“Come on Alphaville, you may’t use Taylor Swift to excuse but another piece about UK inflation—”
We’ll get new UK CPI inflation figures on Wednesday, which comply with a drop to 2 per cent — bang on the Financial institution of England goal — in Might. As issues stand, we haven’t bought that many predictions into our inbox, so we’re not right here for extra sellside horse-race economics journalism.
As an alternative, we’re simply going to take a look at Deutsche Financial institution.
For causes many readers will instinctively intuit, senior economist Sanjay Raja’s preview word on the upcoming print, printed on Wednesday, set eyes a-twitching at FTAV towers:
We have now at these stage written about Taylor Swift rather a lot. On a purely anecdotal foundation, we predict the pop star’s near-omnipresence in financial protection has lastly waned (although too late for some newspapers).
Raja — who expects inflation to carry at 2 per cent year-on-year — writes:
One factor to regulate within the June report will likely be recreation and tradition costs. Cultural companies, specifically, we predict may very well be robust, given the Taylor Swift UK tour. And given how live performance costs are collected, it’ll doubtless fall throughout the ONS’ value assortment basket. We anticipate reside music costs due to this fact to rise by round 10% – constructing on the 5.7% enhance registered in Might. General, we anticipate leisure and cultural companies inflation to push up by round 1.2% m-o-m (CPI).
Readers might recall we already wrote about the “pop superstar drives inflation” thing last year, within the context of Beyoncé’s Renaissance tour.
As famous again then, the Workplace for Nationwide Statistics was not prepared to easily affirm or deny Queen Bey’s presence in its inflation figures — that’s as a result of the stats physique doesn’t need to give away precisely the place and when it observes pricing knowledge, and which merchandise it appears to be like at. We speculated that Beyoncé most likely wasn’t within the knowledge, however we might by no means know.
Listed below are additional pertinent factors, bulleted as a result of we by no means discovered find out how to write higher:
— Costs for occasion tickets are imputed into CPI for the month when the occasion happens, quite than when the ticket is purchased.
— We don’t know, however we are able to speculate with some confidence, that the ONS prefers to observe venues that host the identical sort of occasions each month (in order that they yield comparable knowledge).
— We do know, nevertheless, that on an merchandise stage the ONS inflation data is kinda weird.
— We additionally know that the ONS’s brokers make most of its value readings “on or round” a non-fixed day every month.
We reached out to Raja, who kindly responded to our inane questions. He instructed us:
The ONS has not fairly instructed us what they’re taking a look at particularly. However not like different gadgets within the companies basket, reside music occasions don’t appear to be contained to the so-called index assortment date — which on this case we assume will likely be per week earlier on the eleventh of June.
…So, in a roundabout way, sure, it does appear like the impact of the Eras tour will likely be captured within the value assortment knowledge. Nonetheless (and fortunately for the BoE) it’ll solely be on the main market (and never the secondary or resale market).
Raja reckons, based mostly on his group’s conversations with the ONS, that the statisticians are much less fussed concerning the exact timing of occasions than they’re within the assortment of different costs. He instructed Alphaville:
[If] how we’ve interpreted the ONS’ steerage on reside music occasions [is right], you’d nonetheless see a strongish impact for that a part of the basket. It’s small, to make certain. However it will be one thing akin to what we noticed final 12 months when Beyoncé rolled into city!
It’s not what we have been led to consider after we spoke to the ONS about this final 12 months — and, in our view, an enormous a part of the difficulty right here is their refusal to supply clear steerage on these items. We are able to see the logic although.
If date does matter, then it’s price interrogating.
The eleventh determine, Raja says, was based mostly on a median of June assortment dates for inflation knowledge over the previous decade.
Let’s unpick that — listed here are the index assortment dates for Junes since 2013, and all different months since 2022:
As a median since 2013, June readings have been on the thirteenth, whereas the 14th is the post-2022 common of all months.
The necessary further issue: assortment often happens on a Tuesday. So, in June 2024, that makes the eleventh or (much less doubtless) the 18th the doubtless dates:
Naturally, the following factor to test is when Taylor got here to city. Listed below are her gig dates in contrast with the Tuesdays:
What can we be taught from this? Some observations:
Commentary 1: That is all unhelpful
If the ONS did collect knowledge “on or round” the eleventh, it will have landed within the hole between Swift’s Edinburgh and Liverpool gigs — which might imply that Swiftflation is unlikely to indicate up in meals or lodging prices. And, in the event that they did goal the gathering date for ticket costs, it will imply Swift received’t have an effect there both.
Nonetheless, if knowledge was collected on the 18th (which might be the newest in a decade), it’s a direct hit, you-sunk-my-battleship sort state of affairs with Swift’s look at Cardiff’s principality stadium, on the 18th.
Commentary 2: We don’t have sufficient data anyway
Only a date match isn’t ample, in fact. We might additionally must know that the venues the place Swift appeared — Edinburgh’s BT Murrayfield, Liverpool’s Anfield, the Principality and London Wembley — are amongst these the ONS’s brokers monitor. And we’ve no approach of confirming that.
Can we speculate? Eh, certain. We talked about in our Beyoncé protection that the Renaissance venue the place she carried out across the assortment date — Sunderland’s Stadium of Mild — didn’t seem to be a great candidate for ONS value gathering, as a result of it doesn’t often host comparable (ie musical) occasions.
Now, assuming date is related, and that the 18th was chosen, the state of affairs could also be totally different with Swift — the Principality seems to host all kinds of occasions all 12 months lengthy.
Sadly, as a service, tickets aren’t one of many gadgets for which the ONS releases detailed pricing tables, so we are able to’t do something like evaluate costs for tickets offered in Wales to main market Principality tickets. So, onto our ultimate remark:
Commentary 3: Bleurgh
If there’s a large bump in Recreation and Tradition inflation, we’ve little question it is going to be attributed partially to Swift. We may have no approach of understanding, nevertheless, whether or not it was her, versus all variety of different issues it might have been. Which is a roundabout approach of claiming we’ve written a thousand extra phrases about UK inflation and we’re nonetheless no nearer to being comfortable. Onward!
Additional studying:
— Beyoncé, statistical nightmare
— A very deep dive into UK inflation predictions. Like, maybe too deep
— Turns out cheapflation was a thing after all
— Why is it so hard to work out how much money Taylor Swift is making?