Inflation inflates as Osborne clamps down on taxes

CPI has been pushed up by airfares, apparently - while George Osborne is busy trying to convince his G8 compadres to sign up to his tax transparency plans.

by Emma Haslett
Last Updated: 16 Jul 2013

Consumer price inflation (the government’s preferred measure) rose last month and appropriately enough, given the fact that the Paris Air Show is currently in full swing, it’s been driven by soaring (arf, arf) air fares.

According to figures from the Office for National Statistics, inflation rose to 2.7%, after a slight dip to 2.4% in April. Retail price inflation, which companies tend to use to figure out payrises, increased to 3.1%, up from 2.9% in April.

Apparently, airfares rose by a wallet-shrivelling 22% month-on-month in May, which the ONS (un)helpfully pointed out is the biggest month-on-month rise between April and May since records began in 2001. Great. MT has already mentally downgraded its summer getaway from sun-kissed Portugese villa to rainy camping holiday in Wales.

Although the Bank of England governor is supposed to write a groveling letter to the Chancellor each time inflation rises above 2%, it’s actually not a bad result. Having dropped by almost half from its peak of 5.2%, consumers have had a breather over the past few months – although we’d hope it peaks at some point in the not-too-distant future.

To be fair, George Osborne is unlikely to pay much attention to the letter, given that he’s involved in some fairly heavy negotiations during the final day of the G8.

He’s proposed the idea of a register showing who benefits from offshore ‘shell’ companies. It’s not terribly clear how it’ll work – but the chancellor hopes that other G8 nations will sign up to the idea, allowing them to share details of tax avoiders as freely and easily as tech companies share with the US government how often each of us watches a video about kittens…

The good news is that Osborne reckons more has been done to reform the global tax system in the past 24 hours ‘than during the past 24 years’, and expects an announcement by the end of the conference.

On this morning’s Today programme, he said that the ‘informal’ nature of meetings was one of the conference’s strengths.

‘Basically I am doing what I was asked to do, which is turn up in smart-casual wear,’ he said.

MT is resisting the temptation to point out that this is true – and therefore, if he can’t get agreement on his plans from the rest of the G8, he’s basically spent the weekend emulating a slightly saggy Ralph Lauren model. Quick, George: strike your best Blue Steel.

- Image: Flickr/Kuster & Wildhaber Photography

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