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MSE News: NS&I revives inflation-beating savings certificates
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Former_MSE_Guy
Posts: 1,650 Forumite
This is the discussion thread for the following MSE News Story:
"The five-year NS&I deal tracks the RPI inflation measure plus 0.5% on deposits between £100 and £15,000 ..."
"The five-year NS&I deal tracks the RPI inflation measure plus 0.5% on deposits between £100 and £15,000 ..."
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I'm intruiged that they chose to re-launch today, just before another lot of monthly inflation figures are due. I wonder if the April figures (due out soon) will bring a surprising change to headline rates.
NS&I said in an email to me "we expect the issues will be on sale for a sustained period". I do hope so, but think they may sell out quicker than they expect.0 -
didn't he say very recently that he thought inflation would be 5% - perhaps he's on a bonus if they get zillions in!
P.S What kept you MSE? This was on Radio 4 this morning before 0800! And repeated before 0900. we got an email from NS&I sent at 12.00 too!0 -
I think that MSE Guy has just about managed to avoid suggesting that last year's headline inflation rate (5.3%) will be the rate paid going forward. It won't stop people misunderstanding, but I think MSE have heeded complaints from last time around about how to report the returns on these certificates. So thanks for this.0
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frugalfran wrote: »didn't he say very recently that he thought inflation would be 5% - perhaps he's on a bonus if they get zillions in!
P.S What kept you MSE? This was on Radio 4 this morning before 0800! And repeated before 0900. we got an email from NS&I sent at 12.00 too!
I thought Mervyn said CPI inflation would top 5%. In 9 of the last 10 years RPI has been higher than CPI. I think its generally assumed that RPI will be 0.8 to 1.0% above the CPI rate on average.0 -
Hmm - NS&I withdrew their last issue just before inflation started to spike - is the relaunch a strong signal that inflation will be a fair bit lower in 12 months time - after all why borrow in this way when they could get money in apparently more cheaply with a standard fixed rate product?!I think....0
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NS&I are only hoping to raise a net additional £2bn (in the range £0 to £4bn) this year - my guess is with the index linked product accounting for the lion's share.
£2bn is a very small part of borrowing requirement. But by offering to borrow SOME of the money it needs on an index-linked basis, the government can maintain a stance that it is commited to sound money and keeping inflation in check. Personally, I have my doubts about this!0 -
To be fair I don't think the News section is really meant to be breaking news in the same way as the BBC. I think the idea is more to explain how news items affect you, is it good or bad etc, which takes longer to research.frugalfran wrote: »didn't he say very recently that he thought inflation would be 5% - perhaps he's on a bonus if they get zillions in!
P.S What kept you MSE? This was on Radio 4 this morning before 0800! And repeated before 0900. we got an email from NS&I sent at 12.00 too!0 -
Hmm - NS&I withdrew their last issue just before inflation started to spike - is the relaunch a strong signal that inflation will be a fair bit lower in 12 months time - after all why borrow in this way when they could get money in apparently more cheaply with a standard fixed rate product?!
I think they withdrew it because it was too obvious that it was a market leading product (especially with the VAT hike coming) and was sucking up too much money - partly because of the lack of anything else to compensate for the risk.
It's probably back not because they think that inflation will decrease but because the BOE rate will probably go up and other products will be competitive and there's less nervousness about banks being allowed to fail.
I still think this is a bit of a no-brainer as a core holding and I think beats cash ISAs at the moment.0 -
Does anyone know if RPI includes the VAT rise? If so, the inflation rate next year will be significantly lower once that 2.5% has been removed from the equation.0
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Does anyone know if RPI includes the VAT rise? If so, the inflation rate next year will be significantly lower once that 2.5% has been removed from the equation.
I believe it includes the VAT rise.
However don't forget that many items are lower or zero VAT rated such as food and energy bills.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0
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