mentioned, has already gone up beyond inflation.  The excuse that the treasury receives less total cash (adjusted for inflation) because there has not been inflation increases on (fixed) fuel duty just will not wash with the public.  Especially considering the vast increases of Stamp Duty receipts, North Sea revenues and VAT recipes on home fuel (5% of a 30% rise in consumer costs).

Nope, Gordon has massively increased tax take, and we've got little to nothing to show for it.  Especially as most of our new schools/hospitals are now PFI, which is the government equivalent of buying it on a credit card and only paying the interest charges.  

Not impressed

Andy

In late 2003, I could buy petrol for 77p/litre. VAT accounted for 13.475p

Now in 2006 petrol is 85p/litre. VAT accounts for 14.875p

The VAT components on those two prices are 11.47p and 12.66p respectively, still a 10% increase though as you say, however that isn't enough to compensate for the below inflation rise in duty. In any event petrol prices should be rising above inflation, seen the price of oil lately? In order for the market to respond rationally to peak oil we need clear price signals. If the price of oil triples and we are still debating whether the retail price of fuel has or hasn't kept in line with inflation we have a problem!
Oops, right you are, schoolboy error there.

Can't believe I did that.

Ironically petrol prices are rising above inflation.

At 77p/litre petrol is 18.4p for the actual petrol, the rest is tax.

At 85p/litre petrol is 25.2p/litre

That works out at 11% per year inflation over the last 3 years on the cost of the actual petrol.

So the huge duty actually acts as an insulator to the product costs.

Oh, the irony....

Andy

There was a recent report in the Telegraph on the varying rates of inflation for different types of people. It varied from over 8% for pensioners to - 1% for young people living at home (all those cheap MP3 players). Families were at about 5%.
Taxes don't end up in the Chancellor's pocket.  They pay for all the goodies we citizens get from the government.  We shouldn't complain about taxes per se.  Of course if we think he's spending it on the wrong things that's another matter.