UK inflation 68% higher than official numbers
Truflation, a FinTech delivering accurate, real-time inflation figures, has launched its UK index showing CPIH inflation running at 13.8%. This is 68.3% higher than the official figure of 8.2% released by the UK’s Office for National Statistics (ONS) last week.
CPIH, which is the measure of inflation published by the ONS that includes the rising cost of housing, is officially running at 8.2% in the 12 months to June 2022. However, Truflation’s newly launched UK index shows CPIH running at 13.8% in the 12 months to 24 July – nearly two-thirds higher and 6% more in real terms.
The rising cost of privately rented housing is a significant factor in the discrepancy between these two figures. According to the ONS, private rents in the UK grew by 3% in the year to June 2022, while Truflation’s more up-to-date figures show growth closer to 10% in the year to 24 July.
Meanwhile, official ONS figures show mortgage interest rates increased by 46 basis points, or by around 30%, between November and May to reach 1.95% – the fastest pace of growth over a six-month period since 2012. However, Truflation’s data shows this growth to be closer to 50%: a rate the firm suspects is only being held down by fixed-rate mortgages, many of which will soon expire.
Stefan Rust, founder, and CEO of Truflation, says: “Current inflation measurements around the world are using methodologies that are over a century old. How can we make informed and timely decisions using metrics that pre-date WWI; before the internet, mobile phones, social media, or data analytics?
“We are now waiting each month for outdated data releases while real-time information is all around, ready to be aggregated, processed, and used by businesses, investors, consumers, and even the policymakers should they so choose.”
Truflation vs. the CPI
UK inflation is measured using the consumer price index, or CPI, which uses surveys to verify market prices, while CPIH includes the rising cost of housing. In contrast, Truflation’s UK metrics are based on robust price information from merchants and aggregators that accurately calculates price differences.
While the official CPI calculates the price of a fixed basket of goods using approximately 180,000 price points of different items that are aggregated over a month-long period, Truflation automatically fetches over 8 million data points and delivers real-time price data on a daily basis. This is powered by live data feeds from the leading decentralized oracle network, Chainlink.
Truflation launched its US index in December 2021. This is currently showing inflation in the United States at 9.86% in the 12 months to 26 July – almost a percentage point higher than the 9.1% the country’s Labour Department quoted in its most recent release. This has, however, narrowed from an average discrepancy of around 2% since launch.
By measuring inflation more accurately and in a more timely fashion, Truflation hopes to improve business processes and decision-making for everything from procurement and supply chain optimization to resource planning, marketing, and pricing.
The project is quickly expanding into new markets, is completely customizable, and can be easily scaled and rolled out across different countries, markets, and geographies using the same reliable methodology.