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Accelerating.

http://www.thisismoney.co.uk/news/article....mp;in_page_id=2

Record factory prices stoke inflation fears

Evening Standard

1 June 2007, 4:43PM

The Bank of England was given a nasty shock today as manufacturers put up prices at the fastest rate this decade.

....

http://www.morningadvertiser.co.uk/news_de...articleid=35926

Beer inflation highest since 2004

01/06/2007 15:21

A pint of coins

On-trade beer price inflation is the highest since 2004, according to CGA figures produced by Dresdner Kleinwort.

Managed pub operators continue to drive through meaningful beer price rises ahead of the smoking ban, the bank noted.

Wetherspoon (JDW) and Mitchells & Butlers (M&B) pushed through the highest increases of 8.4% and 4.1% year-on-year respectively in the first quarter of 2007. Overall, the latest drink price data indicates on-trade beer price rises of 3.6% up from 2.3% in last quarter of 2006.

In the first quarter of this year, standard lager is up 3.4%, premium lager up 4% and standard bitter 3.9%.

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6% next week anyone?

in the first report that was the figure looked at for the end of 2007

they'll just keep raising the thing .25 and inflation will continue to rise as people laugh and mew to live - most people i know have fixed rates anyway

6% is still pretty low

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in the first report that was the figure looked at for the end of 2007

they'll just keep raising the thing .25 and inflation will continue to rise as people laugh and mew to live - most people i know have fixed rates anyway

6% is still pretty low

They'll eventually run out of ceiling room to mew, the fixed rates will be reset and life will pretty dull when the most of their money is going to pay for things they bought when they were rich. :(

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And when wages don't keep pace with the cost of living, something has to give... When the 5 year fixed rates of 2003 give way by 2008, people will have to spend more on mortgage payments but the effects aren't nearly as pronounced as you might expect. Somebody who took out a repayment loan of £100k in 2003 on a five year fix of 3.99 will be moving to a rate that is (worst case) nearer 6% - that's nearly a 50% increase in interest payments. So interest only they go from £333 to £500 p/month. Although this is a significant increase, the calculation below shows that it should be more than covered by inflationary increases in salary, assuming a modest 4% salary growth per year since the mortgage was taken out. The ones to be more wary of are the even bigger loans and the ones where you get a cheap fix for a few years and then you're locked in to the standard variable rate (7.5% +) for several years after.

So for someone who took out a £100k mortgage in 2003 and has had an average salary increase of 4% per annum starting at 28k in 2003.

Year Salary Take home

2003 £28,000 £1729

2004 £29,120 -

2005 £30,284 -

2006 £31,496 -

2007 £32,756 £1995

difference of £266 - more than covers the switching of rates from fixed 3.99 to 6%.

I think people on here underestimate the effects of inflation on salary and the comensurate increase in salary in the space of just 5 years. The thing that will stop the market in its tracks is affordability for first time buyers - this is already stretched to the limit. The market is fed from the bottom and if nothing is coming up from the bottom, the whole thing will topple over and revert to its long term mean.

Edited by BarrelShifter

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Radio 2 today - Scotland - a landlord sells beer at 45p pint IIRC.

Interesting statement when given govt stats.

Propaganda.

Just looking for media / govt coincidences and anomalies.

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Although this is a significant increase, the calculation below shows that it should be more than covered by inflationary increases in salary, assuming a modest 4% salary growth per year since the mortgage was taken out.

That ignores the loss of purchasing power in an inflationary environment where cost pressures are beginning to filter through, not to mention utilities.

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That ignores the loss of purchasing power in an inflationary environment where cost pressures are beginning to filter through, not to mention utilities.

Not only that. I heard the average house is around £180,000, but the average income around £22,000. That makes the whole thing look less comfy.

Heard of a friend of a friend who got his rate adjusted and pays now 400 a month more. There is talk of replacing the BMW by a smaller car.

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And when wages don't keep pace with the cost of living, something has to give... When the 5 year fixed rates of 2003 give way by 2008, people will have to spend more on mortgage payments but the effects aren't nearly as pronounced as you might expect. Somebody who took out a repayment loan of £100k in 2003 on a five year fix of 3.99 will be moving to a rate that is (worst case) nearer 6% - that's nearly a 50% increase in interest payments. So interest only they go from £333 to £500 p/month. Although this is a significant increase, the calculation below shows that it should be more than covered by inflationary increases in salary, assuming a modest 4% salary growth per year since the mortgage was taken out. The ones to be more wary of are the even bigger loans and the ones where you get a cheap fix for a few years and then you're locked in to the standard variable rate (7.5% +) for several years after.

So for someone who took out a £100k mortgage in 2003 and has had an average salary increase of 4% per annum starting at 28k in 2003.

Year Salary Take home

2003 £28,000 £1729

2004 £29,120 -

2005 £30,284 -

2006 £31,496 -

2007 £32,756 £1995

difference of £266 - more than covers the switching of rates from fixed 3.99 to 6%.

I think people on here underestimate the effects of inflation on salary and the comensurate increase in salary in the space of just 5 years. The thing that will stop the market in its tracks is affordability for first time buyers - this is already stretched to the limit. The market is fed from the bottom and if nothing is coming up from the bottom, the whole thing will topple over and revert to its long term mean.

what you forgot was higher council taxes, increase service charges, higher cost of main land travel, higher cost of food, higher cost of energy, when you all that 266 doesnt really cover it all.

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