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Inflation Up To 3.7%, Rpi 5.3%


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Can't they just use RPI ????

Confused.

I think the idea is that CPI responds more quickly to events than RPI. If they were using RPI, an interest change could come later and therefore be less effective. The same response seems to come for the argument of using the broad money measurement too, despite it being a more accurate reflection on true inflation levels.

It could be argued that the system of having both broad and narrow money makes the whole process rather like fighting shadows either way though; the BoE would have far more control over price stability if the private banks couldn't extend credit. That is probably a discussion for another thread though.

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Exactly. And as for those in charge ? They all have wads of cash too, and so do their pals and their families. And I am sure they are just as selfish as everyone else. Of course they no doubt have land and other stuff - however they will have piles of £££ as well.

So whilst it is clear the Treasury, Government, BoE and whoever are devaluing the £. I honestly don't think they will just let it carry on until you are wiping your **** with a £10 note. Of course maybe they won't have a choice in the matter and it will happen anyway.

However, without coming out and saying it, I am sure they are just as wary of letting it all get out of control as well.

Anyway - least it's getting interesting around here again.

Looking for some advise really, In sold my property in 2007 (May) and have been renting in SW London ever since, In have an urge to get back on the property market and buy again, but am worried that if I do, house prices fall and i'm on to a loser. Also worried that if I don't get back on the ladder and by 2011 (end of) prices start to go stupid again, I'll be left behind. Where I live there seems absolutely no sign of prices coming down, still ridiculous prices £400k for a iffy 2 bed flat for example. Any comments would be appreciated.

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I just read Merv's letter. It could have been written by Brown. No need to worry about 5.3% RPI, it seems to be a statistical quirk that will even out over the......ECONOMIC CYCLE!!!!! But the economic cycle has been abolished Merv, Brown banned it, or has that nasty Con/Lib alliance resurected the cycle. Never mind.....as sure as death and taxes it will all be OK in the end.

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I just read Merv's letter. It could have been written by Brown. No need to worry about 5.3% RPI, it seems to be a statistical quirk that will even out over the......ECONOMIC CYCLE!!!!! But the economic cycle has been abolished Merv, Brown banned it, or has that nasty Con/Lib alliance resurected the cycle. Never mind.....as sure as death and taxes it will all be OK in the end.

Merv and Brown are two cheeks of the same arsehole. Meddlers, liars, they think they can run an economy but have only created ruin through their manipulation of remits, manipulation of statistics and both excel in the production of soundbatites and blather. Both also wedded to their positions in power.

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Looking for some advise really, In sold my property in 2007 (May) and have been renting in SW London ever since, In have an urge to get back on the property market and buy again, but am worried that if I do, house prices fall and i'm on to a loser. Also worried that if I don't get back on the ladder and by 2011 (end of) prices start to go stupid again, I'll be left behind. Where I live there seems absolutely no sign of prices coming down, still ridiculous prices £400k for a iffy 2 bed flat for example. Any comments would be appreciated.

I'd start your own thread on the main board. I think any advice my get lost in the general arguments about interest rates

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Really? We're in the middle of a massive commodity bubble and Sterling sell off and they're doing nothing about it.

Thats the thing.This inflation is from two things.The pound going through the floor and commods.I import a lot from China,goods that were say £12 each a year ago are around £20 now and im looking at 20% to 50% increases on everything.Its putting around 20% on prices here.

Its a real trap though.Do they protect sterling and kill off any manufacturing recovery and crash house prices,or let inflation rip and hope the economy re-balances.

Its a tough call.What is sure is wages wont follow and people even if interest rates only go to 2% will be stung hard.Ideal would be if sterling stayed around £1-$1.50/$1.60 for the medium term.

We could be close to a sterling shock and very high inflation,but without the wage rises it wont help debtors,it will destroy them.This budget coming up is make or break.

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Bring on hyperinflation, may even see Mervyn Kunt's 5 million pension pot shredded to worthless paper, even if it is invested in fake inflation protecting bonds it will still be worth nothing under such circumstances.

And you don't think he will have a hedge against this (hint: where do you think the UK gold is kept)? Bringing on the apocalypse will not affect him, it will be far worse for the poor. Hope that what you wish for doesn't come true as I would hate to see tens of millions of people suffer just because you want to see King brought down.

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I just read Merv's letter. It could have been written by Brown. No need to worry about 5.3% RPI, it seems to be a statistical quirk that will even out over the......ECONOMIC CYCLE!!!!! But the economic cycle has been abolished Merv, Brown banned it, or has that nasty Con/Lib alliance resurected the cycle. Never mind.....as sure as death and taxes it will all be OK in the end.

If you make the economic cycle big enough it will even out over time.

Fiat is dead.

Still at least the BoE pension scheme will be doing well out if it.

Edited by interestrateripoff
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Imagine the impact of historically 'average' IR's of say 6-7%.

http://uk.finance.yahoo.com/news/five-million-home-owners-unable-to-afford-interest-rate-rise-tele-89e099a80613.html?x=0

More than five million home owners will be unable to afford a rise in interest rates and will be in danger of being evicted from their homes, charities have warned.

