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Cpi 3.1%, Rpi 4.6%

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And some people want more QE? :o

Given the QE already done, the rate of inflation is low IMHO

However, not sure it justifies 0.5% rate

Edit: it should also be remembered both CPI and RPI are below 2008 peaks, and that CPI has not gone past its 2008 peak

Edited by FaFa!

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They mentioned on BBC this morning that this months RPI figures are important for the rates set for pensions and benefits, and that they were also dependent on the difference between this months figures and September's figures. I thought this was a bit odd at the time, can any bright HPC'er elaborate?

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They talk about Temporary factors, but the costs of Mortgages in RPI will see an increase as people come off tracker deals and go onto SVR. SVR is huge compared to LIBOR as banks get greedy....and this will be factored into future RPI for several years!

CPI also only going up, world wide consumption increasing because of Asian influences. Commodities rising, demand rising...costs out of control! Nothing the BoE can do as they have devalued pound and that is no longer working.....

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They mentioned on BBC this morning that this months RPI figures are important for the rates set for pensions and benefits, and that they were also dependent on the difference between this months figures and September's figures. I thought this was a bit odd at the time, can any bright HPC'er elaborate?

The key is this September vs last September as that increase is what is used for pensions.

In this case it is Cpi +3.1%, Rpi +4.6% so that is what will be used.

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CPI also only going up, world wide consumption increasing because of Asian influences. Commodities rising, demand rising...costs out of control! Nothing the BoE can do as they have devalued pound and that is no longer working.....

That's assuming the global depression doesn't kick in.

My moneys on biflation

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They mentioned on BBC this morning that this months RPI figures are important for the rates set for pensions and benefits, and that they were also dependent on the difference between this months figures and September's figures. I thought this was a bit odd at the time, can any bright HPC'er elaborate?

Not sure that whoever wrote the story for the BBC knows anything about inflation and benefits. They list housing benefit as going up by CPI -- it will in the future, but it's currently set according to local surveys of rents and won't be based on CPI until a couple of years from now.

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CPI as predicted 3.1% from last month's 3.1%

RPI 4.6% down from 4.7%, 4.4% predicted

Core CPI 2.7%, down from 2.8%, 2.6% predicted

All year on year

Thanks for the info.

We were living beyond our means. What is unsustainable, can't be sustained. Both house prices and sterling.

In terms of government economic policy these situations manifests themselves as cases of "between a rock and a hard place". Like this one.

If they QE, we will have inflation - sterling and (real) house prices will fall.

If they don't QE, we will have recession - sterling and house prices will fall.

Gravity always wins.

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Given the QE already done, the rate of inflation is low IMHO

However, not sure it justifies 0.5% rate

Edit: it should also be remembered both CPI and RPI are below 2008 peaks, and that CPI has not gone past its 2008 peak

Add in 1.7% or so from the increase in VAT come January, and with a little help from the surge in wheat and corn prices, CPI will be above 5% in a few months.

It's the same play book the UK has followed for the past 50 years -- encourage rampant speculation in the property and financial markets through negative real interest rates, and then wonder why no one invests in industry.

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Add in 1.7% or so from the increase in VAT come January, and with a little help from the surge in wheat and corn prices, CPI will be above 5% in a few months.

It's the same play book the UK has followed for the past 50 years -- encourage rampant speculation in the property and financial markets through negative real interest rates, and then wonder why no one invests in industry.

Of course regulated rail fares are set to rise by 5.6% (RPI plus 1%) assuming the govt doesn't change the rules. That will add something to the travel cost element of CPI in January won't it?

No wonder NSI stopped selling their index linked bonds.

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Inflation is high and I can see it increasing even further. We have the VAT rise coming, commodities are increasing and sterling is a dog. Inflation will be 5% by January at this rate.

Interest rates need to start rising gradually now. More QE would clearly be mad at this stage.

Government deficit spending and printing money does not create jobs or long term growth. The US seems to be slowly waking up to this. It will stifle the private sector with excessive taxation to pay off the debt long term and reduce growth significantly. All Our economic policy seems focused on the extreme short term will little thought of the longer term consequences.

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The key is this September vs last September as that increase is what is used for pensions.

In this case it is Cpi +3.1%, Rpi +4.6% so that is what will be used.

Yes - and this compares with the previous year which was -1.4% (no decrease in pension but no rise)

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They mentioned on BBC this morning that this months RPI figures are important for the rates set for pensions and benefits, and that they were also dependent on the difference between this months figures and September's figures. I thought this was a bit odd at the time, can any bright HPC'er elaborate?

So, we can assume that the pensions bill will go up 4.6%, and since more people are retiring than dropping dead (selfish, quite frankly), the overall increase will be at least 5%. That's more than all the welfare cuts announced so far.

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Add in 1.7% or so from the increase in VAT come January, and with a little help from the surge in wheat and corn prices, CPI will be above 5% in a few months.

It's the same play book the UK has followed for the past 50 years -- encourage rampant speculation in the property and financial markets through negative real interest rates, and then wonder why no one invests in industry.

Which will presumably force up interest rates. Even 5% CPI is not the stuff of hyperinflationary holocaust predicted by many on this forum.

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Inflation is high and I can see it increasing even further. We have the VAT rise coming, commodities are increasing and sterling is a dog. Inflation will be 5% by January at this rate.

Inflation of 3.1% is high? It isn't - it is near historic lows.

Interest rates need to start rising gradually now. More QE would clearly be mad at this stage.

Indeed.

Government deficit spending and printing money does not create jobs or long term growth. The US seems to be slowly waking up to this. It will stifle the private sector with excessive taxation to pay off the debt long term and reduce growth significantly. All Our economic policy seems focused on the extreme short term will little thought of the longer term consequences.

Absolutely.

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Inflation of 3.1% is high? It isn't - it is near historic lows.

Figures are ********. real RPI around 8-10%. especially judging by food price rises (which these days is done by making the quantity you buy less and not raising the price)

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talk of QE2, with inflation stubbonly above target, is a bit odd... it kind of reminds me of the way that justification for the iraq war started off as WMD before becoming 'regime change'... i wonder if with QE the initial justification of 'threat of deflation' is similarly turning into something else, although exactly what that might be i cannot say...

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Inflation of 3.1% is high? It isn't - it is near historic lows.

Absolutely.

CPI was barely above 3% 1995/96 - Mid 2008. Since the depths of November 2008 it has bounced back to it's previous trend over 3%. If the BOE are serious about inflation they need to raise rates slowly now. Inflation is always one step ahead of the MPC, they only react after they have a problem.

http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=GBP

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CPI was barely above 3% 1995/96 - Mid 2008. Since the depths of November 2008 it has bounced back to it's previous trend over 3%. If the BOE are serious about inflation they need to raise rates slowly now. Inflation is always one step ahead of the MPC, they only react after they have a problem.

http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=GBP

That's a highly selective set of dates. 3% is not much, historically

http://www.statistics.gov.uk/statbase/tsdtables1.asp?vlnk=mm23

Table 3.6 is interesting. 1800 to date

But I think we agree basically. The problem is that even small amounts of inflation and hence interest rate rises will finish us off.

Edited by FaFa!

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  • 149 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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