Inflation for March (out at 9.30)

Milarky

http://www.statistics.gov.uk/cci/nugget.asp?ID=19

Milarky

Headlines....

Inflation
CPI down to 2.9%, RPI down to -0.4%

Andrew64

I think it means the worst of all worlds - pay will be frozen or cut, while essentials like food keep going up. A lot of people are going to feel poor!

nrsql

But if your personal inflation follows RPI it means you'd get an extra .4% over inflation on your NS&I index linked certs (if you cashed the in now).

steady__eddie

That's settled it then, my Leeds Inflation Buster I.S.A. will be biting the dust very shortly.

trenchwars

CPI is still above the 2% target and the index actually increased from February from 109.6 to 109.8.

RPI barely moved from 211.4 in Februrary to 211.3 in March.

john_s_2

Andrew64 wrote: »

I think it means the worst of all worlds - pay will be frozen or cut, while essentials like food keep going up. A lot of people are going to feel poor!

Did you read the article?

There were further large downward pressures from ... food and non-alcoholic beverages with the largest effect coming from vegetables where prices fell by more than a year ago across a range of products, for example cucumbers. Small downward pressures came from fruit, with prices falling by more than a year ago, and bread and cereals where prices fell this year but rose a year ago

Admittedly there was a "large upward pressure from clothing and footwear particularly from women's outerwear where prices for a range of items rose this year but fell a year ago."

Fortunately, I've given up my penchant for women's outerwear :-D

soulsaver

steady__eddie wrote: »

That's settled it then, my Leeds Inflation Buster I.S.A. will be biting the dust very shortly.

Well... if yours is the one at 2.5% + RPI as long as you cash it anytime before the anniversary you get still the 2.5%.
But if RPI goes rampant early 2010 this could be good to be in...
I have pondered this dilemma for a while. Has it been debated on here?

Milarky

soulsaver wrote: »

Has it been debated on here?

Yes, see the threads on the ISA boards about it. I applied and nearly opened one of these - stopped only by Leeds' incompetence and slowness which made me drop it and go elsewhere. The inflation busting idea (RPI+2.5%) looked quite attractive even assuming RPI would come still down by April 09 (the month they take the reading for the annual interest) But then mortgage cuts on this scale could not have been predicted - the result; RPI is about 2.6% less (i.e. the difference between this month's RPIX and RPI) than it would have been and you would have been getting about 5% for the first year instead of 2.5%

At least this 'fixed term' account allows an early exit at the first anniversary. But, as you suggest, with a floor of 2.5% - not much less than currently available rates on ISAs - and taking possible 'inflation' (RPI) 13 months from now it is still looks a reasonable position to be in for the second year.

gozomark

FWIW, I think RPI likely to be around 1% over the next year

The_Great_Mogul

I purchased one of these in August 2007 issue 15 'offering index-linking to RPi plus 1.35% pa compound if held for 3 years'. Is it worth holding on to this or should I cash it in?