“Come on Alphaville, you can’t use Taylor Swift to excuse yet 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 obtained 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 take a look at Deutsche Financial institution.
For causes many readers will instinctively intuit, senior economist Sanjay Raja’s preview notice on the upcoming print, revealed 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 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 keep watch over within the June report will likely be recreation and tradition costs. Cultural providers, particularly, we expect 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 count on reside music costs subsequently to rise by round 10% – constructing on the 5.7% enhance registered in Might. Total, 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 superstar drives inflation” factor final yr, 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 at. We speculated that Beyoncé in all probability 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 realized the right way to write higher:
— Costs for occasion tickets are imputed into CPI for the month when the occasion happens, fairly 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 kind of occasions each month (in order that they yield comparable knowledge).
— We do know, nonetheless, 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 around” a non-fixed day every month.
We reached out to Raja, who kindly responded to our inane questions. He advised us:
The ONS has not fairly advised 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 will likely be every week earlier on the eleventh of June.
…So, indirectly, sure, it does appear to be the impact of the Eras tour will likely be captured within the value assortment knowledge. Nevertheless (and fortunately for the BoE) it’ll solely be on the major 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 in regards to the exact timing of occasions than they’re within the assortment of different costs. He advised 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 sure. However it will be one thing akin to what we noticed final yr when Beyoncé rolled into city!
It’s not what we had been led to imagine once we spoke to the ONS about this final yr — and, in our view, an enormous a part of the problem right here is their refusal to supply clear steerage on these items. We will 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 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 vital extra 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 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:
Commentary 1: That is all unhelpful
If the ONS did collect knowledge “on or around” 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.
Nevertheless, 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 kind state of affairs with Swift’s look at Cardiff’s principality stadium, on the 18th.
Commentary 2: We don’t have sufficient info anyway
Only a date match isn’t adequate, in fact. We’d additionally have to 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 method 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 Gentle — didn’t look like a really perfect 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 yr 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 examine costs for tickets bought in Wales to major market Principality tickets. So, onto our remaining commentary:
Commentary 3: Bleurgh
If there’s a massive bump in Recreation and Tradition inflation, we’ve little question it is going to be attributed partially to Swift. We can have no method of realizing, nonetheless, whether or not it was her, versus all variety of different issues it might 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 spite of everything
— Why is it so exhausting to work out how a lot cash Taylor Swift is making?