Despite repossessions falling slightly at the start of the year, charities and housing experts warned home owners remained vulnerable to a rise in interest rates which would put additional pressure on their finances.

Research suggested as many as one third of home owners would not be able to afford a rise in their household budgets.

Campbell Robb, chief executive of Shelter, said: Some 5.4million mortgage holders havent even thought about how they will pay their mortgage if interest rates go up. We know for a significant number of people, just keeping on top of their current mortgage repayments is a constant struggle.

While repossessions are lower than originally feared, home owners with tracker mortgages will see their monthly repayments rise if interest rates go up. Many borrowers who have come to the end of their original deal have already seen their costs increase.

Economists also warned of wage freezes, rising debt levels and tight lending conditions.

Some 9,800 people lost their homes during the three months to the end of March, 8 per cent fewer than the previous quarter and 26 per cent below the figure for the same period a year earlier, according to the latest repossession figures published by the Council of Mortgage Lenders.

The number of people in mortgage arrears also dropped, with historically low interest rates helping home owners to keep up with their monthly payments.

The Bank of England has kept interest rates at 0.5 per cent for more than a year, but they are widely predicted to rise next year.

Howard Archer, an economist at Global Insight, said: Any rise in interest rates would be liable to send a significant number of financially stretched homeowners over the edge.

And Ed Stansfield, chief property economist at Capital Economics, said: In truth, the outlook is finely balanced. Many households are struggling to make ends meet.

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Looking for some advise really, In sold my property in 2007 (May) and have been renting in SW London ever since, In have an urge to get back on the property market and buy again, but am worried that if I do, house prices fall and i'm on to a loser. Also worried that if I don't get back on the ladder and by 2011 (end of) prices start to go stupid again, I'll be left behind. Where I live there seems absolutely no sign of prices coming down, still ridiculous prices £400k for a iffy 2 bed flat for example. Any comments would be appreciated.

As Baby Eating Boomer says start a new topic would probably be the best plan.

As for advice ? I am not the best to give any !! I don't really have a clue. I don't think many do. I just guestimate.

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And they will be. This year's negotiations will be fierce considering many took a cut or freeze last year.

In the private sector if the economy is still dodgy (and it will be) then those demanding a rise have very little leverage. Especially if they are trapped, paying a big mortgage or with large personal debt commitments. Debt is a great way to keep people under control.

With the pressure for public sector cuts I can't see large payrises on the cards for those workers either. And they also have mortgages to pay and credit card debt to service too ....

What with the demise of unionisation, the globalisation effect and generally all-round poor economic prospects, I'd say that the ability of the average worker to attain higher pay has rarely been lower in modern times.

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The direction of this thread points to the new investment paradigm; put your wealth where it suffers the least, relative to all other assets. That's the strategy for now, and it doesn't look like it will change any time soon.

1970's : inflation.

1980's : value.

1990's : growth.

2000's : bubblicious real assets.

2010+ : safety.

On that note, gold has been on the decline for the last couple of days...

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In the private sector if the economy is still dodgy (and it will be) then those demanding a rise have very little leverage. Especially if they are trapped, paying a big mortgage or with large personal debt commitments. Debt is a great way to keep people under control.

With the pressure for public sector cuts I can't see large payrises on the cards for those workers either. And they also have mortgages to pay and credit card debt to service too ....

What with the demise of unionisation, the globalisation effect and generally all-round poor economic prospects, I'd say that the ability of the average worker to attain higher pay has rarely been lower in modern times.

The outlook appears gloomier than at any time since the 70's. Massive government deficit,,,massive levels of individual debt....price inflation...wage deflation....weak pound....growing unemployment...government spending cuts....an economy dependant on finance sector which as we nknow is a liability......banks not lending as their balance sheets are depleted and will get worse as house prices fall...please point out some good news!

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And you don't think he will have a hedge against this (hint: where do you think the UK gold is kept)? Bringing on the apocalypse will not affect him, it will be far worse for the poor. Hope that what you wish for doesn't come true as I would hate to see tens of millions of people suffer just because you want to see King brought down.

There have also been numerous threads over the last year or so, pointing out that the BoE pension pot is invested heavily in Index Linked Gilts.

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So, house prices have already halved and continue to fall in almost any major measure you care to mention except the one I am paid and save in. Ten years of hard work and restraint trying to get my first foot on the ladder and now my money's being stolen from me to prop up the very people who have been enjoying homes beyond their means all this while. Thanks a lot you lying thieving scum.

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How will the govt be paying for these increases? More deficit spending?

Duh the magic printing press, this time next year we'll have 20 trillion each, and won't be able to buy a loaf of bread, Cnago will be laughing at us, and Injin will be saying I told you so.

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That people who work for the BoE have little vested interest in protecting the value of sterling.

But they do have a vested interest in preventing it collapsing completely.

I think that is something many here forget about. Merv and his pals get paid in £. They may be stupid, but they are not completely stupid.

I hope !!

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