ad9898 Posted May 18, 2010 Share Posted May 18, 2010 Inflation up again, IR's seemingly fixed at 0.5% as any rise will collapse the economy (read housing market). Times are going to get interesting for the house of cards that has been built on the back of cheap and easy credit. Quote Link to comment Share on other sites More sharing options...
angrypirate Posted May 18, 2010 Share Posted May 18, 2010 Inflation up again, IR's seemingly fixed at 0.5% as any rise will collapse the economy (read housing market). Times are going to get interesting for the house of cards that has been built on the back of cheap and easy credit. Now that the election has been and the Nokia yielding pyscho known as Brown has left number 10, the ONS are no longer scared to publish the true figures. I think no one here is surprised that inflation is that high. But the real question is whether or not the BoE have the balls to put interest rates up. It wouldnt surprise me if now they are pushed upwards. The pressure is certainly there to Quote Link to comment Share on other sites More sharing options...
Tonkers Posted May 18, 2010 Share Posted May 18, 2010 Is there a force point, where interest rates have to go up? Quote Link to comment Share on other sites More sharing options...
getdoon_weebobby Posted May 18, 2010 Share Posted May 18, 2010 UNEXPECTEDLY HIGH (apart from to everyone on here) King will argue its part of a blip , when this proves to be a lie the markets will be looking for much higgher rates to buy govt debt Quote Link to comment Share on other sites More sharing options...
Guest_FaFa!_* Posted May 18, 2010 Share Posted May 18, 2010 (edited) They are all up - core, year on year and month on month, and all over forecast. Is still just a blip? http://www.dailyfx.com/calendar/ How many months consecutively is it now? Edited May 18, 2010 by Baby Eating Boomer Quote Link to comment Share on other sites More sharing options...
neil324 Posted May 18, 2010 Share Posted May 18, 2010 When's the vat rise planned to start, as soon as its announced or next year. This will blow the BOE expectations of it starting to fall back. Be interesting to see if Tories take a different view on it now in power, but doubt it very much. Quote Link to comment Share on other sites More sharing options...
tatty Posted May 18, 2010 Share Posted May 18, 2010 If RPI continues to rise at the same rate where will it be at the end of the year? June 6.4 July 7.6 Aug 9 Sep 10.8 Oct 12.9 etc, etc Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted May 18, 2010 Share Posted May 18, 2010 What's got 4 eyes but blind, is full of shit and attached to the end of a papermate? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted May 18, 2010 Share Posted May 18, 2010 (edited) RPI 5%...that means i'm getting 6%+ on a bit chunk of my savings....tax free. If only the government can avoid collapse us savers will be doing well. P.S.....That''s on NS&I index linked savings certificates Edited May 18, 2010 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
ad9898 Posted May 18, 2010 Author Share Posted May 18, 2010 The vice is starting to close, in my opinion we are nearing the peak of the 'return to normal' part of the bubble graph, especially seeing the ridiculous headlines we see today in the Express. Imagine the impact of historically 'average' IR's of say 6-7%. When the house built on sand starts to collapse there is going to be utter carnage. Imagine being on the average wage, paying £1000 per month mortgage on a skanky 1 bed flat in an area where the average rat wouldn't want to live. The only question is, how fast is the vice going to close ? Quote Link to comment Share on other sites More sharing options...
angrypirate Posted May 18, 2010 Share Posted May 18, 2010 What's got 4 eyes but blind, is full of shit and attached to the end of a papermate? I know, I know, I know Penfold? Quote Link to comment Share on other sites More sharing options...
TheEmperorHasNoClothes Posted May 18, 2010 Share Posted May 18, 2010 RPI 5%...that means i'm getting 6%+ on a bit chunk of my savings....tax free. If only the government can avoid collapse us savers will be doing well. P.S.....That''s on NS&I index linked savings certificates Also means you can get a mortgage with a real (inflation-adjusted) interest rate of -2% Quote Link to comment Share on other sites More sharing options...
ad9898 Posted May 18, 2010 Author Share Posted May 18, 2010 Just to be clear, I made a mistake on the RPI figure in the title, I forgot to put the '3' in after the point. It's actually 5.3% Quote Link to comment Share on other sites More sharing options...
