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BRIAN WATT: A senior central banker from Britain has attacked the way the Federal Reserve here in the US measures inflation. He says it's a mistake to strip energy costs out of the inflation figures. From London, Stephen Beard reports.
STEPHEN BEARD: Charlie Bean is the Chief Economist at the Bank of England.
Speaking at the Federal Reserve's annual gathering in Wyoming this past weekend, Bean has been rather critical of the Fed's measure of core inflation.
This excludes energy and food prices on the grounds that they are volatile, but Bean says this measure gives a one sided picture of inflation. It reflects the falling price of consumer goods but not higher energy prices when both are caused by the same thing: the rise of China and other emerging economies.
Andrew Hilton of the Centre for the Study of Financial Innovation:
ANDREW HILTON: Core inflation is a very artificial concept. It makes no sense. Charlie Bean is right to flag this as an issue.
He says the Fed should focus instead on headline inflation -currently running at 4.1%, less flattering than the 2.7% Core Inflation rate.
In London, this is Stephen Beard for Marketplace.