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Charles_Darke

Inflation, No Rate Rise In June

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Just a thought: what if the 'CPI' continues to show inflation at 2% rate so that MPC keeps interest rates low for the foreseeable future? At the same time, we will feel the pinch from tax and energy rises and 'real' inflation not measured by CPI. Do you think this is a possibility? The hold decision at June worries me that it could be.

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Just a thought: what if the 'CPI' continues to show inflation at 2% rate so that MPC keeps interest rates low for the foreseeable future? At the same time, we will feel the pinch from tax and energy rises and 'real' inflation not measured by CPI. Do you think this is a possibility? The hold decision at June worries me that it could be.

STAGFLATION. A lifetime of it perhaps. If the CPI figure was absolutely fudged, house prices could stay where they are and everything else would rise in cost to equal the long-term relationships between "the cost of living", wages and house prices.

Could happen. The BoE would like it to.

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STAGFLATION. A lifetime of it perhaps. If the CPI figure was absolutely fudged, house prices could stay where they are and everything else would rise in cost to equal the long-term relationships between "the cost of living", wages and house prices.

Could happen. The BoE would like it to.

If this happens (and this is the part that worries me) would it mean that:

(a) Debt-ridden homeowners will have a repreive from high interest rates AND inflation eating away their debt?

(B) Those holding cash deposits for a house be f*cked over as the value of their cash erodes through inflation?

As a potential FTB, I'm wondering which is most risky: buying a house and getting HPC/-ve equity. Or waiting it out and seeing my deposit erode. Or what are the other alternatives? Gold and commodities already seem very high.

Edited by Charles_Darke

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If this happens (and this is the part that worries me) would it mean that:

(a) Debt-ridden homeowners will have a repreive from high interest rates AND inflation eating away their debt?

(B) Those holding cash deposits for a house be f*cked over as the value of their cash erodes through inflation?

As a potential FTB, I'm wondering which is most risky: buying a house and getting HPC/-ve equity. Or waiting it out and seeing my deposit erode. Or what are the other alternatives? Gold and commodities already seem very high.

Your cash deposit woild not erode relative to earnings so long as the interest earned was at least equal to typical annual wage increases. As these are generally tied to RPI, your money would lose value in terms of what it could buy, but retain its value relative to pay, perhaps more important in this context.

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STAGFLATION. A lifetime of it perhaps. If the CPI figure was absolutely fudged, house prices could stay where they are and everything else would rise in cost to equal the long-term relationships between "the cost of living", wages and house prices.

Could happen. The BoE would like it to.

Except, wage rises would stay low, house prices would stay the same or drop, and everything (or the things that count) would increase in cost at a much higher rate.

Stagflation. That is where we are now isnt it.

It seems to me though that "cost of living" will end up being the deciding factor even if interest rates are not.

WAGE - COST OF LIVING = AVAILABLE MONEY LEFT OVER TO SERVICE MORTGAGE

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Your cash deposit woild not erode relative to earnings so long as the interest earned was at least equal to typical annual wage increases. As these are generally tied to RPI, your money would lose value in terms of what it could buy, but retain its value relative to pay, perhaps more important in this context.

But if interest remains low, then existing cash would erode in value.

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But if interest remains low, then existing cash would erode in value.

Yes, if RPI remains below actual inflation because of fiddled figures, the value of cash erodes in terms of goods etc. it will buy. Wages will get similarly eroded if pay settlements track RPI. The value of somebody's savings would therefore remain broadly in line with the value of wages so long as savings interest was roughly equal to wage increases.

So, with respect to HPI, if you are hoping/expecting HPs to fall back towards a 'normal' HP/wage multiple, your savings would retain their value. It could be claimed that fiddled RPI, because it erodes the value of peoples' incomes, will to some degree accelerate any HPC once credit dries up, as deflating real incomes will have a similar effect to rising IRs.

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Just a thought: what if the 'CPI' continues to show inflation at 2% rate so that MPC keeps interest rates low for the foreseeable future? At the same time, we will feel the pinch from tax and energy rises and 'real' inflation not measured by CPI. Do you think this is a possibility? The hold decision at June worries me that it could be.

I don't really think this is a possibility. Why?

