Inflation, deflation and the problems of data
- The US is off visiting the shopping mall, which casts something of a dampening effect over the financial markets.
- The UK Office of National Statistics will have another go at estimating how fast the UK economy grew in the third quarter. The problem is this is more an aspiration than a precise data point, and it will be revised again.
- Japanese consumer price inflation was once again somewhat softer than expected. The Bank of Japan's quantitative policy seems to have had little effect. No doubt this will lead to speculation that the Bank of Japan will therefore undertake more quantitative policy.
- Spanish consumer price inflation is expected to show deflation again, although this will not last long as oil base effects mitigate (however, oil base effects will not raise nominal GDP, and thus will not help with debt ratios, as Spain does not produce oil).