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Cpi And Rpi Overreported

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This is purely based on my own personal opinion. My wife and I are on a good income with me full time and her part time bringing in around 80,000 pound per year. We are very keen savers and save more than 20.000 per year but we do like to buy "material things".

We very rarely buy things we want unless we find a bargain. For example recently bought a super king bed frame from M and S reduced fro, 750 to 250 pounds (cheaper than the single, double and king). Therefore the price of most things we buy appear to have heavily deflated. This is for non essentials only.

Food obviously is more expensive but we have started shopping in waitrose since a new store opened near us and petrol costs are going up.

The point is that for things that you buy on the high street which are non essential as more and more people cotton on to this great deflation the more prices will go down. The high street also has to compete with online discount vouchers and cashback.

I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

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I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

Conversely, how much disposable income will consumers have for non-essential saving if inflation keeps rising?

It's practically a zero sum game in that respect. The biggest thing which will influence interest rates (IMHO) is the level of new lending (M4). provided M4 becomes reasonably buoyant I see no reason why rates should not rise.

At present you may be right because the last data I saw M4 was looking very sick.. but then that is hardly a good indicator for future house prices.

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This is purely based on my own personal opinion. My wife and I are on a good income with me full time and her part time bringing in around 80,000 pound per year. We are very keen savers and save more than 20.000 per year but we do like to buy "material things".

We very rarely buy things we want unless we find a bargain. For example recently bought a super king bed frame from M and S reduced fro, 750 to 250 pounds (cheaper than the single, double and king). Therefore the price of most things we buy appear to have heavily deflated. This is for non essentials only.

Food obviously is more expensive but we have started shopping in waitrose since a new store opened near us and petrol costs are going up.

The point is that for things that you buy on the high street which are non essential as more and more people cotton on to this great deflation the more prices will go down. The high street also has to compete with online discount vouchers and cashback.

I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

What you are experiencing is competition between struggling retailers trying to stay afloat. If a bed frame won't shift at 750, get rid of it at 250, even if it incurs a loss, at least you're not paying to store the bloody thing and it claws some cash back into the coffers.

As more struggling, over-indebted, retailers fail, this type of competition will die down, until only the well capitalised winners are left on the high street. At that point prices will start to go up in earnest, as the remaining companies will be able to afford to operate at a profit (even if volumes are low) without competition from desperate failing retailers.

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.... My wife and I are on a good income with me full time and her part time....

I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

Err...your wife...she's not a member of the MPC is she? :D

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As more struggling, over-indebted, retailers fail, this type of competition will die down, until only the well capitalised winners are left on the high street. At that point prices will start to go up in earnest, as the remaining companies will be able to afford to operate at a profit (even if volumes are low) without competition from desperate failing retailers.

But don't worry, there'll be less people in competition to purchase said items, what with them losing their jobs because you wanted a bargain... :P

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This is purely based on my own personal opinion. My wife and I are on a good income with me full time and her part time bringing in around 80,000 pound per year. We are very keen savers and save more than 20.000 per year but we do like to buy "material things".

We very rarely buy things we want unless we find a bargain. For example recently bought a super king bed frame from M and S reduced fro, 750 to 250 pounds (cheaper than the single, double and king). Therefore the price of most things we buy appear to have heavily deflated. This is for non essentials only.

Food obviously is more expensive but we have started shopping in waitrose since a new store opened near us and petrol costs are going up.

The point is that for things that you buy on the high street which are non essential as more and more people cotton on to this great deflation the more prices will go down. The high street also has to compete with online discount vouchers and cashback.

I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

The experience of you and your wife is so typical of the general UK population that your analysis must be correct.

Oh hold on...

:lol:

:lol:

:lol:

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This is purely based on my own personal opinion. My wife and I are on a good income with me full time and her part time bringing in around 80,000 pound per year. We are very keen savers and save more than 20.000 per year but we do like to buy "material things".

We very rarely buy things we want unless we find a bargain. For example recently bought a super king bed frame from M and S reduced fro, 750 to 250 pounds (cheaper than the single, double and king). Therefore the price of most things we buy appear to have heavily deflated. This is for non essentials only.

Food obviously is more expensive but we have started shopping in waitrose since a new store opened near us and petrol costs are going up.

The point is that for things that you buy on the high street which are non essential as more and more people cotton on to this great deflation the more prices will go down. The high street also has to compete with online discount vouchers and cashback.

I think all this talk about rising interest rates is a tad ridiculous. Maybe a token rise or two over the next few years but people will simply stop any non essential spending if rates go up. Savers won't start spending. Lets face it savers don't spend if they're anything like me they just hoard most of their cash until bargains come along.

That's my experience too, and I agree on no base rate rises.

I won't accept the inflation thesis until it hits my own pocket. Fuel prices are ridiculous, but I expect they'll collapse by year end. Increasingly I spend less on other stuff while maintaining the quality. People who find otherwise aren't trying hard enough. The exact opposite of inflation expectation. And I reckon internet shopping still has huge capacity for price reductions - or at least for driving conventional retailers out of bricks and mortar. I am expecting eye-watering price rises during the summer, but my guess is that this will turn even more people away from conventional shopping.

Congreve makes a good point about price rises through reduced competition, but those prices reduce the ability of consumers to spend when they can't increase their capacity to borrow. And the internet thrifters will still have a deflation expectation, because price discovery and purchase are instantaneous.

Overall, it's an awkward balance. May continue for so long that people will wonder how it could have been any other way. The new normal.

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That's my experience too, and I agree on no base rate rises.

I won't accept the inflation thesis until it hits my own pocket. Fuel prices are ridiculous, but I expect they'll collapse by year end. Increasingly I spend less on other stuff while maintaining the quality. People who find otherwise aren't trying hard enough. The exact opposite of inflation expectation. And I reckon internet shopping still has huge capacity for price reductions - or at least for driving conventional retailers out of bricks and mortar. I am expecting eye-watering price rises during the summer, but my guess is that this will turn even more people away from conventional shopping.

Congreve makes a good point about price rises through reduced competition, but those prices reduce the ability of consumers to spend when they can't increase their capacity to borrow. And the internet thrifters will still have a deflation expectation, because price discovery and purchase are instantaneous.

Overall, it's an awkward balance. May continue for so long that people will wonder how it could have been any other way. The new normal.

You need to check out the ongoing quality and makeup of the food you buy. Inflation is being imposed upon us in quite insidious ways. Food may not be getting more expensive at the till but "units" are getting smaller and anything made up of basic foodstuffs is getting less of the good stuff and more "fillers". I've been on the lookout for this so it's been clear to me for some time but even my OH who doesn't really pay that close attention has noticed - it's been that obvious.

Base rates may not rise and exchange rate may well remain the same but that means f*ck all. ALL major currencies are being devalued against food, energy and commodities at pretty similar rates. The frog is sitting happily away in its pan of comfy warm water and has no awareness of its inevitable demise as the water finally hits boiling point

Edited by salamander

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  • 284 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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