Why would products designed in the US and manufactured in Taiwan only ever be affected by the UK average inflation rate?
Basic economics my friend, you obviously have no understanding of.
UK average inflation is a product of an average over a long period of time as well as on a yearly basis by a "basket" of goods which is again averaged.
You are taking a 10 or 20 year average of over 700 goods and services and comparing it to a single product type over a specific short term. Thats the bit that makes no sense.
As I've already shown, you can take any single product that makes up CPI and it itself won't follow the "rules" you seem to think CPI suggests.
No business in the world looks at CPI and says "well our cost to sell that product has gone up by 20% in country X, but their CPI is only 3% so we have to sell at a loss". Inflation doesnt work like that. UK CPI is an average of many products, product prices changing affects CPI but CPI does not affect product prices - exchange rate and supply/demand does, CPI has absolutely no effect on product prices.
I'm happy to say I have a basic understanding of market economics. And yes, prices falling is also due to deflationary pressures, the same as prices going up is due to inflationary pressures. Not all products are affected by the same circumstances so you have both inflation and deflation affecting disparate products - it then gets averaged in to UK CPI, but UK CPI is one very specific measurement, it isn't the be all and end all of "inflation".
There are times where UK CPI has been 30%, or -5%, but it doesn't mean ALL products followed that same pattern.
The whole point was that you can't look at a product that's increased by 100%, and a product that's increased by 3%, and just say "Prices of both products rose by an expected amount predicted by the average rate of inflation."
You also can't say that all price rises are due to inflationary pressures, either.
As we well know, companies can choose to increase prices purely because they think the market will bear the new prices, and thus they are able to generate more profit, whilst their costs might remain the same over that period.
In that case you can't simply look at the price rise and say, "Ah yes, that's due to inflation, or inflationary pressure."
Because if you
do say that, you turn "inflation" into a catch-all (meaningless) term for
any price rise. Which I do not believe is what most people are thinking of when they refer to inflation.
P.S. If you look at some of my earlier posts in this thread, I said (e.g.) "GPU prices are inflated to all hell and back". Which obviously meant inflation above and beyond the average rate of inflation. In other words, above and beyond the rate of increase that we all generally accept happens year on year for most products. Something that we begrudgingly accept as a fact of life.
When people say, "Prices are different to ten years ago due to inflation", they are generally referring to this concept that everything becomes slightly more expensive year on year.
When prices jump 50% - 100% in a short period of time (weeks or months let's say), people
generally don't say, "Prices are more expensive now [than three months ago] because of inflation." Normally when you get such drastic and sudden increases the term "inflation" isn't used, but rather people look to specific factors driving the price increases.
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