Friday, December 15, 2006

Adjust for Inflation! Grr!

Happy happy days as the FTSE 100 rises to its highest since February 2001.

Britain's top share index extended early gains to hit its highest intraday level since February 2001 on Friday, tracking global equity markets higher and boosted by oils, banks and defense firm BAE Systems (BA.L: QuoteProfile , Research).

By 1018 GMT, the FTSE 100 .FTSE was 29.3 points, or 0.5 percent, higher at 6,257.3 points, having earlier hit 6,258.8 to beat a previous 5-1/2 year high reached on November 16.

However, this isn't actually quite true. You see, they haven't adjusted for inflation. We've had not too much of that, a percent or two a year, but it still means that (without compounding) it would need to be 5-10% higher in nominal terms to be the same in real terms.


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