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The PM should start with the BBC when it comes to improving maths standards
I was pleased on Wednesday morning to see that UK inflation had fallen slightly in December. My pleasure, however, lasted only as long as it took me to read the BBC's take on the announcement. "Price rises slowed for a second month in a row but the cost of living remains close to a 40-year high", read the sub headline.
Why was I unhappy? Because the BBC got it wrong. Again. It is not the cost of living that remains close to a 40-year high but the rate of change in the cost of living. The cost of living aka the consumer price index is always close to its all time high because prices rarely fall (chart 1, note: I have used the retail price index because of data availability but it makes no difference). On the other hand, the rate of change in the cost of living aka the rate of change in the consumer price index aka consumer price inflation has mostly been low single digits the last 40 years but is currently 10.5% which is close to a 40-year high (chart 2).
Chart 1: consumer/retail prices have almost always risen so are by definition always close to 40 year/all time highs
Chart 2: Inflation on the other hand is indeed "close to a 40-year high"
The BBC conflated the price index with the rate of change of the price index, which may sound like a small thing but is basic maths (this is particularly ironic given Rishi Sunak's recent announcement about mandatory study of the subject to 18 years of age - perhaps he should start with the BBC).
An equivalent would be conflating distance with speed. Imagine reading an article that stated that the distance between London and Brighton was 50 miles per hour. Frankly, you'd think the journalist was an idiot.
And, yes, it's a small thing, and, yes, I'm a pedant, but my view has for as long as I can remember been that small things matter. Why? Because lots of small things add up to big things.
It is also particularly important that the BBC gets these things right because it is the most widely read news site in this country and thus hugely influential. In this piece (https://www.chimpinvestor.com/post/naughty-auntie) I wrote about how it was possible that the BBC's misleading reporting of wage increases may have wrongly further encouraged public sector workers to strike.
Having said all this, I was pleased that later in the day the BBC changed the wording of the sub headline in the article, correcting its error (figures 1 and 2). However, given the very short shelf life of online articles, I expect the damage, however small, had already been done.
Figure 1: The original sub headline
Figure 2: The corrected sub headline ("cost of living" changed to "inflation")
The views expressed in this communication are those of Peter Elston at the time of writing and are subject to change without notice. They do not constitute investment advice and whilst all reasonable efforts have been used to ensure the accuracy of the information contained in this communication, the reliability, completeness or accuracy of the content cannot be guaranteed. This communication provides information for professional use only and should not be relied upon by retail investors as the sole basis for investment.
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