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House Price Crash Forum

Inflation Up To 3.7%, Rpi 5.3%


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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...

The fact that Sterling and short term Gilts haven't really reacted much to these numbers which ought to force short term interest rates higher tells us that the market expects a continued lack of monetary discipline from the BoE.

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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.

we need cash.

raising rates will raise cash...look at the AUS$ rates up, yet it soars.

course they need cash to keep their own housing bubble going.

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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 ?

I think that the hobby of collecting worthless bonds is called scripophily.

See http://www.numistoria.com/news.php

hth

p-o-p

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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.

Yeah, you're right.

Currencies outside the dollar world are devaluing in unison.

Short term the UK needs to make more of what it consumes, if possible, and consume less from others. Long term the UK needs to produce high value. Going to take some time to do this...

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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.

Penfold sez

The Bank predicts that the inflation spike will be short lived, as one-off effects are gradually outweighed by weak growth and high unemployment, which limit the ability of firms and workers to raise prices and wages.

http://www.telegraph.co.uk/finance/economics/7735583/UK-inflation-jumps-to-17-month-high.html

This is not totally unreasonable, as I also concur that high unemployment and wage freezes/cuts will slow inflation. However the rate of increase is of concern, so a move up on interest rates further squeezing the indebted would be welcome.

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Yep, that's the line the Beeb are going with: http://news.bbc.co.uk/1/hi/business/10121176.stm

Don't forget:

- the oil spill

- the troubles in Bangkok

- the upcoming World Cup

- the Lewis Hamilton crash some weeks ago

- weather too cold

- weather soon to be too hot

- not enough snow in the summer

- and many other things that are clearly pushing inflation up.

When house prices start properly crashing later this year, I'm sure the BBC will link it with all of the above.

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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.

Get yourself a 10year fixed mortgage. Your monthly repayments will be small change in a couple of years.

I'm sure the new government will try to use (hyper?)inflation to tackle the debt.

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http://www.telegraph.co.uk/finance/economics/7735583/UK-inflation-jumps-to-17-month-high.html

Britain's inflation rate jumped more than expected in April to hit a 17-month high, driven by big rises in tax on alcohol and tobacco, as well as women's clothing and food prices.

Thank god it's all down to tax increases.....

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Where are the letters or is Merv just sending a "Hope you are very happy in your new house" card?

p-o-p

Hes going to photocopy the letter the ex treasury secretary left.

sorry newbie..the money has gone...Merv.

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This just shows that the people banging on about deflation are just wrong. I'm glad I have taken the view for over three years that inflation was coming and stocked up on NS&I certificates to the max.

This inflation is now getting beyond a joke though. I think teh BOE are not far away from loosing control of inflation.

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Don't forget:

- the oil spill

- the troubles in Bangkok

- the upcoming World Cup

- the Lewis Hamilton crash some weeks ago

- weather too cold

- weather soon to be too hot

- not enough snow in the summer

- and many other things that are clearly pushing inflation up.

When house prices start properly crashing later this year, I'm sure the BBC will link it with all of the above.

What's the collective name for a group of Black Swans? A Sh!tstorm of Black Swans?

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Where are the letters or is Merv just sending a "Hope you are very happy in your new house" card?

p-o-p

Dear Chancellor,

External shocks, volcanic ash, global rise in fuel prices, VAT rise, all just a blip, no need to do anything about inflation at 5.3% at a time when nominal wages are virtually static.

Hugs and kisses,

Merv

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This just shows that the people banging on about deflation are just wrong. I'm glad I have taken the view for over three years that inflation was coming and stocked up on NS&I certificates to the max.

This inflation is now getting beyond a joke though. I think teh BOE are not far away from loosing control of inflation.

Might I take it that you didn't have much interest in these things in 1979 and 1980?

p-o-p

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This just shows that the people banging on about deflation are just wrong. I'm glad I have taken the view for over three years that inflation was coming and stocked up on NS&I certificates to the max.

This inflation is now getting beyond a joke though. I think teh BOE are not far away from loosing control of inflation.

the deflationists are not wrong...the printing taps are on so your money loses value.....the actual black hole is being hidden by a curtain of lies.

sadly, the debt moves to the next place of bail....and thats You and Me.

I accept, however, that the cause of price inflation is the action of government, not the natural cycle of money.

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And lets not forget, you lucky savers, that had you invested in a fund like Fidelity, you would be looking at 40% for the last year.

furthermore, your rate applies from today....the rises happened over the last year, so in a rising RPI, you are always behind.

Deflation would certainly be to your advantage as a cash holder....

however, you just remain happy with your apparent gains.

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