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Debate House Prices


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Inflation

I have no links to post as this is just my gut feeling.

This is the first month I have worryingly felt the effects of inflation.

This could be down to the VAT increase and it is definitely felt when filling the car up.

I was just wondering if any one else had noticed anything?

Hopefully everyone will post that prices have dropped and it is just my own circumstances ...I am a mortgage payer and one of the biggest threat to continued low interest rates seems to be inflation running away, so this is a self interest post.
«13

Comments

  • Radiantsoul
    Radiantsoul Posts: 2,096 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Jaffa cake prices have gone through the roof.
  • Kohoutek
    Kohoutek Posts: 2,861 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 7 February 2010 at 2:15PM
    The inflation rate is 2.4% at the moment, they'll be another update in mid February.

    It's in the government's own interests to encourage inflation, otherwise paying off the national debt would be impossible. The Bank of England is betting on it - they recently changed the structure of their pension scheme to 70% inflation linked gilts (government bonds are sensitive to changes in inflation).
  • globalds
    globalds Posts: 9,431 Forumite
    As a mortgage payer, high inflation would benefit you as your overall debt will quickly fall away. Bring it on !!!

    :T


    It would if I wasn't using this low patch to overpay.

    Also I think the reality of prices rising with wages tracking a long way behind does not fill me with cheer.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    As a mortgage payer, high inflation would benefit you as your overall debt will quickly fall away. Bring it on !!!

    :T

    Wouldn't if wages don't rise.

    With extra taxes, such as the increase in employer NI, wage rises are not guarenteed, especially at an inflationary rate.
  • higher interest rates usually folow high inflation
  • Mr.Brown_4
    Mr.Brown_4 Posts: 1,109 Forumite
    higher interest rates usually folow high inflation
    Could be different in the new global economy. We sell our debt to foreigners, they try to balance risk and reward. How sustainable is the UK deficit? That's the interest rate story.

    As for inflation - imports and low pound - again global factors come into play.

    The link between wages, inflation, interest rates may be of less importance this time around. We could end up with static wages accompanied by tax increases, service cuts, inflation and higher interest rates.

    Try watching Iceland, Ireland, Greece and the others try to deal with this problem. Not sure how much better the UK is.
  • Yes, have noticed it, when doing weekly shop in the supermarket, and filling the car with petrol. Watch interest rates go up next - make overpayments on your mortage if you can. It is inevitable that mortage payments will go up, while savings rates lag behind
  • When is the price of household fuel coming down?

    Ahhh

    I forecast a drop in inflation in March/April... ;)
    Not Again
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    When is the price of household fuel coming down?

    Ahhh

    I forecast a drop in inflation in March/April... ;)

    Petrol "should" be coming down also. It is at a 3 month low, as last August really but was there 2p added in sept?
  • Batchy
    Batchy Posts: 1,632 Forumite
    Yes, have noticed it, when doing weekly shop in the supermarket, and filling the car with petrol. Watch interest rates go up next - make overpayments on your mortage if you can. It is inevitable that mortage payments will go up, while savings rates lag behind

    why make overpaments on your mortgage if you can earn more on it in a savings account?
    Why lose the cash flow too... incase something mad happens, you can't then ask the mortgage company for it back?
    Plan
    1) Get most competitive Lifetime Mortgage (Done)
    2) Make healthy savings, spend wisely (Doing)
    3) Ensure healthy pension fund - (Doing)
    4) Ensure house is nice, suitable, safe, and located - (Done)
    5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)
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