standard of living to plunge at fastest rate since 1920s BOE Merv says

MrPThomas

Bank of E are not being honest at all, as high as there inflation figures are they are still not as high as real inflation.

They (RPI) inflation, it came in at 5.1%. I wonder what real inflation is going to be in a few more months?

Hereward

MrPThomas wrote: »

Bank of E are not being honest at all, as high as there inflation figures are they are still not as high as real inflation.

They (RPI) inflation, it came in at 5.1%. I wonder what real inflation is going to be in a few more months?

What is real inflation?

Both CPI and RPI measure increases in prices (notquite the same as inflation), it just happens that they use slightly different methodologiues to claculate the change in prices. For example RPI includes housing costs and CPI doesn't.

smeagold

The figures are spurious and inflation is much higher. Did you know that those that calculate inflation have a little trick. If, for instance, an appliance goes up by 5% but they consider that it is 10% better or more efficient that item is then marked as -5%.

Real inflation is probably closer to 8%

StevieJ

MrPThomas wrote: »

Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again.

Have I missed something here? I thought the double dip was off and we were expecting a rebound in Q1. I think that article is an exercise in creative writing

Edit just noticed that Doubting Thomas is reviving an old thread.

StevieJ

smeagold wrote: »

The figures are spurious and inflation is much higher. Did you know that those that calculate inflation have a little trick. If, for instance, an appliance goes up by 5% but they consider that it is 10% better or more efficient that item is then marked as -5%.

Real inflation is probably closer to 8%

You mean like a modern £100 recordable DVD compared to a 1980 (£450) video recorder, I would say they have got a point then again sometimes you get the best of both world, better and cheaper.

Pobby

Of course inflation is on the rise. Stick up interest rates, how could they. My business is bumping along the bottom. Turnover from nearly £900,000 a year to not very much. No staff and few overheads but working on a very small margin.

Look at the wider picture. Older people have paid hard into pensions and investments. Not that great from where I am sitting.

Mad money lending over the last decade or so. The economy was very much involved with the construction industry. Money as wages then were very high. I know that as my ex brother in law was earning up to £120k a year as a small roofing company.

Debt is at an all time high. Unemployment figures are, frankly shocking. Have you seen the still empty new builds? I would love to see savings rates at the average of 8% but just imagine the problems that would cause.

To me, it is about a country that got it very wrong. Invest in housing rather than the wider economy. Cheap loans however not so cheap now. My lad at nearly 40 pays a little under a grand a week. Works for a nut case but is on decent money but is always under the threat of being laid off.

They have a 2 year old. Best part of £400 a month going out in nursery fees whilst my daughter in law works part time. Now consider the raising of the interest rate for buyers of recent times.

We ain`t there yet. The government cuts are about to come in.Goodness knows what that will do. Will it impact on housing? Most likely. My wife, in the care industry, has noticed the inflated cost that clients pay out or those on social are stung. Not looking great from here.