MSE News: Inflation up again - will base rate rise soon?

lvader

poppy10 wrote: »

there is no official target.

I think maybe this should be the target since I don't think it's up to the BoE to fight VAT increases. When the 2% was set I'm pretty sure that they weren't thinking they would need to tackle the effect of a extra 5% VAT over 2 years.

guitarman001

D1zzy wrote: »

The Index linked certs @ RPI +1% are looking OK :j

I got mine June 2010, £11k in them (JUST before they were withdrawn!!). Now shows just £11.25k??

poppy10_2

guitarman001 wrote: »

I got mine June 2010, £11k in them (JUST before they were withdrawn!!). Now shows just £11.25k??

Yep, that sounds about right.

RPI June 2010 224.1
RPI Dec 2010 228.4
Difference=1.9%, x£11000=£209
Plus pro rata 0.85% bonus ((6/12)*0.85)x£11000=£46.75
Total earned= approx £255, show if its showing £11.25k that would be right.

hallmark

lvader wrote: »

By the way they said on the BBC that CPI ex VAT is 1.9%, below the BoE target.

!!!!!! has CPI ex-vat got to do with anything? can we just opt-out of vat now then?

(not having ago at you poster, but what a pointless statement from the bbc)

lvader

You could also say what has extra tax got to do with inflation.

ManAtHome

We haven't hit the extra tax yet - latest inflation numbers were December. VAT dropped Jan 09 and went back up to 'normal' Jan 10 so more likely the 09 inflation figures were out of step with what almost passes for reality (eg Dec 2008-2010 more representative than Dec 2007-2009).

lvader

ManAtHome wrote: »

We haven't hit the extra tax yet - latest inflation numbers were December. VAT dropped Jan 09 and went back up to 'normal' Jan 10 so more likely the 09 inflation figures were out of step with what almost passes for reality (eg Dec 2008-2010 more representative than Dec 2007-2009).

The fact that VAT went back to 'normal' is not relevant, it's still hits inflation figures. All things being equal inflation will remain similar in 2011 and then fall back in 2012.

ManAtHome

Why is it not relevent to compare Dec 08 with Dec 10 which had the same VAT rates instead of Dec 09 to Dec 10 which had different rates?

hallmark

lvader wrote: »

You could also say what has extra tax got to do with inflation.

Why could you? VAT affects what something costs, we don't have a choice in whether or not we pay it, therefore it's a valid contributor or not to inflation.

Let's not get too carried away with economic gobbledegook. Inflation is a measure of how much more stuff costs & that includes changes in VAT.