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CPI hits 4.4pct
Comments
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angrypirate wrote: »When Labour cut VAT the BoE used CPI falling to below 2% a reason to slash interest rates in fear of deflation. Now its convenient for the BoE to use the rise in VAT as a reason not to raise rate. Its either one or the other - it shouldnt be both.
I'm sure many people would agree that rates were too low during the housing boom.
It seems perverse that some people now want them to be too high.
Do two wrongs make a right.
The economy is on its proverbial !!!!0 -
I'm sure many people would agree that rates were too low during the housing boom.
It seems perverse that some people now want them to be too high.
Do two wrongs make a right.
The economy is on its proverbial !!!!
I did in fact say that rates were a bit too low during the housing boom, but the BoE kept saying "it's all about keeping inflation on target". I said that the problem will come when debt levels are so high that any rise in interest rates will cause a lot of harm. Effectively, by keeping rates quite low (or at least not putting them up to slow the borrowing boom), the BoE were backing themselves into a corner. That is where we are now.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »You can invest in IFCDs, Corporate Notes, CDIPs, TIPS and goverment bonds external to the UK (I-Bonds). The information is out there, you just have to get away from the mentality that National Savings bonds and UK savings accounts are the only option.
As I said, I realise that.
You told me that there were hundreds of inflation linked products with shielded capital. I was genuinely suprised about that, otherwise I would be invested in some of them. You told me that because I did not know of these products, it doesn't mean they don't exist. I admit that I don't know about every financial product, but I did have major doubts that you were telling the truth. These doubts have now been confirmed. I won't use the
, as I earlier accused you of being childish. Mind you, you later replied saying that a bit of childish behaviour is OK. So . 
30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »You can invest in IFCDs, Corporate Notes, CDIPs, TIPS and goverment bonds external to the UK (I-Bonds). The information is out there, you just have to get away from the mentality that National Savings bonds and UK savings accounts are the only option.
I never thought that NS&I Bonds and UK savings accounts are the only options. You are making some incorrect assumptions about me.
For a start NS&I Index linked bonds are NLA (I have had them in the past). I can clearly see that UK savings accounts aren't inflation proof.
When it comes to savings products, I am quite clued up, hence my suprise with your earlier advice.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I see people are still using the CPI-Y rate, and deducting the FULL impact.
Yet, the VAT rise didn't actually have a full impact. Small example, 99p shops didn't turn into £1.01 shops.
Yet the CPI-Y rate assumes they did, and deducts the impact should they have turned into £1.01 shops.
Therefore CPI-Y is flawed in that it strips out the full impact of a VAT rise being applied to every good. This didn't happen, so can't really simply deduct the full impact. This leaves inflation higher than those who like to use this indicator wish to consider.
As for the rest of the comments, its all just the same old arguments.0 -
Graham_Devon wrote: »I see people are still using the CPI-Y rate, and deducting the FULL impact.
Yet, the VAT rise didn't actually have a full impact. Small example, 99p shops didn't turn into £1.01 shops.
Yet the CPI-Y rate assumes they did, and deducts the impact should they have turned into £1.01 shops.
Therefore CPI-Y is flawed in that it strips out the full impact of a VAT rise being applied to every good. This didn't happen, so can't really simply deduct the full impact. This leaves inflation higher than those who like to use this indicator wish to consider.
As for the rest of the comments, its all just the same old arguments.
What about all the shops that have put prices up by more than the VAT rise but used it as an excuse ?
As an example - McDonalds won't change the price of their 99p menu, but will compensate by putting other menu items up by more.
Accross the mix of products they will recover the VAT and maintain margins.0 -
Graham_Devon wrote: »I see people are still using the CPI-Y rate, and deducting the FULL impact.
Yet, the VAT rise didn't actually have a full impact. Small example, 99p shops didn't turn into £1.01 shops.
Pound shops are quite a poor example as, rather than become a pound and a bit shop, they adjust their offering by selling less for the same amount of money i.e. 4 batteries for a pound instead of 5. They also tend to sell more sub-prime stock where a supplier is trying to clear end of line product through a non-competing channel.
Tesco/ Sainsbury's/ Asda all managed to pass on the full VAT rise - that you didn't notice shows that they are good at what they do.0 -
Pound shops are quite a poor example as, rather than become a pound and a bit shop, they adjust their offering by selling less for the same amount of money i.e. 4 batteries for a pound instead of 5. They also tend to sell more sub-prime stock where a supplier is trying to clear end of line product through a non-competing channel.
Tesco/ Sainsbury's/ Asda all managed to pass on the full VAT rise - that you didn't notice shows that they are good at what they do.
Regardless of the example. You can use whatever example you like. Point still stands.
As for blueboy, I don't really get your point. If they are putting prices up higher than VAT, then that is nothing to do with CPI-Y.
The CPI-Y measure was worked out properly by analysyts. Take CPI-Y off the inflation rate. Add 0.8% to the figure you end up with. That, was what was worked out, to be the real value of the VAT rise. It did have an impact on inflation, but it was overestimated by 0.8% due to assuming every single item measured increased in price due to VAT.0 -
i'd love to know how they're going to raise rates over 2%/3% without taking the QE money out of the system...0
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