Inflation - 4.8% - ouch.

[anonymous-user]

[redacted]

[Fittster]

Go on, we will use your thread for this latest inflation fail

I guess it can continue until the gilt market says 'No' and if you are/can buy your own gilts via QE that isn't likely to happen.

[IainT]

Is that RPI or CPI?

[paulrockliffe]

Can you get a breakdown of the inflation per-item in the RPI and CPI baskets? It would be interesting to cross reference the things I actually bought (and the amount I spent on them) like food and petrol and clothes, without the figures being distorted by the things I didn't buy like LCD TVs etc.

[Frankeh]

I need to spend my savings, I think. They're just getting eaten away by inflation.

Wait, THAT'S WHAT THE COALITION WANT ME TO DO! It all makes sense now.

[theaxe]

Frankeh said:

I need to spend my savings, I think. They're just getting eaten away by inflation.

Wait, THAT'S WHAT THE COALITION WANT ME TO DO! It all makes sense now.

Don't spend it (on stuff at least), buy gold or some other commodity.

[davemac250]

theaxe said:

Frankeh said:

I need to spend my savings, I think. They're just getting eaten away by inflation.

Wait, THAT'S WHAT THE COALITION WANT ME TO DO! It all makes sense now.

Don't spend it (on stuff at least), buy gold or some other commodity.

Why would you buy gold?

[theaxe]

I'm no expert at this and I know that gold is at an all time high. However if inflation gets out of control I thought that buying commodities was a way to avoid devaluation of assets.

[Frankeh]

The second I buy gold, it will start losing value.
I've almost bought gold since it was at 900. Every time I look at it I think "It can't get any higher" and then it bloody does.

Sods law states that if I were to buy in now, I would lose money.

[davemac250]

Real assets - go food stuffs.

The only thing I can see lifting gold again is if S.A. do force the mines into public ownership.

Mind you like Frankeh I missed out at 900.

[Frankeh]

coyft said:

You'll be saying I missed at $1400 when it hits $1800 later in the year.

Surely it's not even worth that though.
It's just another bubble.

[anonymous-user]

Why (how?) does inflation eat savings? Serious question, not that I have many savings but the few K I've got I'd rather keep...

(Not a financial type, obviously)

[davemac250]

In simple terms.

How many pints will your savings buy today?

How much will your savings grow this month?

How many pints will they buy next month?

Is it less?

Your savings are eroded by inflation.

[paulrockliffe]

Opulent said:

Why (how?) does inflation eat savings? Serious question, not that I have many savings but the few K I've got I'd rather keep...

(Not a financial type, obviously)

Because if your £1000 savings bought you a certain commodity now then in five years time after 5 years of inflation at 10% you'd need £1610.51 to buy it as the price has risen. But your savings have only earned you 1% so you only have £1051.01 in your account. You have more money, but it's worth less.

[Eric Mc]

Inflation makes things more Expensive.
Therefore your money buys less.
Therefore any money you have "put by" is of less value to you when you go to spend it.

[anonymous-user]

Aah, simple but I'd been looking at it the other way round.

Thanks.

[scenario8]

davemac250 said:

In simple terms.

How many pints will your savings buy today?

How much will your savings grow this month?

How many pints will they buy next month?

Is it less?

Your savings are eroded by inflation.

Right, that's it, I'm off to the pub to buy next month's pints. I'm sure Alan (my landlord) will keep them nice and safe behind the bar.

PS Did I just read the BBC being criticised for being pro-Coalition? PH gets stranger by the day.

[fido]

Opulent said:

Aah, simple but I'd been looking at it the other way round.

I think it is the other away round. Each pound is worth less because the BoE is printing away their debts and hoping no one notices and just assumes food, petrol, stuff is becoming more expensive. Reading about Hyperinflation in Germany and the public perception of price rises - problem is when the policy makers start believing their own hype, as happened with our previous government.

Edited by fido on Tuesday 18th January 11:27

[Sonic]

VAT should have a nice knock-on effect for January's figure.

[boredofmyoldname]

So essentially the stuff I really need is going up in price, my wages are stagnating which in real terms means they are falling, my pittance of saving is being eroded by inflation, and the price of trinkets and tat that I can easily live without is falling.

Awesome.