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Inoperational Bumblebee

Inflation up Feb 2017 - CPI 2.3%

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40 minutes ago, satch said:

What are housing costs? I guess (like the old CPIH) rent and cost of servicing mortgages at 400 year low interest rates ............ nothing to do with purchase PRICES of property even though the P I assume stands for PRICE

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2 hours ago, Futuroid said:

The Brexocharger is spinning up...

That's precisely why i voted to leave me old china......

Shake the tree, isn't it?

The madness had to end one way or another.

However, the fact that the pound is the same vs the Euro, as it was 2-3 years ago seems lost on many.

Could it be opportunist gouging? Surely not.

We only had a temporary boost due to the Swiss playing shinky shonky.

I'm sure you know this though...

I'm off to check on my NSI Index linkers.... byeee!

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2 hours ago, Little Frank said:

It's not a monthly target. It's over the 'forecast horizon'. Which is right. Why would a central bank raise/lower rates on a monthly basis? That would be insane.

Deploy the fan charts...

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2 hours ago, Futuroid said:

You must have bought the long distance version. The government will wish to do very little at this sensitive stage - imagine if over indebted Tory voters in the home counties started struggling to pay their mortgages at the precise moment the Brexit negotiations are starting... Not good for the voting intentions dear boy, not good for the voting intentions.

She should call an election. Much more risk in waiting.

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15 minutes ago, shindigger said:

She should call an election. Much more risk in waiting.

Can't till fixed parliament lenght act amended.

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3 hours ago, Little Frank said:

It's not a monthly target. It's over the 'forecast horizon'. Which is right. Why would a central bank raise/lower rates on a monthly basis? That would be insane.

But surely they should have forecast it was going to exceed the level 6 months ago, and therefore have raised rates before now in order to take anticipatory action?

They can't have their cake and it it.

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Ultimate sign of raging inflation - BoE will have to act upon this news...

 

 

Our myWaitrose free tea and coffee offer is one of the ways we thank our customers for shopping with us - and we want all our customers to be able to enjoy a free hot drink when they shop with us in our branches.

From 3 April, we'll simply be asking myWaitrose members to make a purchase* before collecting their cup at the checkout.

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Real inflation is a very real problem.

Very much weighing heavily in any perceived gains in exports touted by UK.gov.

Pretty sh1te for manufacturing, very much so for those buying big good orders from China / India since many of these transactions are based in USD.

https://www.theguardian.com/business/2016/nov/01/weak-pound-boosts-uk-manufacturing-steep-import-cost-rise

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/feb2017#why-has-the-cost-of-imported-metals-reached-record-levels-and-how-is-this-feeding-through-to-factory-gate-prices

C7cFu2kWkAANFTi.jpg

It's all good if you're an exporter of the intangible... such as digital stuff I guess.

Sadly I haven't gotten the raise or raises on horizon to cover all this Brexit induced inflation!

 

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1 hour ago, shindigger said:

That's precisely why i voted to leave me old china......

Shake the tree, isn't it?

The madness had to end one way or another.

However, the fact that the pound is the same vs the Euro, as it was 2-3 years ago seems lost on many.

Could it be opportunist gouging? Surely not.

We only had a temporary boost due to the Swiss playing shinky shonky.

I'm sure you know this though...

I'm off to check on my NSI Index linkers.... byeee!

They won't dare let the housing market crash if it could be blamed on Brexit. Don't rush count those NSI bonds, you're going to have plenty of time!

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18 minutes ago, hotairmail said:

I'm surprised the students aren't out on the streets protesting at the Bank of Englands response - printing more money and cutting interest rates to cause the interest rate on their student loans to balloon as a result of RPI going up.

Sadly, I don't think they understand how the Bank mismanaging monetary policy like this and 'looking through' inflation is affecting their indebtedness!

My daughter's student loan interest rate has now risen to 6.2% as a result of Carney.

(3% + RPI) - surely the government can borrow more cheaply than this rather than hiding these debts on private balance sheets!

The smart ones didn't take out a loan. 

They studied in the Netherlands for €2K a year tuition and funded it via a year working beforehand.

