Rpi 3% Cpi 4.2%

neas

http://news.bbc.co.uk/1/hi/business/7784939.stm

Anyone know why RPI is dropping faster than CPI? Mortgages getting cheaper along with houses?

My rent is due for renewal janruary and they have a clause in that they want to put rent up by RPI*1.5... so if it drops lower will be a good bargaining position for me to cancel any rent increse.

sympatex

RPI includes house prices (falls), CPI is about as useful as a slap in the face. Unless you eat plasma TV's of course.

Generali

neas wrote: »

http://news.bbc.co.uk/1/hi/business/7784939.stm

Anyone know why RPI is dropping faster than CPI? Mortgages getting cheaper along with houses?

My rent is due for renewal janruary and they have a clause in that they want to put rent up by RPI*1.5... so if it drops lower will be a good bargaining position for me to cancel any rent increse.

RPI includes mortgage repayment costs. If mortgage interest rates fall then so does the RPI, all other things being equal.

Cannon_Fodder

http://news.bbc.co.uk/1/hi/business/6356475.stm

"So why do the CPI and RPI values differ?
Not all the items covered by the RPI are included in the CPI measure.
For example, the CPI does not include council tax, mortgage interest payments and some other housing costs.
The CPI measure also includes some items - such as charges for financial services - which are not in the RPI. Another difference is that the CPI measure covers a broader sample of the population in its calculations than RPI."

http://www.ndad.nationalarchives.gov.uk/CRDA/61/DS/2/6/detail.html
"CPI excludes a number of items that are included in RPI, mainly related to housing. These include council tax and a range of owner-occupier housing costs such as mortgage interest payments, house depreciation, buildings insurance, estate agents' and conveyancing fees."

mitchaa

Just to be Anal, thw CPI figure is 4.1% not 4.2

RPI is used for my pay awards, it needs a kick in the right direction come January.

Cannon_Fodder

RPi just lost 1.2% in one month; with the recent big Interest Rate cuts, and the continued low price of petrol to work further into the supply chain, etc, there a fair chance of another 1% at least to come off RPI, in January's announcement of December's figure.

Then things may ease, perhaps just 0.5% off in January itself..?

RPI could well around 1.5% after January's figures are annouced.

Generali

mitchaa wrote: »

Just to be Anal, thw CPI figure is 4.1% not 4.2

RPI is used for my pay awards, it needs a kick in the right direction come January.

My guess is that interest rates won't start to rise again until late Spring/early Summer, possibly a bit late for a boost to the RPI in time for Jan.

pickles110564

Generali wrote: »

My guess is that interest rates won't start to rise again until late Spring/early Summer, possibly a bit late for a boost to the RPI in time for Jan.

Which year?

sdooley

Generali wrote: »

My guess is that interest rates won't start to rise again until late Spring/early Summer, possibly a bit late for a boost to the RPI in time for Jan.

Unless there's a full-blown currency crisis.

WTF?_2

sdooley wrote: »

Unless there's a full-blown currency crisis.

Sterling has already slumped massively against the dollar and euro in recent months, probably it's bottomed out for now. The Euro is overdue a kicking so keep an eye on it.

Expect RPI to be increasingly quoted as the measure of inflation ... the govt had been promoting CPI because it was a lot lower but they need an excuse now to pursue inflationary policies (with CPI at 2x the target rate)

mitchaa

Hmm, perhaps this recession is causing a little disruption indirectly:think:

Got shafted with Euros on Friday at 1.09 and now RPI is falling faster than CPI, as said in post above, no good for pay awards.