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Cpi And Rpi Fall, Core Cpi Up

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CPI year on year: 3.2%, 3.2% expected, 3.4% previous

Core CPI year on year: 3.1%, 2.7% expected, 2.9% previous

RPI year on year: 5.0%, 4.9% expected, 5.1% previous

http://www.forexfactory.com/calendar.php

Reminder: NS&I are paying RPI increase +1% tax free and they don't use your money to leverage up to issue mortgages. I think every responsible HPC'r should be doing this to keep bank net lending as low as possible. Limit is £30K per person (+£30K per trust in kids names if you have any).

Warning : RPI increase could be 0 or less next year (although VAT is going up by 2.5% and pound is still struggling so I doubt it)

Disclaimer : I'm maxed out on these, waiting for the next issues and will max out again.

Edited by VeryMeanReversion

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I have these too and am going to buy more.

Just to point out as there has been confusion on here about the NS&I certificates. When people on here talk about RPI 'increase' being the way the payout is calculated on these investments, it is the increase as measured by the RPI Index. This is not the same as the percentage value of RPI.

Say at the start of the investment the RPI index stood at 200, and at the end it was 230, then the increase of the index is used to calculate to inflation based interest received.

For a simpler way to look at it, whatever the %RPI figure is when you cash the investment in, that is approx. the inflation linked interest you receive on top of the 1%.

For there to be no inflation linked interest to be paid, the %RPI at the end of the investment would have to be <0% i.e deflation. Its currently around 5% so if cashed in now would pay out 5+1=6%

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http://uk.reuters.com/article/idUKTRE66C1A120100713

Falling petrol prices pushed inflation down for a second month running in June, but underlying pressures rose and inflation over the quarter was higher than the Bank of England's latest forecast.

The Office for National Statistics said annual consumer price inflation fell to 3.2 percent from May's 3.4 percent after prices rose 0.1 percent on the month, as economists expected.

However, the older retail price measure of inflation fell less than expected as core CPI inflation -- which excludes energy and food prices -- unexpectedly rose.

"The obvious surprise was the rise in the core rate, which serves to underline this theme of price stickiness," said Ross Walker, UK economist at RBS. "Clearly it's not falling as much as we'd hoped and it's not making the BoE's job any easier."

During the second quarter, headline consumer price inflation averaged 3.5 percent, above the 3.3 percent predicted by the central bank in its May Inflation Report.

Gilts fell and sterling rose as investors sensed more BoE policymakers may be persuaded to join rate-rise advocate Andrew Sentance if underlying inflation does not resume a downward path.

Consumer price inflation hit a 17-month high of 3.7 percent in April, prompting concern that slack in the economy was failing to bear down on inflation to the degree expected.

BoE Governor Mervyn King remains convinced inflation will ease back towards its 2 percent target over the course of the year once past rises in oil prices and January's VAT rise fall out of the annual comparison, but recent BoE policy meetings have seen heated debates.

Well if you keep predicting by the law of averages you'll get it right at some point.

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http://uk.reuters.com/article/idUKTRE66C1A120100713

Well if you keep predicting by the law of averages you'll get it right at some point.

What Merv meant to say was "No, we wont be raising interest rates - **** those feckless savers."

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CPI Index value rose to 114.6 (from 114.4 in the previous month).

A full breakdown of the CPI changes for June is available here:-

http://www.statistics.gov.uk/pdfdir/cpi0710.pdf

The CPI all items table is available here:-

http://www.statistics.gov.uk/downloads/theme_economy/CPI.pdf

RPI Index value rose to 224.1 (from 223.6 in the previous month).

RPI all items table is available here:-

http://www.statistics.gov.uk/downloads/theme_economy/rp02.pdf

For King to see CPI broadly return to target rate of 2% in twelve months time, the CPI Index value must not exceed 116.9. Of course, VAT is scheduled to increase to 20% from 01/01/2011. This will have an inflationary effect. Any other additional 'price pressures'over the next 12 months portends an overshoot.

RPI may well soften a little as House Prices, and possibly rents, fall over the next twelve months ;) Unless, btw, Interest rates increase. In which case House Prices fall, but Housing 'costs' rise - a possibly neutral effect on RPI.

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Reminder: NS&I are paying RPI increase +1% tax free and they don't use your money to leverage up to issue mortgages. I think every responsible HPC'r should be doing this to keep bank net lending as low as possible. Limit is £30K per person (+£30K per trust in kids names if you have any).

Warning : RPI increase could be 0 or less next year (although VAT is going up by 2.5% and pound is still struggling so I doubt it)

Disclaimer : I'm maxed out on these, waiting for the next issues and will max out again.

I have a few index linked saving certificates. As far as I'm aware you can only put £15k into any one issue, or are you referring to something else?

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I have a few index linked saving certificates. As far as I'm aware you can only put £15k into any one issue, or are you referring to something else?

£15k per issue, but there is always a 3 year and a 5 year issue available, hence the £30k mentioned above.

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£15k per issue, but there is always a 3 year and a 5 year issue available, hence the £30k mentioned above.

Thanks for that, I hadn't thought of it!

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Disclaimer : I'm maxed out on these, waiting for the next issues and will max out again.

I'm maxed too, when are the next issues ?

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Also have 30k in these to keep my money away from the banks and BTL morons.

As has been mentioned the VAT increase and likely interest rises should keep RPI ticking along next year.

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  • 258 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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