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We should start a lottery on this site, with the question for all of us to answer as follows:

"How high will British CPI go before the BOE says that they can no longer "look through" the rate, actually raise rates, and not once, but twice, thrice and for a fourth and fifth time in rapid succession ? "  

My guess, based on the actions, lies and dissembling of Merv the Swerve half a decade ago, is 6.5% ( yes, six percent, almost three times the CPI we have now).

But maybe not even then. Little surprises me these days. Any other guesses ?

 

 

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7 minutes ago, Society of fools said:

We should start a lottery on this site, with the question for all of us to answer as follows:

"How high will British CPI go before the BOE says that they can no longer "look through" the rate, actually raise rates, and not once, but twice, thrice and for a fourth and fifth time in rapid succession ? "  

My guess, based on the actions, lies and dissembling of Merv the Swerve half a decade ago, is 6.5% ( yes, six percent, almost three times the CPI we have now).

But maybe not even then. Little surprises me these days. Any other guesses ?

 

 

 

Fwiw I think it's nigh on impossible for CPI to hit 6.5% due to its construction. 2 massive devaluations and 2 doublings in oil price in the last decade suggest the short-run limit is around 5% (give or take)

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57 minutes ago, hotairmail said:

I'm surprised the students aren't out on the streets protesting at the Bank of Englands response - printing more money and cutting interest rates to cause the interest rate on their student loans to balloon as a result of RPI going up.

Sadly, I don't think they understand how the Bank mismanaging monetary policy like this and 'looking through' inflation is affecting their indebtedness!

My daughter's student loan interest rate has now risen to 6.2% as a result of Carney.

(3% + RPI) - surely the government can borrow more cheaply than this rather than hiding these debts on private balance sheets!

It's dependent upon RPI in March but also level of income, but yes, daft to sell off the student loan book to private rentiers and even more daft to sweeten the pot by charging RPI+

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678755&_dad=portal&_schema=PORTAL

The interest rate is based on the UK Retail Price Index (RPI) and will vary depending on your circumstances.

 

The interest rate is updated once a year in September, using the RPI from March of that year.

 

What is RPI?

RPI - The Retail Price Index, RPI, is a measure of UK inflation. It measures changes to the cost of living in the UK. The UK government uses the rate of RPI for many purposes, including setting the interest rate charged on student loans.

Your circumstances Interest rate
Whilst studying and until the April after leaving the course  RPI plus 3% (4.6% for 2016/17)
From 6 April after leaving your course until the loan is repaid in full  Variable rate dependent upon income. RPI (1.6%) where income is £21,000 or less, rising on a sliding scale up to RPI plus 3% (4.6%) where income is £41,000 or more
If you don’t respond to our requests for information or evidence  RPI plus 3%,(4.6%) irrespective of income, until we have all the information we need
 

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10 minutes ago, Little Frank said:

 

Fwiw I think it's nigh on impossible for CPI to hit 6.5% due to its construction. 2 massive devaluations and 2 doublings in oil price in the last decade suggest the short-run limit is around 5% (give or take)

It hit 5% on the back of QE alone a few years back. Now we have more QE and a hefty currency devaluation.

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Just now, rantnrave said:

It hit 5% on the back of QE alone a few years back. Now we have more QE and a hefty currency devaluation.

No, it was the oil/commodity price bounce off the 2009 collapse (which wasn't related to QE per se. You only have to look at what happened to oil/commodity/gold prices subsequently to see that)

We had a bigger currency devaluation then too. 2.1 down to 1.36 v USD iirc

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8 minutes ago, Little Frank said:

 

Fwiw I think it's nigh on impossible for CPI to hit 6.5% due to its construction. 2 massive devaluations and 2 doublings in oil price in the last decade suggest the short-run limit is around 5% (give or take)

Sigh..... that's depressing if so. I very well remember Merv the magician at the time that CPI was overspilling 5%, and several journalists did actually ask "financial experts" on the major news programs at that time on whether "this means that the BOE will raise interest rates?"

The response from the various CityBanker/Academic talking heads was uniformly, "Oh no, I really think that is not an option  for the BOE as there is simply too high a level of household debt and higher interest rates would make it very difficult for ordinary people to pay their mortgage."

Inevitably delivered by said City Banker/Academic with a tone of someone who is very happy to deliver good news, like a doctor announcing a benign biopsy result for a cancer probe. And inevitably received by the journalist with a welcoming smile that more or less screamed out, " well that's a huge relief then isn't it ?"

