Thoughts on Finance, Current Affairs and General Consumer Ripoffs - Damn Lies and Statistics

There are now a range of inflation measures available in the UK, almost seeming to be one available for whatever you want to measure or whatever answer you want to be given. RPI, CPI, RPI-X, CPI-X - what do these inflation figures measure and how do they differ from each other?

The Financial Services Authority has released a press statement about the quality of investment advice given by UK High Street banks. It  has been reported that the FSA claims that Banks are not giving adequate investment advice. However if you actually read the details of the research it appears that the opposite is true. 75% of the mystery shoppers were given good advice and only 25% were given advice rated as not adequate but out of that only 11% received advice described as bad. So 90% of customers were not receiving bad advice - surely that is a good situation and a relative success were 90% of customers advice was not bad can be reported as "Banks not giving good avice" which seems to be the opposite of the actual findings!

How does the UK Budget and Deficit Compare to an Household's Income and Spending? The numbers for the UK economy and budget deficit are huge but do we really understand what a billion pounds is? How does a £10 billion compare to anything else? Maybe equating the numbers to a household budget would make them more understandable. The 2012 UK Government Budget UK Income (Taxes)  Total:  £589 billion  UK Spending Total :            £710 billion (2011 = £691bn, 2010=£669bn) Outstanding Debt:                £1040 billion Key number Spending minus income is £99 billion - so we are spending £99 billion more than we get in Lets try that with more manageable numbers that are more comparable to a family income: If the UK Government was a family their income and spending would be: Income £30,000 Spending £36,000 So this year the government "family" would be running up an overdraft or credi...

The IMF have recently said that austerity in Britain was too much and that cuts should be reduced to promote growth. This is the same IMF that have imposed budget cuts on Greece that have led to a recession and contraction of over 25% of GDP in the last 5 years with a current year drop of 7%. Yet the UK is around the 0% growth mark with budget deficit of over £100 billion and debt growing past the £1000 billion level. How can UK austerity be considered too harsh by the IMF in those circumstances when Greece is inflicted with far worse cuts by the IMF themselves. http://www.keeptalkinggreece.com/2011/10/05/greek-statistics-revised-recession-deeper-than-estimated/

Latest press release from Department of Health announcing the spectacular sum of £25 Million being invested into hospital Maternity services. However the press release also says that this sum is being split between "more than 100" hospitals. So the sum per hospital is an average of under £250,000. In terms of medical equipment this is a drop in the ocean and hardly worthy of a dramatic press release getting headlines on news bulletins. Watch out for these statistical tricks - bundle up a small amount of money across a lot of destinations and it will then sound like a lot of money that can be a press release.   £250,000 = not a lot of publicity when it is one hospital   £25 million = same sum but split over 100 hospitals and is now headline news!

Tesco stores have reported their crucial sales for the Christmas 2012 period showing that on the key like-for-like measure their sales increased by 2%. However that isn't the full picture as like-for-like sales compare sales this year against last year in shops open at the time.  Christmas 2011 was notoriously bad for tesco and sparked the profit warning that led to a dramatic drop in their share price. Comparing a very low sales number in 2011 with a better number for 2012:was always going to flatter this years results so although tesco may have done well it probably isn't as good as they claimed.

In another blatant error in their use of statistics The Guardian have today claimed that First Time Buyers are putting down an average deposit of 80% which is out of reach of most FTBs!! You can certainly agree that an 80% deposit would be out of reach of virtually all buyers, whether first time or not! First Time Buyers Lending LTV Errors in The Guardian There seem to be a huge number of numeracy errors in Guardian stories these days, maybe resurrecting their reputation for typos that was generated in the 1980s and has largely been removed as a result of autocorrect and spellcheckers. Checking the validity of statistics is somewhat harder and can only be done by a human that understands the interpretation of the data, something journalists clearly do not. For the record the article should have stated that the average Loan to Value (LTV) was 80%, meaning that the average First Time Buyer was putting down a 20% deposit.