Inadequate Inflation

Headline inflation as measured by the CPI is 1.94%, and, after falling for some months, is again rising, partly on the back of rising rent inflation. The core rate, which excludes food and energy, and is a better measure of underlying inflation, is 1.68% and still falling. Why? Cheaper cell phone plans, a continuing decline in new car prices, and medical care inflation at its lowest level in 50 years.