Column 8 · The Rub
Inflation fell. Your shop still hurts. Both can be true.
The Consumer Price Index is a very polite average. It does not do your shopping, and it does not pay your rent. It weights a basket so that the country can have one number to wave at the Reserve Bank. That is a useful job. It is not a household ledger.
When that number falls, television treats it as a refund. It is not. It means prices are rising more slowly than they were, from a higher floor, in a basket that is not your basket. Rent and insurance may still be having an evening of their own.
The viral chart says inflation is beaten. The household asks why Tuesday costs more than Tuesday last year. The answer, I am afraid, is that a rate of change and a level are different animals, and we keep introducing them as twins.
Which, if we are being precise, is the rub.