It was enough to make you want to scream in impotent frustration and throw the potplant at the TV screen.....

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5 minutes ago, Society of fools said:

Sigh..... that's depressing if so. I very well remember Merv the magician at the time that CPI was overspilling 5%, and several journalists did actually ask "financial experts" on the major news programs at that time on whether "this means that the BOE will raise interest rates?"

The response from the various CityBanker/Academic talking heads was uniformly, "Oh no, I really think that is not an option  for the BOE as there is simply too high a level of household debt and higher interest rates would make it very difficult for ordinary people to pay their mortgage."

Inevitably delivered by said City Banker/Academic with a tone of someone who is very happy to deliver good news, like a doctor announcing a benign biopsy result for a cancer probe. And inevitably received by the journalist with a welcoming smile that more or less screamed out, " well that's a huge relief then isn't it ?"

It was enough to make you want to scream in impotent frustration and throw the potplant at the TV screen.....

If it's any consolation Jean-Claude Trichet DID raise ECB rates. 

It crashed the EZ economy and it's been falling apart ever since.

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5 minutes ago, Little Frank said:

If it's any consolation Jean-Claude Trichet DID raise ECB rates. 

It crashed the EZ economy and it's been falling apart ever since.

I don't buy that one. I worked in France from 2002 to 2005. There are other reasons for the utter slow growth sclerosis in the Eurozone economy.

The EZ's ( excepting Germany and Holland) have other issues: rigid labour markets, demographic challenges, crushing taxation, significant social barriers (not having kids, ethnic ghettos,not moving out of their home town and suchlike, language barriers) and a serious lack of cutting edge IT and industrial innovation.

I had an argument in Stockholm a few years back with some dead moth who reckoned that raising interest rates almost sank the Swedish economy into the Baltic and I just don't see the logic in it.

What ? We all need housing bubbles in order to have thriving  economy ?? Horseshit. And since when are Bank rates for industrial investment/business loans comparable to the free money given by bankers for housing investment ? Even an ant heap or a termite mound has a more sophisticated economy than that.

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2 hours ago, cashinmattress said:

Real inflation is a very real problem.

Very much weighing heavily in any perceived gains in exports touted by UK.gov.

Pretty sh1te for manufacturing, very much so for those buying big good orders from China / India since many of these transactions are based in USD.

https://www.theguardian.com/business/2016/nov/01/weak-pound-boosts-uk-manufacturing-steep-import-cost-rise

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/feb2017#why-has-the-cost-of-imported-metals-reached-record-levels-and-how-is-this-feeding-through-to-factory-gate-prices

C7cFu2kWkAANFTi.jpg

It's all good if you're an exporter of the intangible... such as digital stuff I guess.

Sadly I haven't gotten the raise or raises on horizon to cover all this Brexit induced inflation!

 

For that graph pretty much see a continuation in a trend that turned in late 2015. Nobody expected a brexit vote so those rising costs not an anticipation of brexit in itself, more external factors - far too much money printing already. More QE and interest rate drop post brexit have had a large effect on costs and sterling devaluation too in continuing that trend.

Mind you, anybody's guess at real rate of inflation, have seen some food prices rise 20% since last year.

 

Edited by onlyme2

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2 hours ago, Futuroid said:

The smart ones didn't take out a loan. 

They studied in the Netherlands for €2K a year tuition and funded it via a year working beforehand.

The really smart ones will study in the UK and borrow to the hilt. Get a decent degree then head off abroad and default on the loan. Until last year, "abroad" probably meant outside of the EU. Now, for kids starting in year 1 at Uni, a small hope across the Channel to France/Belgium/Netherlands is all that will be required by the time they graduate in 3 years time ;)

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9 hours ago, Futuroid said:

You must have bought the long distance version. The government will wish to do very little at this sensitive stage - imagine if over indebted Tory voters in the home counties started struggling to pay their mortgages at the precise moment the Brexit negotiations are starting... Not good for the voting intentions dear boy, not good for the voting intentions.

I don't think it will matter much about voting intentions as there is no other credible party to vote for at the moment.

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So I will just buy less, shop for more bargains.     Not gonna spend more.

The economy can either get more efficient ... or contract in size.

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