CPI hits 4.4pct

Graham_Devon

Just thinking, isn't RPI more worrying? Its at a 20 year high. This, at a time when mortgage interest is very much lower than it was a few years ago.

DervProf

RenovationMan wrote: »

The statement that you seem to be going all around the houses about wasnt about finding interest linked savings products though, as you well know.

Can I ask a serious question? You were on another thread today creating a circular argument when something Hamish posted could be interpreted in two ways; one way that was completely within the realms of the discussion at hand and one that was completely left-field. You decided to interpret the left-field option and argued up and down to the point where most readers were becoming comatose. I tried to understand what on earth you were going on about, which seems to have annoyed you and for my pains I have now been dragged into a similar pointless, coma creating circular argument.

My serious question is therefore what do you get out of this sort of discussion?

TBH, I don't get a lot from many discussions on here. There's a bit of banter, which I enjoy. There's some humour, which I try to add to. There is (believe it or not) some good advice, which has helped me in the past. I think there is a lot of "horn locking", which I think is rather entertaining.

Some people come here who seem to be rather vindictive, which I certainly don't intend to be, or even agree with. Others seem to want to boast about how well they've done, I suppose no harm in that, but I have made my opinions known about them.

To answer your comment about me "creating a circular argument", it is not something that I go out of my way to do. I will argue my case if I think I`m right, as anyone else should do. I will also admit if I realise that I am wrong, which is not something I`ve seen very often, but fair play to anyone who does. This particular circular argument, the one about getting risk-free, inflation linked savings was started by you, as you well know, by stating that there are hundreds of products available. Now I have continued to persue this, as there are clearly not hundreds of products that offer inflation linked returns and no risk to capital. You could end this by saying that you were wrong. You have, to be fair, informed me that there are products available that aim to match or beat inflation, but there are not "hundreds" that are risk free.

As far as the Hamish comment goes. Yes, there are two ways that it can be interpreted, either what he wrote, or what you think he meant to write. I took the first option, as there was nothing ambiguous in what he typed. There seemd to be no bad spelling mistakes, or errors in his grammar. He stated something to me which seemed clearly wrong, if not open to debate, so I started that debate.

I might have opinions that others don't agree with. I might make a statement which is incorrect (or even simple mathematical errors). Despite this, I will correct my errors, admit I was wrong, or clarify something that was misunderstood. Hamish has not clarified what he meant. He may well have been talking about borrowing multiples, but he did not make that clear. I was tackled about arguing my point, I simply argued back by stating what Hamish typed, and stating my reply to Hamish's statement. I even agreed that if Hamish meant what some people say he meant, then I'd agree with him.

So, I`m not here to drag anyone into a circular argument. I'm here because I have certain beliefs on the rights and wrongs of our economy and property market. We all have our opinions, and this is a place where we can voice those opinions. Some of us will get dragged into mud slinging and name calling. I do from time to time, but I do generally like to keep it polite, and try to add a dose of wit and humour. And like a lot of forum members, I think I have friends and foes, but I will agree with a "foe" if he/she makes a point I agree with.

Ramble over.

blueboy43

Graham_Devon wrote: »

Just thinking, isn't RPI more worrying? Its at a 20 year high. This, at a time when mortgage interest is very much lower than it was a few years ago.

more worrying is the cretinous decision by this government to "triple lock" pension increases - the effect of which will increase the burden of state pensions over time - until of course the policy reverses.

blueboy43

chucky wrote: »

i'd love to know how they're going to raise rates over 2%/3% without taking the QE money out of the system...

it has always been stated by BoE that interest rates will go up before QE is reversed.

Generali

DervProf wrote: »

I can honestly say that I have seen a few, and I'm sure a few more do exist. Maybe you could point me in the direction of a few of the hundreds that are available. I'll forgive the childish use of .

http://www.dmo.gov.uk/index.aspx?page=gilts/indexlinked

There's a strong secondary market in all or at least most issues. A cheap execution-only broker will charge £10-15 to execute a trade plus a few pounds each year to hold and process the coupon (interest) payments. The coupon is linked to the RPI and realistically couldn't be changed as that would almost certainly be a default.

HTH

hallmark

DervProf wrote: »

Isn't it rather convenient that the BoE's strategy of setting interest rates seems to benefit rising, or maintaining property prices ?

The MPC simply make up whatever allows them to keep rates as low as possible.

If inflation is low, IRs need to be kept low

If inlation is high, IRs need to be kept low, because soon inflation will be low.

If inflation is really high, IRs need to be kept low, because in a year or two inflation will be low.

And so on and so on. But then as we all know, if the MPC was worth a toss they would have raised interest rates years ago when they should have in order to control the insane house price inflation. Corrupt puppet organization.

julieq

Enlighten me. Why would the MPC want to conspire to keep interest rates low exactly?

wolvoman

ILW wrote: »

Just those that overborrowed, possibly to act as a deterrent to others.

How do you define 'overborrowed'?

wolvoman

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.

There is some evidence of that.
I work in retail and I know retailers on the whole have absorbed some of the VAT rise. They have to, huge amounts of products are pre-priced and put at price points so these can't be changed overnight.

As to the point of retailers stocking packs of 4 instead of 5 for the same price and hence 'hiding' the VAT rise. This may happen but again takes several months to feed through the supply chain to stores. It won't have happened as a result of the VAT rise just yet.

DervProf

julieq wrote: »

Enlighten me. Why would the MPC want to conspire to keep interest rates low exactly?

Yes, why would anyone in power want to look after their own self-interest ? Surely their priority would be to do what is right for the nation, rather than line their own pockets.