13% inflation

[d000hg]

Apparently as well as rising interest rates and recession, inflation will exceed 13%.

So this means anything I'm considering buying, I should do so now rather than later to save money. But buying increases demand, which puts pressure on supply, which forces prices up, sustaining inflation.
On the other hand isn't the normal rhetoric that we're supposed to spend our way out of recession; hoarding our savings reduces economic growth and prolongs the recession?

What is the correct response then? Spend or save?

[Fraidycat]

Look for good investments.
If you cant find any, keep your powder dry, keep your cash safe..

[jamesbrown]

correct response

Correct how?

The correct response for dying with lots of money is to never spend any.

The state of the economy really makes no difference to my spending habits. YMMV.

[NotAllThere]

Look for good investments.
If you cant find any, keep your powder dry, keep your cash safe..

And lose 13% of its value per annum. Great advice.

[tazdevil]

And lose 13% of its value per annum. Great advice.

Minus 1 or 2% interest Still if firms are going bust you could lose your capital in stocks and shares Not going to be a pretty picture in the short term

[xoggoth]

Look for good investments

Got lot of spare cash. Been investing in dribs and drabs relying on articles I've read in papers, spreading around, not too much on one thing. Lucky so far, all shares I've brought in last few months are up, some by over 14%.

[d000hg]

Correct how?

In the sense of what behaviour from the population would make it better and what would make it worse, not your personal habits. In a recession you get a vicious spiral that people stop spending which means the economy suffers which means people have even less to spend...

[d000hg]

And lose 13% of its value per annum. Great advice.

Obviously, bitcoin is the answer

[jamesbrown]

In the sense of what behaviour from the population would make it better and what would make it worse, not your personal habits. In a recession you get a vicious spiral that people stop spending which means the economy suffers which means people have even less to spend...

Better or worse for whom? There are massive differential impacts from low growth and from high inflation. That said, the cause of this inflation is still primarily an external energy (specifically, gas) price shock, which will eventually dissipate. Recessions are always a bigger risk in the medium-term because they translate into higher unemployment, but the BoE is seemingly not too bothered about this as the current labour market is tight and/or sees a bigger risk of a longer recession from embedded inflation that extends beyond energy, mainly to wages.

Overall, spending makes sense if you want higher growth and to avert a recession and prices will continue to rise anyway, as long as there is an external energy price shock. In all scenarios, people with low disposable income that is mainly spent on food and energy are stuffed this winter and the gov’t will have to intervene bigly, yet again. After which, there is probably a half-decent chance on an early election.

[Paddy]

Apparently as well as rising interest rates and recession, inflation will exceed 13%.

So this means anything I'm considering buying, I should do so now rather than later to save money. But buying increases demand, which puts pressure on supply, which forces prices up, sustaining inflation.
On the other hand isn't the normal rhetoric that we're supposed to spend our way out of recession; hoarding our savings reduces economic growth and prolongs the recession?

What is the correct response then? Spend or save?

When the government use cake decorations as an example for reduced prices then the true inflation rate is more like 23%