A long running debate between reader JohnH and just about anybody else on this website involves UK 2015 (1) inflation, and (2) real wages, with JohnH quoting from various documents. I thought it useful to GET THE DATA MYSELF to resolve the question. Below are three graphs, of consumer price level, year-on-year inflation, and the CPI deflated wage.

Figure 1: UK CPI (blue), HICP (tan), on log scale. Source: ONS, MEI, Eurostat via FRED. Light green shading denotes 2015M01-2015M12.

Both CPI and HICP are higher in 2015M12 than in 2014M12. One can see this same information conveyed in a different from by looking at the year-on-year values of inflation for 2015M12.

Figure 2: Year-on-year UK CPI inflation (blue), HICP inflation (tan). Source: ONS, MEI, Eurostat via FRED. Light green shading denotes 2015M01-2015M12. 

Year-on-year inflation in 2015 was 0.5% (using the CPI), and 0.2% (using the HICP).

So, y/y

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

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