RPICPI User Group

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2017 Inflation Rate for Christmas trees

  • 1.  2017 Inflation Rate for Christmas trees

    Posted 22-11-2018 16:52

    "It's coming on Christmas /They're cutting down trees  / They're putting up reindeer / And singing songs of joy and peace." Indeed, it is, and they are, so I apologize for bringing up the inflation rate for UK Christmas tree prices in 2017 at this late time. Francesca Bryden of the UK Department for Environment, Food and Rural Affairs kindly provided me a January 2018 update for the output Agricultural Price Index for Christmas trees, which relates to the 2017 season. It indicates a 4.8% inflation rate for producer prices in 2017 as compared to no change in 2015 and 2016. This would seem to be broadly consistent with the limited market intelligence I reported in my February 2018 library document "2017 Update of a Proxy Index for Christmas Trees Based on the French IPPAP", which suggested a surge in prices in 2017 following on a more stable market in previous years. By contrast. the French proxy index shows  inflation rates of -5.8% for 2015, 23.0% for 2016 and 1.6% for 2017, which is hard to believe. While the French index itself is excellent the exchange rate adjustment has been more important in determining the movement of the series every year from 2014 forward and in many previous years. Although I will probably continue to update this series for my own amusement, I no longer believe it could be used as a proxy for a consumer price series for Christmas trees barring fundamental changes in economic relationships (a sterling peg to the  euro, much greater market penetration by French producers) that are unlikely to happen, certainly in the forseeable future.

    The use of the output API for Christmas trees would, on the other hand, be feasible, in spite of its lack of timeliness as compared to the French IPPAP, if the UK consumer price series were reformulated along the lines of the Swedish CPI or the US chained CPI, requiring a revision period of about two years. This reformulation is, in the long term, probably inevitable.

    My February 2018 document was somewhat garbled. I apologize for that and have replaced it with an edited version that makes no attempt to make my views then appear any wiser than they were then.  I will probably have more to say on this subject in April.