Much has been made of the impact that Statistics SA's error in calculating inflation data has had on the economy. Inflation is a key determinant of a wide range of economic decisions - wages, rental agreements, household budgets and long-term service contracts are all negotiated on the basis of what prices are expected to do.

The Reserve Bank uses the future course of CPIX (headline inflation excluding mortgage interest rates) as the basis for its interest rate decisions. The government's debt payments for inflation-linked bonds are settled according to the prevailing inflation rate.

The real effective exchange rate of the rand, which is used to assess competitiveness and economic performance relative to other countries, also depends on the data.

And then there is the impact on the markets. Investors are in the business of real, not nominal, returns. They take the effect of inflation into account when working out whether the dividends, interest or capital profit they will receive will make an investment worthwhile.

So the problems caused by the mess at Stats SA will ripple through the economy and have number crunchers from business, labour, the government and the investment community hard at work assessing its impact.

However, there are a few fallacies that have arisen since the mistake was brought to light. One of these is that, because inflation was lower than the official data indicated, there were more interest rate increases last year than were needed.

It can be argued that monetary policy is too tight and that the Reserve Bank went too far with its fourth 1 percentage-point rate hike last year.

But this criticism has nothing to do with the underlying data and everything to do with the theory that inflation would have turned even without the fourth hike.

Remember, the bank uses interest rates to change buying behaviour. Raising interest rates makes money more expensive. Demand is crimped and retailers can't pass on price increases as easily as they could if money were cheaper.

So wherever the bank started from, it would have raised interest rates as many times as it deemed necessary to stop inflation rising.

Without having access to the central bank models or the monetary policy committee meetings, we cannot determine whether starting from a lower inflation base would have meant that fewer increases would have been sufficient.

However, the fact that we are nearer the inflation target than previously thought does mean the bank has scope to cut rates by more (and faster) than previously thought.

Let's hope it takes the opportunity to do its bit to promote economic growth and job creation, and cuts rates as aggressively as prudence allows. QW

SABMiller

This brewer's chief executive, Graham Mackay, is certainly not shy of challenges or confrontation.

At last week's presentation, during which he outlined ambitious plans to turn US beer giant Miller, he also gave notice of the group's intention to take the South African government to court if the proposed liquor bill was passed into law.

It seemed Mackay was on a roll - nothing was going to stop him from making this once little ol' South African beer monopoly into an even more powerful global player.

Whatever happens with the liquor bill - which will take politically sensitive bargaining rather than the aggressive action needed in the US - SABMiller management certainly has its hands full. It's giving itself two to three years to turn Miller to account and appears to have absolutely no illusions as to the difficulty it faces.

For the nine months that the US unit has been part of the group, it has continued to suffer a decline in sales and market share.

Miller's problem is apparently not one of awareness in the marketplace. It seems beer drinkers are aware of Miller; they just don't consume it.

Management's challenge will be to convert awareness into consumption.

And while this will be a huge challenge, it seems the head office will still be "remaining alert to value-adding opportunities", which presumably means yet more acquisitions.

From a South African perspective, it is rather cheering to listen to a South African talk aggressively and enthusiastically about plans to improve a badly managed US mammoth with the essential use of key managers who got their experience in this country.

So often the story is the other way around. AC

Gilbertson

Brian Gilbertson is well known for his tough negotiation skills. They must have been put to considerable use when he negotiated his payout package with former employer BHP Billiton.

How else do you explain that it took nearly five months of talks before BHP Billiton and Gilbertson final reached agreement on a $6.9 million golden handshake?

But now that we have the details of the payout cheque - which the Australian media say could reach as much as $32 million once pension liabilities are included - we wonder why BHP Billiton shareholders aren't demanding an explanation from the directors as to what exactly led to the termination of Gilbertson's contract.

Surely the directors owe such an explanation, especially given that Gilbertson's five-year plan for the group is intact, despite his departure.

If his firing truly was a case of a tall poppy syndrome, as some commentators have suggested, then BHP Billiton might want to reconsider the services of some of its other directors, starting with chairman Don Argus. MG