“Come on Alphaville, you’ll be able to’t use Taylor Swift to excuse but one other piece about UK inflation—”
We’ll get new UK CPI inflation figures on Wednesday, which observe a drop to 2 per cent — bang on the Financial institution of England goal — in Could. As issues stand, we haven’t acquired that many predictions into our inbox, so we’re not right here for extra sellside horse-race economics journalism.
As a substitute, we’re simply going to have a look at Deutsche Financial institution.
For causes many readers will instinctively intuit, senior economist Sanjay Raja’s preview word on the upcoming print, revealed on Wednesday, set eyes a-twitching at FTAV towers:
We now have at these stage written about Taylor Swift quite a bit. On a purely anecdotal foundation, we expect 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 can be recreation and tradition costs. Cultural providers, particularly, we expect might be sturdy, given the Taylor Swift UK tour. And given how live performance costs are collected, it is going to possible fall inside the ONS’ value assortment basket. We count on reside music costs due to this fact to rise by round 10% – constructing on the 5.7% enhance registered in Could. General, we count on leisure and cultural providers inflation to push up by round 1.2% m-o-m (CPI).
Readers might recall we already wrote in regards to the “pop celebrity drives inflation” factor final 12 months, within the context of Beyoncé’s Renaissance tour.
As famous again then, the Workplace for Nationwide Statistics was not keen to easily verify 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 learn 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 will speculate with some confidence, that the ONS prefers to watch 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 degree the ONS inflation knowledge is kinda bizarre.
— 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 informed us:
The ONS has not fairly informed us what they’re particularly. However not like different objects within the providers basket, reside music occasions don’t appear to be contained to the so-called index assortment date — which on this case we assume can be every week earlier on the eleventh of June.
…So, not directly, sure, it does seem like the impact of the Eras tour can be captured within the value assortment knowledge. Nonetheless (and fortunately for the BoE) it is going to solely be on the main market (and never the secondary or resale market).
Raja reckons, primarily based on his staff’s conversations with the ONS, that the statisticians are much less fussed in regards to the exact timing of occasions than they’re within the assortment of different costs. He informed Alphaville:
[If] how now we have 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 sure. However it could be one thing akin to what we noticed final 12 months when Beyoncé rolled into city!
It’s not what we had 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 problem right here is their refusal to supply clear steerage on this stuff. We are able to see the logic although.
If date does matter, then it’s value interrogating.
The eleventh determine, Raja says, was primarily based on a median of June assortment dates for inflation knowledge over the previous decade.
Let’s unpick that — listed below 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 extra issue: assortment normally happens on a Tuesday. So, in June 2024, that makes the eleventh or (much less possible) the 18th the possible dates:
Naturally, the subsequent factor to verify is when Taylor got here to city. Listed below are her gig dates in contrast with the Tuesdays:
What can we study from this? Some observations:
Remark 1: That is all unhelpful
If the ONS did collect knowledge “on or round” the eleventh, it could have landed within the hole between Swift’s Edinburgh and Liverpool gigs — which might imply that Swiftflation is unlikely to point out up in meals or lodging prices. And, in the event that they did goal the gathering date for ticket costs, it could imply Swift received’t have an effect there both.
Nonetheless, if knowledge was collected on the 18th (which might be the most recent in a decade), it’s a direct hit, you-sunk-my-battleship sort scenario with Swift’s look at Cardiff’s principality stadium, on the 18th.
Remark 2: We don’t have sufficient info anyway
Only a date match isn’t ample, after all. We’d 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 now we have no method of confirming that.
Can we speculate? Eh, positive. 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 look like a great candidate for ONS value gathering, as a result of it doesn’t normally host comparable (ie musical) occasions.
Now, assuming date is related, and that the 18th was chosen, the scenario could also be completely 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 objects for which the ONS releases detailed pricing tables, so we will’t do something like evaluate costs for tickets bought in Wales to main market Principality tickets. So, onto our ultimate remark:
Remark 3: Bleurgh
If there’s a huge bump in Recreation and Tradition inflation, now we have little question it will likely be attributed partially to Swift. We could have no method of understanding, nevertheless, whether or not it was her, versus all variety of different issues it may have been. Which is a roundabout method of claiming we’ve written a thousand extra phrases about UK inflation and we’re nonetheless no nearer to being pleased. Onward!
Additional studying:
— Beyoncé, statistical nightmare
— A really deep dive into UK inflation predictions. Like, possibly too deep
— Seems cheapflation was a factor in any case
— Why is it so laborious to work out how a lot cash Taylor Swift is making?