Pent Up Posted May 18, 2010 Share Posted May 18, 2010 surely they have to rise now? It's starting to get out of hand and we still have not had the tax rises. Is the spare capacity they keep banging on about actually there? After all the jib cuts businesses cut backs etc surely they spare capacity is severly restricted. I've seen several forecasts of a June rise recently this should add a bit more weight to those predictions. Quote Link to comment Share on other sites More sharing options...
nickincash Posted May 18, 2010 Share Posted May 18, 2010 Jeeez - this is getting serious. RPI up by 0.95% in one month - equivalent to an annual increase of 12%. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted May 18, 2010 Share Posted May 18, 2010 Just to be clear, I made a mistake on the RPI figure in the title, I forgot to put the '3' in after the point. It's actually 5.3% Excellent...6.3%+ interest, tax free, on that part of my savings, APR equivant, about 10% ( before tax ). If only my other savings were doing so well... What happens to NS&I index linked savings certs if/when the government go bankrupt ? Quote Link to comment Share on other sites More sharing options...
Toto deVeer Posted May 18, 2010 Share Posted May 18, 2010 Is there a force point, where interest rates have to go up? Unfortunately the most important factor is US Fed policy. The UK property market benefits more from low Fed rates than the US does. If the UK rates rise, then Sterling will become uncompetitive against the Dollar, Euro and the Yuan. However, I think that this is an important signal that rates could start rising in the near future... Quote Link to comment Share on other sites More sharing options...
righttoleech Posted May 18, 2010 Share Posted May 18, 2010 This is STAGFLATION. Thanks Brown. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted May 18, 2010 Share Posted May 18, 2010 Rates will now have to rise. Since the RPI figure is one used for pay negotiations, any attempt at imposing public sector pay cuts will rejected out of hand if it looks like inflation is still rising. With these figures a 5% pay cut is effectively a 10% cut. My prediction - a 0.25% rate rise at the next meeting - for appearances mainly. Quote Link to comment Share on other sites More sharing options...
lurker07 Posted May 18, 2010 Share Posted May 18, 2010 I'm sure it's all within the range of the "fan-charts". It's likely that nasty volcano pushing up transport costs of food etc. Just a blip. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted May 18, 2010 Share Posted May 18, 2010 Rates will now have to rise. Since the RPI figure is one used for pay negotiations, any attempt at imposing public sector pay cuts will rejected out of hand if it looks like inflation is still rising. With these figures a 5% pay cut is effectively a 10% cut. My prediction - a 0.25% rate rise at the next meeting - for appearances mainly. Forgot to mention, RPI at >5% also makes it less acceptable to implement a VAT increase as that will cause the figures to rise as well. Quote Link to comment Share on other sites More sharing options...
Toto deVeer Posted May 18, 2010 Share Posted May 18, 2010 This is STAGFLATION. Thanks Brown. Yup. That's the immediate situation. Gotta push those rates up to stop it. Question is when? Quote Link to comment Share on other sites More sharing options...
Gigantic Purple Slug Posted May 18, 2010 Share Posted May 18, 2010 Interesting what these figures may mean for the prospect of further QE. With inflation increasing rapidly. We're going to burn off those debts and the savers are going to pay for it. Someone please make the case for deflation and cheer me up. I want to believe. Quote Link to comment Share on other sites More sharing options...
Charlie Don't Surf Posted May 18, 2010 Share Posted May 18, 2010 Yet another 'surprise' on the upside. I'd be worried if Merv et al hadn't told is it was going to be back to 2% by 2012! Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted May 18, 2010 Share Posted May 18, 2010 If the UK rates rise, then Sterling will become uncompetitive against the Dollar, Euro and the Yuan. Uncompetitive? Sterlng has collapsed and the much vaunted exchange rate improvement in exports has not happened, the trade deficit is as big as it ever was. Manufacturing workers tied to 180K per house housing are going to manufacture jack shit in this world. Quote Link to comment Share on other sites More sharing options...
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