UK inflation tipped for big fall

IveSeenTheLight

UK inflation is tipped to show a sharp fall when official figures for December are released later.
Analysts polled by Reuters expect the Consumer Prices Index to have dropped sharply for the month, to an annual rate of 2.7%, from 4.1% in November. The headline Retail Prices Index rate of inflation is predicted to drop below 1%, from November's annual rate of 3%.



http://news.bbc.co.uk/2/hi/business/7839023.stm

purch

UK inflation tipped for big fall

Damn !!!!

I've just bought a new wheelbarrow for all those £ 1,000,000,000,000,000.50 Notes that the BOE is printing !!!!

What a waste !!!!

illgetthere

does that have an effect on interest rates?

sorry for sounding stupid...

mbga9pgf

They cant go below 0, which is where they are already headed, so no. The only other option is print!

neas

love the rpi at 0.9%... doubt my landlord will try put rent up now lol (has a clause saying they will try put up rent by 1.5x RPI which would've been 7.5% rise but is now 1.45% rise hehe)

mbga9pgf

Wait till RPI goes negative and hold him to his word!!!

WTF?_2

IveSeenTheLight wrote: »

UK inflation is tipped to show a sharp fall when official figures for December are released later.
Analysts polled by Reuters expect the Consumer Prices Index to have dropped sharply for the month, to an annual rate of 2.7%, from 4.1% in November. The headline Retail Prices Index rate of inflation is predicted to drop below 1%, from November's annual rate of 3%.

http://news.bbc.co.uk/2/hi/business/7839023.stm

The figures are now out - despite the hype about falling prices, inflation in December was 3.1%. It was expected by many that it would fall further, to 2.7% according to the beeb (on the same link, page has been updated).

http://news.bbc.co.uk/1/hi/business/7839023.stm

That's 50% above the government target. With the pound resuming its fall after a brief respite, doesn't look too good for consumer prices. Bear in mind that there was a VAT cut there too - which would have a deflationary effect.


RPI fell a lot more sharply however, down from 3% to 0.9%. Then again there's a component of mortgage costs there.

Sir_Humphrey

!!!!!!? wrote: »

The figures are now out - despite the hype about falling prices, inflation in December was 3.1%. It was expected by many that it would fall further, to 2.7% according to the beeb (on the same link, page has been updated

But I have been reading on HPC websites that CPI was a con, and that RPI was the most accurate measure of inflation. My main cash ISA how has a positive real IR, just as my second 6.15% ISA bond matures. How's that for timing!

mbga9pgf

RPI is the fairest measure in my opinion.

Its interesting to see the effect of housing - RPIX is quite a lot higher.

Sir_Humphrey

mbga9pgf wrote: »

RPI is the fairest measure in my opinion. Its interesting to see the effect of housing - RPIX is quite a lot higher.

The biggest risk for housing bears is unemployment. There is going to high unemployment, but if IRs were higher, unemployment would be higher still. I think we bears need to drop the persecution complex and recognise that our plan to save and wait for the HPC is paying off big time.

mbga9pgf

Yep. As long as I keep my job. RPI was only unfair whilst prices were on the up. You cant flip flop and ignore RPI at these levels now I am afraid. Also puts paid to the whole inflationary theory as well. How long RPI remains at these levels and below will be the big question. I reckon we are good for a year or two before the reflation starts in earnest.