Inflation now 3.5% - not good for savers

lisyloo

My personal inflation isn't that high, so I'm not worried yet.

A number of items are rising in price because of the weak pound.
For example motorbikes have gone up a lot.
Shoei helmets went up 30% in March.
A lot of camera equipment has gone up by similarly significant amounts.

But I agree it's very personal.

Unfortunately the worst hit are often those on fixed incomes because a high proportion of their spend is the essentials like food & fuel.

I'm very lucky because my mortgage is exceptionally cheap., but not everyone is in the same boat.

tradetime

Is there an index that is restricted to the essentials, food, energy, shelter, clothing, healthcare?

Savings_Dave

I do have about 10% of my savings in an NSI index linked account (should be 25% really)...I took this out back when the base rate was quite decent too...so some of my savings (including half in an ISA) aren't being eroded. I only have to worry about food price rises (1.6% personal rate) as I don't have many bills, car or mortgage - but it does hurt families.

I think that this inflation rise (well CPI anyway) is temporary as the BofE suggest it will fall back in the coming months...not sure on the RPI mind

fullstop

Last months food inflation report showed an inflation rate of 9% up from 7.5% in January.

Primrose

At the rate the cost of stamps is rising, looks as if the best investment is to buy several hundred pounds of postage stamps before the next price increase takes effect in April !

Stompa

fullstop wrote: »

Last months food inflation report showed an inflation rate of 9% up from 7.5% in January.

Do you have a source for those figures please?

The only reference I can find which matches:

http://www.independent.co.uk/news/business/news/inflation-at-sixmonth-high-as-food-prices-jump-1637856.html

is referring to 2009!

baby_boomer

Reaper wrote: »

Bad news indeed, but to get that in perspective a lot of that is VAT returning from the temporary 15% back to 17.5%, and so it should be lower next month. Hopefully.

I hope you're right that it will be lower, but I don't think it will be for the reason you suggest. If it drops it will be due to retailers responding to our tight wallets as mortgage interest rates rise, we get hit in April with an extra 1% National Insurance and we don't buy the goods we bought in December 2009 to take advantage of VAT at 15%.

The VAT increase will take 12 months to unwind - until we get a full year's figures where the starting point and end point include 17.5% VAT.

Unfortunately by January 2011 I expect VAT will have risen to 20% or 22.5% and so further complicate the long term trend figures for an extra year .

2010 wrote: »

I notice the government base their`s on September`s RPI but have guaranteed 2.5% for this April because it fell short.

They've guaranteed 2.5% because it is an election year and people of my age and older actually bother to vote .

Using money the government hasn't got to bribe the most important section of the electorate.
At what point will a future government tell the Bank of England to track 4% rather than 2% inflation because it doesn't have the cojones to take tough decisions?

Inflation is unfortunately the easy long term solution for the government's own debts and the banks' debts (which are effectively the government's debts).