Reply to: UK inflation rate rises to 3.4%

[shaunbhoy]

INFLATION NATION UK

Per cent increase over the last year

Petrol & diesel 24.6
Air fares 10.8
Second-hand cars 15.7
New cars 5.2
Gardens, plants & flowers 6.1
Package holidays 6
Health insurance 10
Cars & holiday insurance 21.3
Fruit 8.6
Heating oil 43.5
Rail tickets 8.3
Stamps & postal services 9.6
Coffee, tea and cocoa 6.6
Tobacco 6.5
Stationery & drawing materials 7.4
Jewellery, clocks & watches 5.3

So..............3.4% it is then.........following the NL seasonal adjustments!

[DimPrawn]

INFLATION NATION UK

Per cent increase over the last year

Petrol & diesel 24.6
Air fares 10.8
Second-hand cars 15.7
New cars 5.2
Gardens, plants & flowers 6.1
Package holidays 6
Health insurance 10
Cars & holiday insurance 21.3
Fruit 8.6
Heating oil 43.5
Rail tickets 8.3
Stamps & postal services 9.6
Coffee, tea and cocoa 6.6
Tobacco 6.5
Stationery & drawing materials 7.4
Jewellery, clocks & watches 5.3

[TimberWolf]

don't forget the sterling (haha) performance of GBP!

inflation +3.4%, savings at 1% = -2.4% + currency going down at 10% a year.

And that the real rate of inflation is probably closer to double the official rate. And what about time lag, is that built in to them, i.e. with inflation reported some time after the event and index linked certificates indices updated later still.

[bobhope]

don't forget the sterling (haha) performance of GBP!

inflation +3.4%, savings at 1% = -2.4% + currency going down at 10% a year.

[lje]

Well I'm pleased that inflation is going up. Got lots of my savings in Savings Certificates from NS&I which earn RPI + 1%, so 5.4% right now (and tax free too)!

[d000hg]

But if interest rates are 10% and inflation is 20% then in only three years you lose a quarter of the real value of your money and in eight years you lose half.

But those managing on loans will be double-screwed, and the savers 'win'.

[Gonzo]

If interest rates AND inflation both jump up to about 15% then those with savings will finally be the ones who win, rather than suffering while those in debt are looked after.

But if interest rates are 10% and inflation is 20% then in only three years you lose a quarter of the real value of your money and in eight years you lose half.

[TimberWolf]

So, I choose not to lend you a tenner. Simples.

That's what a lot of savers are choosing to do, by buy buying assets, gold etc. Money in the bank is money lost. It's a new economic paradigm where savers pay borrowers.

[Platypus]

Lend me a tenner and I'll pay you back £9 in real terms. Good deal for you eh.

So, I choose not to lend you a tenner. Simples.

[TimberWolf]

Quite so. And in return, the 'lending savers' take no risk. Yet they whine when they make a small return. When they DO take some risk (e.g. Icesave) they whine when they lose their money, so much so that the govt bails them out.

Lend me a tenner and I'll pay you back £9 in real terms. Good deal for you eh.

[Platypus]

'Savers' are actually 'lenders'. They lend their money to the bank, who then lend it on at a rate of interest, keep a margin for themselves and then hand some interest to those who have lent them money, 'savers'.

Quite so. And in return, the 'lending savers' take no risk. Yet they whine when they make a small return. When they DO take some risk (e.g. Icesave) they whine when they lose their money, so much so that the govt bails them out.

In practice, the bankers take the money and put it in a system with all the clarity and reliability of mystic meg, buy a couple of ferraris and then lose all the money and ask Gordon for some more.

Nicely put!

[Mich the Tester]

I'm genuinely baffled by the assumption that "savers" are somehow entitled to earn money on their savings. If you don't like the rate you're being offered, go elsewhere.

'Savers' are actually 'lenders'. They lend their money to the bank, who then lend it on at a rate of interest, keep a margin for themselves and then hand some interest to those who have lent them money, 'savers'.

At least, that's the theory. In practice, the bankers take the money and put it in a system with all the clarity and reliability of mystic meg, buy a couple of ferraris and then lose all the money and ask Gordon for some more.

[Platypus]

If interest rates AND inflation both jump up to about 15% then those with savings will finally be the ones who win, rather than suffering while those in debt are looked after.

I'm genuinely baffled by the assumption that "savers" are somehow entitled to earn money on their savings. If you don't like the rate you're being offered, go elsewhere.

[d000hg]

If interest rates AND inflation both jump up to about 15% then those with savings will finally be the ones who win, rather than suffering while those in debt are looked after.

[Mich the Tester]

It is more significant that it looks like the BofE Governor is being allowed to prioritise the stimulus over the inflation target.

It will end in tears.

Inflation was incredibly destructive during the seventies and eighties and getting it under control was incredibly painful but it looks like that lesson has finally been forgotten.

On the other hand, inflating the national debt away will destroy all our savings but it will mean our children and grandchildren will not have that millstone hanging around their necks.

anything worth inheriting