Prices rising much faster than inflation!

[DimPrawn]

Can't wait for interest rates to start ticking up

They said that in Japan in the 1990's....

[Ticktock]

Perhaps I can release all that lovely free money and afford my train fare next year?

Rail fares to rise by up to 9.1 per cent - Telegraph

What a misleading headline. Sure it says "up to" to cover themselves, but still.
Rail fares are allowed to rise by 1% over inflation, so up to 4.1%. Labour are saying that they could rise by up to 9.1% on some lines. Howver, firstly this is the theoretical maximum rise allowed, and to go anywhere above the 4.1% on one fare must be balanced by a reduction on another.

Unfortunately, yes, I suspect that some train companies will try to put a big hit in place on peak fares, and balance this with a lower rise / fall on a rarely used fare. Either that, or they'll just extend the peak hours to run from 04:00 - 12:00 and then from 13:00 - 23:00...

[Lockhouse]

I'm an experienced BTL-er. I sold up a few years ago at more or less the right time and was looking to return to the market at some stage.

Anyway I must have done the sums for 50 properties over the past two weeks (price, fees, duty, P&L, yield, rates, rent, voids, repairs, tax - everything in my whizzy spreadsheet) and I can't make the sums work. Or rather I can make the sums work but the amount of profit is so minimal as to make it not worth the hassle. So here's me, with a seriously sized deposit, thinking "nope, this is not going to make me any money at the moment". It looks to me like there are lots of amateurs piling in, mortgage advisors and banks are ripping them off with fees and high rates and the Government is propping the whole FTB market up with the deposit scheme. I'm not normally a property nay-sayer but this is just more of the same late noughties bubble resuming after a brief respite. Rather than slowly up interest rates after a slow descent of the currency using QE, the Government of the day opt for short term gain and kicking the can down the road a bit. It will end in tears.

It's slow and expensive to get into, slow and expensive to get out of, the profit is minimal (at the moment) and lots of hassle in the middle. For that reason, I'm out.

[xoggoth]

Inflation is a bit worrying for us old retired farts with some of our pension fixed but it is a bit reassuring when some of it is stuff we don't need to spend on, don't care about house prices, train fares, clothes or even petrol that much. Why don't they publish a whole myriad of different inflation figures for different sorts of items? Then we could use an app or Excel sheet to calculate our personal inflation rate.

[AtW]

They said that in Japan in the 1990's....

The property there crashed and did not inflate so quickly, which means truly brave actions of BoE and HMG prevented Japanese scenario - now rents will start climbing up, excellent job Osborne

[OwlHoot]

I wonder if in the height of the recession they considered taking the opportunity to abolish copper coinage, as a way to stimulate a bit of constructive inflation.

I imagine it would tend to push prices up (although prices including 99p might have to be reduced to 95p which would push the price down so it's hard to know which tendency would prevail).

Also there might be legal problems with presenting or cashing cheques for an amount not a multiple of 5p, unless it was ordained that the amount should always be rounded down.

But it would save the government a fair bit minting and transporting millions of tons of crappy copper-plated steel coins, which are now worth practically nothing and wear holes in peoples' pockets!

[BrilloPad]

constructive inflation.

What is the difference between constructive and destructive deflation?

[sasguru]

What is the difference between constructive and destructive deflation?

Destructive inflation: you need a wheelbarrow of cash to buy a potato.
Constructive inflation: your thousands in debt are whittled away in a year.

[BrilloPad]

Destructive inflation: you need a wheelbarrow of cash to buy a potato.
Constructive inflation: your thousands in debt are whittled away in a year.

Constructive inflation - great if you are working - not so good if you are retired.

And I think the government will consider destructive inflation to be constructive - imagine paying off £375bn QE with a potato.

One day the population will realize that there is no point in saving and you should borrow to the max. At that point the game will be up. I just hope I don't live to see it.

Feel free to call me a cretin without entering into any sort of debate - constructive or destructive.