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Guest absolutezero

Bbc Inflation Calculator

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The calculator was developed by the Office for National Statistics (ONS).

... Which explains how the calculator produces a figure of 6.9% when in reality I am experiencing 20%+ inflation. Yet another BBC-supported government fiddle to make it look like unaffordability isn't increasing as quickly as it really is.

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its funny how everyone with supposed 20% inflation has nothing to back their figures up with. sure SOME things are rising by 20%, but others are dropping and lots are stagnent. so. average around 5%.

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I don't know my expenditure figures any more:

These days my financial circumstances are stress-free to the extent that I don't think about them.

I suspect that's bad of me.

Does that mean that I'm no longer allowed to consider myself financially astute?? :o

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Anyway, whatever my personal "inflation" figure is, it's totally meaningless:

I live frugally in a small rented property, with no taste for going out, holidays, posh clothes, cars... I have a large pot of savings / investments, and over the next decade, only a small proportion of my assets is going to be spent on living expenses.

Most will be spent on a house.

Since house prices are falling and this accounts for where most of my assets will be spent, I consider my personal inflation rate to be about -10%.

Edit: I see I'm the only person who has voted less than zero!

Edited by Selling up

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It's worth lokoing at a simplistic example to see why relatively small increases have such an effect on your spending power.

Let's say you are relatively average, and spend around 75% of your salary left on paying all your house bills, rent, car bills, insurance, council tax, phone bills, tv and internet bills, etc.

You might even be quite prudent, and save 5% into a savings fund, or just let it increase your bank balance (yes, I know - fairly unreal for most of the population!)

Anyway, this leaves you you get to spend on the things that you want to spend it on - hobbies, meals, cinema, alcohol, fags, holidays.

Now, the government comes along and stings you with a 5% inflation. Average. That's maybe 8% inflation on the things you need, and maybe 1% on the "luxury" items.

So, where does that leave you?

your "essentials" bill has now increased from 75% of your salary to 75*1.08 = 81%. The 20% you spent on your luxuries has now only gone up 1%, to 20.2%. You are now spending 101% of your salary on stuff that before only cost you 95% of your salary. Plus, you're not increasing that bank balance either - previously you were saving 5% of it.

To get back to saving what you were saving, you actually have to rein back 6% of your spending, but you can't do that with the essentials - it has to come out of your discretionary spending.

So, you are now only spending around 15% of your salary on the "luxury" items - a reduction of 25%, for an inflation rate of around 5%.

The figures get worse the higher the proportion of your salary you spend on the essentials (i.e. for the poorer in society).

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Less than 0%.

Never mind the BBC site. The reality is that housing costs dominate so overwhelmingly over everything else, that things are only getting better for anyone who doesn't own property.

Or rather, we're reclaiming a little of our money that was thrown at far richer people over the past decade or so.

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5.4%

Which puts me in the middle of the most popular group so far but still over .5% above the official figure.

Maybe this is my average but what troubles me is the number of things that you see jumping by 20+%.

And they are normally the things where a choice is denied, like car park charges etc.

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  • 336 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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