RPI estimate for next publication date (24th March)

6022tivo

isofa wrote: »

If you are talking about Index Linked Savings Certs. for example you'll still be getting the % interest + a fixed 0 of RPI (it can never drop below zero even when RPI does).

So for example if you took out an Index Linked Savings Cert last year at 1.35% + RPI, then if RPI falls to -1% this week, you'll still be getting 1.35% on the certificate.

I have one which is +1.35% or something, I think I also have one at +0.1% which will be useless I suppose..

BigJonnyB

RPI is marginally down to 0 (from +0.1), CPI is UP to 3.2%...

nrsql

Why do they keep saying they expect inflation to decline further as the economy weakens?
It was kept down as we reduced our manufacturing base in favour of cheap imports. Now as sterling weakens and those cheap countries become more prosperous it seems natural that inflation should increase rather than decrease.
Reduction in RPI is partly due to the mortgage rate which presumably can't go down much further?

Only thing I can see keeping inflation down might be if the oil prices filter through to the retail price - but the energy companies seem to be resisting a reverse of the big rises.
That and people not being able to afford things. That will cause a lot of retail outlet closures with the accompanying short term price reductions followed by those that are left selling at the higher prices.

LesU

I see the BBC were joining in with the Sunday rags to push the mantra of deflation as the big worry. Strangely they pulled that particular article off their web-site this morning when the CPI was announced as going up.
I'd like to see a blacklist made of every 'expert' that is quoted as being 'surprised' at a particular financial result. Do any of these financial pundits actually get out from behind their desks and get into the real world? I suppose Nanny or the au-pair does the shopping, their accountant looks after the bills and the company pays for their nights out.
RPI , BoE interest rates and Mortgage rates are very closely linked and can therefore be manipulated to a degree, unfortunately the CPI is not so easily constrained.

sabretoothtigger

If rpi is calculated year on year then I presume the autumn will see it close on the cpi figure as it will then be a year ago that the rates started falling making this factor less important?

EalingSaver

sabretoothtigger wrote: »

If rpi is calculated year on year then I presume the autumn will see it close on the cpi figure as it will then be a year ago that the rates started falling making this factor less important?

Umm. Not sure I follow.

The interesting thing is not so much the difference between RPI and CPI rates, but rather the difference in the direction they are travelling and the rate they are travelling in that direction.

the two big factors which are making RPI head vehemently downwards (in this case I'm referring to the actual index, not the more colloquial RPI index CHANGE which is the 0.1/0% etc figure) is housing costs. There are two factors there a) Mortgage costs as dictated by mortgage RATES and b) mortgage costs as dictated by declining house prices.

BTW, the RPI (the index not the change from 12 months prior) reached its current peak in Sept 08 (218.4), so my guess would be quite likely that RPI change will be negative for Sept 09. Though it is interesting to note that the index is slightly higher in Feb than in Jan, but that could be a seasonal one month blip and drop back again in March.

Personally I'm not sure when mortgage costs really started coming down. While BOE interest rates were dropping September last year, were mortgage costs reflecting that? Possibly not. We've had more BOE cuts since then, and an increasingly greater feed through to actual mortgage rates. So I would have thought it could be much more than 12 months before that factor comes out of the equation. Plus calling where the drop on house prices will stop and when I would think is art not science. If anyone knows how to get that call right let me know...