They have got the inflation gauges all messed up

Everyone knows that central banks (and some economists/commentators) have got their inflation gauges all back to front. We all know prices have risen on most goods and services

Still they keep saying this:

From Bloomberg:

Economists said idle factories will help control inflation should raw-material costs keep rising.

“Inflation is very much contained,” said Alex Li, an interest-rate strategist in New York at Credit Suisse Securities USA LLC, another of the primary dealers. “Industrial production is a little lower than expected, so that tells you that growth is still not strong. Inflation is under control.”

Industrial production might be dead in the water, but prices are still moving upward on pretty much anything related to all types of services/food/oil/insurance/mortgages and so on. So you gotta pay your staff more (to cover overhead costs) and therefor you'll increase prices on your services. All this when your production output has almost grind to a complete halt.

For example a friend of mine decided to use Virgin mobile service after they offered a cheaper deal on their mobile plans. Still in our apparent 'deflationary' environment Virgin are increasing their late fee from $5.00 to $10.00!

And remember Virgin's mobile $4.4m loss 2008?