Monday, 8 February 2010

Harpex off the bottom

In the first significant upward movement since 2008, the Harpex looks like it's no longer bumping along the bottom; there's a long way to go, though, before we even get back to the volumes of October 2009. If the UK's recovery is led by consumer expenditure rather than employment, as seems might be the case, and the housing market is bubbling away (more moves mean more new household goods, furniture and paint), this is going to put pressure on the CPI. What's the betting that rather than raise interest rates, increasing the consumption tax (VAT) to dampen demand will be the favoured policy measure of both parties?

The February / March retail figures should give us a good clue.

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