Its a fact now that all major central banks (apart from the UK) have been/are raising their interest rates to combat inflation

If they continue to do this then the interest rate differential with the UK will increase

Imported goods will cost more leading to a rise in inflation. If the UK does not increase interest rates then the pound would collapse leading to further inflation.

Edited by alexays

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Yes, talking of inflation I got my Npower bill today and it's completely ruined my weekend now! £174 for TWO months worth, dated from 31st March to 7th June - that's not even a Quarter!

Me and the missus rent a two bed newish build flat and we haven't even used the heating much at least not for a good month at least (we don't have gas) so I thought there was some mistake with the calculations but no, I went through last quarters bill and this months and it seems correct. I usually call them with the correct meter readings every month so I know we're on top of payments.

I just can't understand why it's so high, and my sister was also in tears because of her high bill, coincidentally with Npower.

2% inflation, yeah ok, we believe you Gordy - i'm wondering if i'll need to take a bank loan out for this coming winter bill.

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I don't really think this is a possibility. Why?

Its a fact now that all major central banks (apart from the UK) have been/are raising their interest rates to combat inflation

If they continue to do this then the interest rate differential with the UK will increase

Imported goods will cost more leading to a rise in inflation. If the UK does not increase interest rates then the pound would collapse leading to further inflation.

Yep.

World interest rates are going up and it all looks good for HPC at the moment, with Bernanke taking a Hawkish tone, meaning that US rates could be headed up to 6%.

Add to that Japan about to remove free money and we have the parties very bad hangover starting to bite.

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unfortunately for mr brown and the boe they cannot inflate their way out of this. if the markets get wind that they are happy to let inflation take hold in the uk, the pound will drop like a stone.

if that happens just buy euros or dollars .( remember last time during the 60s and 70s that was not possible) and the value ofyour money will remain safe.

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It doesnt take a miracle mind to understand that the Labour Party have been fiddling the figures on just about anything.

Banking is Global, it has always been that way but in the much mooted world of Globalisation ever more so today than ever before.

It is a very foolish Country that decides that it will not participate in the worlds economic cycles, nobody is immune.

Gordon Brown is absolutely bricking it, the so called independent Bank of England everday becomes more and more obviously not independent. The Labour Party are pulling the strings, and have been from day 1.

I think everybody should understand 2 simple things.

1. There is no such thing as a miracle economy, this country is deeply in debt, holding debts that it is very unlikely to be in a position to pay off in the future. This debt has been created simply by putting millions of unproductive people into public services, when the money dries up Job Losses will be massive!!.

2. Interest rates are Global, when the rates in the UK are uneconomic in comparison to the wider world then investment leaves our shores and heads off to the sun where it can earn a decent return.

This countrys economy is fuelled simply on debt, whilst real living standard paying jobs are being lost each and every day in their thousands, to be replaced with jobs that require subsidies via tax credits and the various devices setup by the Labour Party to redistribute the proceeds of hard work by the few to the masses of unskilled, uneducated simpletons created by the Labour Party over what is nearly a decade of Champagne Socialism.

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It doesnt take a miracle mind to understand that the Labour Party have been fiddling the figures on just about anything.

Banking is Global, it has always been that way but in the much mooted world of Globalisation ever more so today than ever before.

It is a very foolish Country that decides that it will not participate in the worlds economic cycles, nobody is immune.

Gordon Brown is absolutely bricking it, the so called independent Bank of England everday becomes more and more obviously not independent. The Labour Party are pulling the strings, and have been from day 1.

I think everybody should understand 2 simple things.

1. There is no such thing as a miracle economy, this country is deeply in debt, holding debts that it is very unlikely to be in a position to pay off in the future. This debt has been created simply by putting millions of unproductive people into public services, when the money dries up Job Losses will be massive!!.

2. Interest rates are Global, when the rates in the UK are uneconomic in comparison to the wider world then investment leaves our shores and heads off to the sun where it can earn a decent return.

This countrys economy is fuelled simply on debt, whilst real living standard paying jobs are being lost each and every day in their thousands, to be replaced with jobs that require subsidies via tax credits and the various devices setup by the Labour Party to redistribute the proceeds of hard work by the few to the masses of unskilled, uneducated simpletons created by the Labour Party over what is nearly a decade of Champagne Socialism.

Nice post.

