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TheCountOfNowhere

Inflation Up: Cpi 0.6 Rpi: 1.9

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Just the start.Wait until the $ index falls and money flows into commods and emerging markets.Almost every western boomer and BTLer has bought the deflation trade/low interest rates forever.History would say they will be proved very very wrong.

"My bank doesnt give me 5% anymore i need to replace that income Mr Advisor"."Oh buy a couple of BTL with 5% gross yields and these blue chips yielding 3%.

Dont worry about interest rates,they are never going up."

Inflation expectations are already moving up,as can be seen from commod prices since January.This interest rate cycle will perhaps break higher sooner than people think,or if not sooner then perhaps when it does turn,the increases could be fast and house price falls severe.

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Why do interest rates need to raise? Inflation is good!

If things become more expensive, the plebs have to work harder for longer and pay more taxes for longer.

Simples!

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I'm sure they'd like to get CPI down in September in order to control index-linked public sector pensions. I think that in September last year it was -0.1, so there was no index-linked pension increase.

Edited by LiveinHope

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Hooray! #Brexit succeeds in fighting deflation, which apparently according to the doctrine that has been pushed by the TPTB is 'good', right?

Or is inflation only good when it can't be attributed to Brexit? I do notice that the BBC report at least isn't exactly over-emphasising the Brexit angle, unlike most economic stories where Brexit is held up as causing x, y or z. In this case, it largely can be said to have provoked the surge in official inflation stats although it's being downplayed.

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Hooray! #Brexit succeeds in fighting deflation, which apparently according to the doctrine that has been pushed by the TPTB is 'good', right?

Or is inflation only good when it can't be attributed to Brexit? I do notice that the BBC report at least isn't exactly over-emphasising the Brexit angle, unlike most economic stories where Brexit is held up as causing x, y or z. In this case, it largely can be said to have provoked the surge in official inflation stats although it's being downplayed.

I doubt that enough of the Brexit inflation has arrived yet to impact upon today's figure.

According to Bloomberg this morning the inflation from the 12-13% drop in value of the £ will only amount to an extra 1% of inflation (sounds low to me).

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Inflation increasing so Carney's recent interest rate reduction (down to levels maybe last seen in early neolithic times) might well have been a step too far.

Edited by billybong

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RPI and CPI continue to diverge...my one regret I didn't fill my boots more with NS and I index linkers...got three tranches of 15k before they were withdrawn and these are linked to RPI.

Look at what you pay now for 2.5% index linked treasury stock......a mega negative yield.

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I don't know why anyone should be surprised by this. If you render a currency valueless by producing ever more of it, you shouldn't be surprised that it requires more of that infinite money to purchase the same amount of goods.

I expect that they will have abolished cash by the time we need a wheelbarrow of the stuff to go and buy food. I don't think that there has been a single historical example of such increase in the amount of money in circulation not leading to damaging inflation.

Damaging, that it, unless you have £1.7 trillions of national debt to inflate away....

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I doubt that enough of the Brexit inflation has arrived yet to impact upon today's figure.

I agree, the post brexit slide in sterling is still to impact the figures. Anyway, no chance of oil strengthening to compound the situation. ...oh er...

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I was in a newsagents earlier and the average chocolate bar was around 70p, I can remember 15 years back there were 25. Still, HPI makes that look like peanuts!

Really wouldn't mind if Mars hadn't reduced all its bars to funsize...we are not all wobbling fatties that need protection from ourselves.

Edited by crashmonitor

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I was in a newsagents earlier and the average chocolate bar was around 70p, I can remember 15 years back there were 25. Still, HPI makes that look like peanuts!

The Freddo Frog inflation index beats HPI, gone from 5p to 25p in 12 years.

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I'm sure they'd like to get CPI down in September in order to control index-linked public sector pensions. I think that in September last year it was -0.1, so there was no index-linked pension increase.

I am terribly cynical about the manipulation of these numbers.

RPI shoots up for the month rail fare rises are based on - but expect a CPI fall in September as that is the basis used for uprating pensions and benefits.

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I am terribly cynical about the manipulation of these numbers.

RPI shoots up for the month rail fare rises are based on - but expect a CPI fall in September as that is the basis used for uprating pensions and benefits.

Quite - I am intrigued to see September's figure.

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I was in a newsagents earlier and the average chocolate bar was around 70p, I can remember 15 years back there were 25. Still, HPI makes that look like peanuts!

Stop buying chocolate bars....you will feel far better off without it. ;)

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I doubt that enough of the Brexit inflation has arrived yet to impact upon today's figure.

According to Bloomberg this morning the inflation from the 12-13% drop in value of the £ will only amount to an extra 1% of inflation (sounds low to me).

There is a BOE paper on this , I read it a while ago so don't have a link. They estimate the 'passthrough' to CPI of a 10% devaluation to be between 1:10 and 2:10 i.e between 1 and 2 % rise in CPI for every 10 % devaluation.

Following the GFC and £ devaluation CPI hit 5% and the BOE didn't do jacksh.it other than write lots of letters, I don't expect it to be any different this time, they will 'look through' the temporary base effects on CPI.

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I'm sure they'd like to get CPI down in September in order to control index-linked public sector pensions. I think that in September last year it was -0.1, so there was no index-linked pension increase.

True,remember though all working age benefits are frozen for four years.They make up about half of the welfare budget.If you want to pull the welfare bill down you really want some inflation the next four years.Handy,as i expect that is just what we are going to get,as has always been the case when so much money was printed/created.US treasuries will take the brunt of the selling i expect but gilts might not be far behind.

Its a shame they couldnt of waited a few years,we could of had round two of "The roaring twenties" :lol:

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Following the GFC and £ devaluation CPI hit 5% and the BOE didn't do jacksh.it other than write lots of letters, I don't expect it to be any different this time, they will 'look through' the temporary base effects on CPI.

Of course not; the only inflation that worries them is wage inflation.

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Of course not; the only inflation that worries them is wage inflation.

I think there will be wage inflation....but not for everyone. There will also be the bigger problem of growing unemployment/underemployment. ;)

Edited by winkie

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Wonder what it would be if they included housing costs? 5%? 10%?

Quite.

can anybody find the basket of goods for both CPI 2016 and RPI 2016......as I understand it housing is in RPI, not the cost to buy it but only the cost to service it..... ;)

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Waiting to see the impact on HTB equity loan interest repayment. It is tied to RPI

For this scheme you must have a mortgage, which will be a first charge, as the equity loan can only be a second charge. The equity loan is for a maximum of 25 years or before if the property is sold or the mortgage is redeemed, whichever term is the shorter of the two.

You will not be charged any interest on the 40% loan for the first five years of owning your home. However a management fee of £1 a month will be applicable from the date of purchase. From year six, a fee of 1.75% is payable on the equity loan, which rises annually by RPI (Retail Price Index) inflation plus 1%.

Rising RPI = Rising interest rate.

Edited by Fairyland

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