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Cpi Headed Towards 5%?

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http://www.guardian.co.uk/business/2008/ju...ation.economics

"CPI inflation is heading for 5% plus late this year," said Michael Saunders at Citi. "The monetary policy committee are unlikely to cut near term with such high inflation even though the UK may be slipping into recession. If the economy was not so weak, they would be hiking."

George Buckley of Deutsche Bank said: "It is worth bearing in mind that this is not an across-the-board rise in inflation relative to our forecasts - the three key upside surprises were food, communication and recreation. All that said, a breach of 4% seems almost inevitable; questions will now be asked if 5% could be reached."

Alan Clarke of BNP Paribas said: "The peak in inflation is now looking like close to 5.5%. Week after week the peak keeps getting shifted higher, before too long we are going to be talking about inflation with a 6% handle. After a couple of weeks of the market backing away from rate hike expectations the question of whether the MPC will hike interest rates is very much back on the agenda."

Geoffrey Dicks at Royal Bank of Scotland said: "Yet again CPI inflation surprised on the upside. It is all very depressing; nothing, it seems, is preventing the wall of costs finding its way into the CPI. By the time we have had another round of gas and electricity price hikes, we may well be looking at a (near) 5% peak."

bcngraph.jpg

The miracle economy

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Err hello.

There was a recession last time around, however politically damaging it was at least eventually the then incumbents had the guts to fend off inflation before far worse damage was caused.

Unlike Mervo, Gordon's football brained sidekick clown.

You could hardly believe an "independent" Bankrupt of England could be so financially Bankrupt.

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Annual CPI might reach 5% as early as next month due to a large drop in the CPI in July 2007 - it would only take a 0.7 monthly rise (same as for June)

If so the pressure to raise rates must surely become irresistible

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Annual CPI might reach 5% as early as next month due to a large drop in the CPI in July 2007 - it would only take a 0.7 monthly rise (same as for June)

If so the pressure to raise rates must surely become irresistible

The BoE can't raise interest rates, as some plonker has lent out too much money, push rates too high and far too many people can't pay the mortgage back the banks go bust. Mystic Merv has no options, he's screwed like the rest of us.

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The BoE can't raise interest rates, as some plonker has lent out too much money, push rates too high and far too many people can't pay the mortgage back the banks go bust. Mystic Merv has no options, he's screwed like the rest of us.

He might as well raise them. Even if he doesn't, the banks will.

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Guest Mr Parry
That's going to f*ck up the rises for pensioners.

Pensions will basically be worth nothing. The UK will have to adopt the Asian way, where the young look after the old . . .

Oh, no, that's right, the young are so taxed to death they can't afford to . . .

This is the bit where West meets East on the purchasing power scale.

Good luck!

Should have kept innovating and making things rather than pushing bits of paper around and talking sh1te.

Edited by Mr Parry

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Pensions will basically be worth nothing. The UK will have to adopt the Asian way, where the young look after the old . . .

Oh, no, that's right, the young are so taxed to death they can't afford too . . .

This is the bit where West meets East on the purchasing power scale.

Good luck!

Mr Parry, by then the current architects of this mess will be long gone with their £4m pension pot and their ex-mp pensions.

But you are right. There is no way in hell pensions are going to make up for the inflation shortfall if this carries on much longer.

All those who think inflation will save them are frankly clueless. It won't it will trash the economy at every level (apart from the very top fractions of a percent).

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Should have kept innovating and making things rather than pushing bits of paper around and talking sh1te.

This is surely the best comment I think I have seen on these forums. Well said.

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Guest Mr Parry
Mr Parry, by then the current architects of this mess will be long gone with their £4m pension pot and their ex-mp pensions.

But you are right. There is no way in hell pensions are going to make up for the inflation shortfall if this carries on much longer.

All those who think inflation will save them are frankly clueless. It won't it will trash the economy at every level (apart from the very top fractions of a percent).

I cannot express how angry I am, today. Maybe tomorrow.

Think I'm going to move dear old mother to Thailand where on £80 a week one can at least feed one's self.

RRRRRRAAAAAAAAAAAAAAAAARRRRRRRRRRRRRRRAAAAAAAAAAAAAAA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Pensions will basically be worth nothing. The UK will have to adopt the Asian way, where the young look after the old . . .

Oh, no, that's right, the young are so taxed to death they can't afford to . . .

