Home > Inflation, UK GDP > Deflating Deflators

Deflating Deflators

If there is significant news in the Q4 GDP figures I’d go with the downward revision to the GDP deflators; positive supply-side news since the deflators were not looking great before.

I enjoy looking at the historical data; the annual GDP deflator for 2012 at 1.3% is the fifth lowest on record (after 1954, 1959, 2000 and 2009).  Will the hawks celebrate this impressive result?

In the picture of tight money below, fiscal fiddling with the VAT rate shows up as the large divergence between the GDP (market price) and GVA (basic price) deflators between late 2008 and 2012.

UK GDP and GVA Deflator

UK GDP and GVA Deflator. Source: ONS Series YBGB , CGBV

 

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Categories: Inflation, UK GDP
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