What will the government to to help savers

sh856531

This makes perfect sense so long as the inflation rates accurately reflect the reality on the ground.

It may just be my perception, but while my savings rates are directly related to my actual financial situation, none of the official statistics for inflation, however they are measured, seem to bear a resemblence to what's actually happened to my purchasing power. In other words, if we had 0% interest rates and 0% official inflation, my purchasing power would still appear to be diminishing.

Are we being bamboozled with statistics or is it just a trick of the eye?

I understand what you're saying but I think the point that several people have been trying to make is that the RPI and CPI are accurate at measuring exactly what they measure.

I think the general score with the RPI just now is that even though food, council tax and electricity are still relatively high (and still increasing in some cases), these increases are being offset in massive reductions in mortgage interest payments and petrol.

Whether or not the RPI reflects your personal circumstances depends very much on whether your personal outgoings corresponds to the RPI "basket" in the appropriate proportions

Best Regards

S

cvd

CPI and RPI are accurate measurements of what they are intended to be - measures of inflation for an average person

Aaahhh... But as we all know, savers are not average people. They are rather unusual people who tend to spend less on various discretionary items.
So what are the CPI and RPI for the average saver?

sh856531

Aaahhh... But as we all know, savers are not average people. They are rather unusual people who tend to spend less on various discretionary items.
So what are the CPI and RPI for the average saver?

Well the problem with all the "basket of goods" approaches to measuring inflation is that there is no such thing as an "average" person.

:-)

gozomark

metrobus wrote: »

gozomark says.

rather than accusing people of massaging the figures, how about doing some homework - look at whats in the CPI and RPI indices, and come up with concrete examples of how its being massaged. Eg - you say electricity is up 28% - what is the CPI and RPI electricity component up ?

Thats alot more useful than just spouting off

I live in the real world and thats what my electric price has increased by.
I do not really care about your indicies,just what its costing me.

So do yourself a favour and keep quiet if
you do not have anything worth saying please boy.

you also say

2. BoE is independent - they cut rates due to deflation

which shows us all how little you actually know,since even your
cherished official figurers show we are not in
deflation,please get your facts correct boy.

I never said electricity inflation isn't 28% - it could well be that figure thats included in the RPI and CPI figure. However RPI and CPI are made up of more than just electricity. You have offered no proof that the official RPI and CPI figures are false - I'd love it if you could, but until you can, picking the odd item in the basket proves nothing.

we are in deflation - prices have fallen for the last 4 or 5 months in a row. Also BoE sets interest rates not on current inflation but on its expectations of inflation in 2 years time - if interest rates were still 4-5%, the forecast would be for significant deflation

cvd

In todays Independent:

Younger, richer households are gaining from lower inflation, house prices and mortgage rates, but at the expense of older, poorer fellow citizens.

This is based on a report by the Institute of Fiscal Studies who have looked at inflation rates for different types of household. This report is on their web site. They point out that the rate of inflation for pensioners is currently, on average, much, much higher than the rate for non-pensioners.

gozomark

I can believe it, as pensioners don't generally have mortgages. However, other years pensioners will face lower than average inflation

RayWolfe

The report also says that this anomaly will reduce in the coming months! Interesting to pick out the bits that suit your argument and leave out the rest.
But hey-ho, that's the entire nature of this and similar threads here.

cvd

Interesting to pick out the bits that suit your argument and leave out the rest.

Ooohhh.. I have as much right to do that as everybody else.

Incidentally, the report says it is likely that the difference will reduce, not that it will. Nothing is certain.

You missed the really important point in the report which I did not mention either.

Onawingandaprayer

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=442789&in_page_id=8

I thought pensioners generally didn't have mortgages!

gozomark

full report can be downloaded
http://www.ifs.org.uk/publications/4455