This is the bit where West meets East on the purchasing power scale.

Good luck!

Should have kept innovating and making things rather than pushing bits of paper around and talking sh1te.

My friends, Mr Parry has just summed up the UK economy in his last sentence. I`d just add one thing - "pushing bits of paper around, buying and selling houses and talking sh1te".

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Pensions will basically be worth nothing. The UK will have to adopt the Asian way, where the young look after the old . . .

Oh, no, that's right, the young are so taxed to death they can't afford to . . .

This is the bit where West meets East on the purchasing power scale.

Good luck!

Should have kept innovating and making things rather than pushing bits of paper around and talking sh1te.

:lol::lol:

The banks would say they HAVE been innovating over the past decade (or is that them just talking sh1te)??

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Guest Mr Parry
:lol::lol:

The banks would say they HAVE been innovating over the past decade (or is that them just talking sh1te)??

When Mr Parry finally becomes El Presidente for Life, these 'people' will find themselves pulling a plough, sans oxon.

RRRRRRRRRRRRRRRAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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That's going to f*ck up the rises for pensioners.

State and cvil service pensions are calculated (stand to be corrrected) on the CPI (or RPI?) in September of each year. So if it does peak about then the rises in 4/09 will put more strain on the treasury's purse.

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The BoE can't raise interest rates, as some plonker has lent out too much money, push rates too high and far too many people can't pay the mortgage back the banks go bust. Mystic Merv has no options, he's screwed like the rest of us.

I agree. But what would you do?

I have a simple plan:

1) Get the FSA to tell the banks to get a shedload of cash ready.

2) lower IRs (from 5.75% to say 5%)

3) The banks increase their lending rates, whilst their borrowing rates (from the BOE) have dropped, so the banks start building up loads of cash.

4) Give the banks £50B in printed money, as some extra cash.

5) Raise interest rates back up to their pre-credit bubble history (so 12%) , in increments of course.

6) Borrowers go bust

7) Banks write off loses from their huge wads of cash

I actually think we are in the calm before the storm. The BOE & the FSA are getting the banks ready....

at least thats what I would do...

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Guest Mr Parry
I agree. But what would you do?

I have a simple plan:

1) Get the FSA to tell the banks to get a shedload of cash ready.

2) lower IRs (from 5.75% to say 5%)

3) The banks increase their lending rates, whilst their borrowing rates (from the BOE) have dropped, so the banks start building up loads of cash.

4) Give the banks £50B in printed money, as some extra cash.

5) Raise interest rates back up to their pre-credit bubble history (so 12%) , in increments of course.

6) Borrowers go bust

7) Banks write off loses from their huge wads of cash

I actually think we are in the calm before the storm. The BOE & the FSA are getting the banks ready....

at least thats what I would do...

Calm before storm. Yes I believe so.

I think the pre-boom 50 year average for rates was around 7.5%.

LIBOR. That's what controls it now though.

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My salary (like many others) is calculated from RPI in October.

Based on previous recessions, I think inflation will peak early next year, and will be much more than 5% - I don't think 7.5% is out of the question.

The BoE is screwed, but then in retrospect their decisions since 2000 have been pretty terrible for the economy :lol: .

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My salary (like many others) is calculated from RPI in October.

Based on previous recessions, I think inflation will peak early next year, and will be much more than 5% - I don't think 7.5% is out of the question.

The BoE is screwed, but then in retrospect their decisions since 2000 have been pretty terrible for the economy :lol: .

I think I will struggle to get a pay rise this year, cash flow struggling. But I get some relief and a nice grin every time RPI goes up, this month to 4.6%. Becasue like many other STR on here I hedged the max £30k of my STR fund before March on the "old" NS&I index linked RPI+1.35%. So getting 5.95% return tax free and have HPI dropping even faster than my total STR fund is growing is keeping the recession worries at bay.

And I insured 75% of my take home pay for £30 p/m in 2006 with AntInsurance off MSE. So If I lose my job I can take 12 months getting another while still making overall future net gains with HPI drops. And with a six figure STR fund to tap into if I cant get any job I feel worryless about a recession.

Mind you the AntInsurance rates have soured now they might have to pay out in the next few years. So im, glad I got in in 2006.

M

Edited by markyh

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  • 399 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% +
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      • Even
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      • up 5%



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