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Yes, talking of inflation I got my Npower bill today and it's completely ruined my weekend now! £174 for TWO months worth, dated from 31st March to 7th June - that's not even a Quarter!

Me and the missus rent a two bed newish build flat and we haven't even used the heating much at least not for a good month at least (we don't have gas) so I thought there was some mistake with the calculations but no, I went through last quarters bill and this months and it seems correct. I usually call them with the correct meter readings every month so I know we're on top of payments.

I just can't understand why it's so high, and my sister was also in tears because of her high bill, coincidentally with Npower.

2% inflation, yeah ok, we believe you Gordy - i'm wondering if i'll need to take a bank loan out for this coming winter bill.

WTF do you have in your two bedroomed flat ??

Are you using a tumble dryer constantly or something ?

My leccy bill for last qtr to mid May was £77 quid and thats for a 3 bed semi house, also with NPower.

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Interest rates are Global, when the rates in the UK are uneconomic in comparison to the wider world then investment leaves our shores and heads off to the sun where it can earn a decent return.

Now that is a simple economic truth that every bull on here should learn and learn well

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WTF do you have in your two bedroomed flat ??

Are you using a tumble dryer constantly or something ?

My leccy bill for last qtr to mid May was £77 quid and thats for a 3 bed semi house, also with NPower.

Short of putting an 80gig h/drive in my PC and using my PS2 even less I fail to understand why the bill is so large hence my anticipation for Monday morning to sort it out. I know energy prices were rising quite a lot but approx 80% over last years bill (and thats being conservative) considering it's only based on two months too has me slightly worried to be honest - i'm not the only one as I checked the moneysavingexpert site and there seems to be another person on there with an excessive Npower bill. (yes i've only found one person but something seems dodgy eh?)

Anyway Imupnorth, we don't even use the dishwasher (that's me) let alone the tumble dryer and I don't leave anything on standby overnight, always boil what I need in the kettle and hardly iron anything as i'm too lazy as my missus reminds me

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When.co.uk

Your bill is for two months, have you just moved into the property in the last two months?.

Did you read the meter when you moved in, previous tennants and Landlords are prone to giving false readings that the next tennant ends up paying if they overlook the meter reading. Never accept the Landlords or Agents readings, check them off yourself when you move in!!!.

Another reason is that the bill may be estimated, many of todays bills are. Just ring the company with the meter reading and tell them to send a correct bill.

In the UK you have 12months to correctly invoice someone, if after 12months you have not invoiced correctly then the debt is written off. I managed to do a surveyor who tried to turn me over, out of 5k as he invoiced another member of my family by mistake for 12months. On the thirteenth month I telephoned him to advise him of his error and he was spitting blood :-)

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2. Interest rates are Global, when the rates in the UK are uneconomic in comparison to the wider world then investment leaves our shores and heads off to the sun where it can earn a decent return.

But then Japan has managed to have super-low rates for a long time which shows that this is possible.

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Yes, talking of inflation I got my Npower bill today and it's completely ruined my weekend now! £174 for TWO months worth, dated from 31st March to 7th June - that's not even a Quarter!

Me and the missus rent a two bed newish build flat and we haven't even used the heating much at least not for a good month at least (we don't have gas) so I thought there was some mistake with the calculations but no, I went through last quarters bill and this months and it seems correct. I usually call them with the correct meter readings every month so I know we're on top of payments.

I just can't understand why it's so high, and my sister was also in tears because of her high bill, coincidentally with Npower.

2% inflation, yeah ok, we believe you Gordy - i'm wondering if i'll need to take a bank loan out for this coming winter bill.

Have you got your boiler on during the day by any chance?

I rent a modern 2-bed house with electric only and in one month I used 214 units during the day and 254 at night. That comes in at £33pm and with you having a flat I don't believe your bill should be quite as high as ours here.

You're right when you say something isn't right. What's your ratio of day-night use??

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Have you got your boiler on during the day by any chance?

I rent a modern 2-bed house with electric only and in one month I used 214 units during the day and 254 at night. That comes in at £33pm and with you having a flat I don't believe your bill should be quite as high as ours here.

You're right when you say something isn't right. What's your ratio of day-night use??

Take a meter reading. When I moved into my current flat, the meter read around £5,000 over the actual reading. The scary thing is that the past tenants had paid this :o

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  • 301 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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