Rpi 3% Cpi 4.2%

Generali

pickles110564 wrote: »

Which year?

2009. Governments are going to be borrowing huge amounts of cash by then. If they're not going to print money (ie they sell the bonds they use to increase the money held by the Government rather than just increasing the cash in the Government's bank account) then the increased demand for cash will mean it's price starts to rise in many currencies.

Japan and the US could be exceptions due to them being (flawed) safe havens.

Also the Euro could come under pressure as investors want to hold German bonds but not Greek or Portuguese ones.

sdooley wrote: »

Unless there's a full-blown currency crisis.

The currency thing is interesting. The UK Government (as far as I know) has no formally stated currency policy. The MPC is meant to target CPI to 2% and support UK Government policy. That's all they are meant to do. If there is no policy towards the currency then the MPC should only look at it from the point of view of the impact on CPI.

!!!!!!? wrote: »

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.

That something has fallen x% doesn't make it good value. Sterling could fall much further - not a prediction but for it to fall by the same amount again from peak vs $ still puts it in the range since most recent lows.

!!!!!!? wrote: »

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)

RPI is the best measure of inflation. Clearly it's not perfect but it's the best we have. The Tories had a TPI (tax and prices index) which sought to show how prices moved WRT disposable incomes.

neas

my pay award was never in line with rpi usually below it unlessi got a 'promotion' so prob wont be too affected.

Hopefully get higher than RPI .. so drop drop droP!.

handful

This is at least one area where students will benefit. Student loans are paid back 'interest free' in effect but in line with the RPI and not CPI.

stephen163

Yep, and presumably the value of the student loan will actually decrease if the RPI goes negative :beer:

Masomnia

stephen163 wrote: »

Yep, and presumably the value of the student loan will actually decrease if the RPI goes negative :beer:

Nah they'll have some clause hidden away somewhere about that, I bet it's capped somehow, like a collar on a mortgage tracker. Fingers crossed though!

Not that I want the economy to suffer to lower the value of my debt, I'm not that selfish, but every cloud and all that.