BoE set to keep interest rates at record low

chucky

Graham_Devon wrote: »

Your mortgage may be less as a percentage of your take home pay if you get a 2% wage rise.

But CPI is where it is because of increasing prices elsewhere.

So if your fuel is now costing you 15% more since last year, then you have LESS money, not more, just because your mortgage doesn't get hit by inflation.

Doesn't matter how you put it, if your money coming in has gone up 2%, while your outgoings have gone up 20%, you are worse off and your wages don't go as far.

can someone explain to this devon bloke that just because petrol has increased by 15% it doesn't mean that all your spending is 15% more. #desperatetoproveapointmuch

HAMISH_MCTAVISH

Graham_Devon wrote: »

Doesn't matter how you put it, if your money coming in has gone up 2%, while your outgoings have gone up 20%, you are worse off and your wages don't go as far.

Graham, it all depends how much of your outgoings are inflating, as has been explained to you on numerous times.

Example: Wage inflation of 2% and CPI of 4%.

Year one.....

Income = 100,000

Outgoings (that are inflating) = 20,000

Year two....

Income = £102,000

Outgoings (that are inflating) = £20,800

Net gain of £1200, despite inflation being higher than pay rises.

Inflation impacts people in very different ways because people spend different amounts of their income on inflating items.... And your personal rate of inflation will not, in most cases, match CPI.

I reckon my personal inflation rate is less than 1%. A pensioner's inflation rate may be far higher.

ILW

It does appear that letting inflation run away is more painful for the less well off. The only ones that gain are those with a fair income and a lot of debt.

Herbie_Hancock_I_wish

Point taken. When I said " savings " I didn`t mean it was all in the bank. Approx 65% of that sum is spread over a wide portfolio , all at low to medium risk. The rest is in cash ISAs and the remainder in actual bank accounts.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Graham, it all depends how much of your outgoings are inflating, as has been explained to you on numerous times.

Example: Wage inflation of 2% and CPI of 4%.

Year one.....

Income = 100,000

Outgoings (that are inflating) = 20,000

You explain it many times. But look at your stupid income figure you have to use to make your whole theory work.

It's not that I don't understand. It's that your figures are just extravagent as it's the only way you can make your point work in your favour.

nicko33

HAMISH_MCTAVISH wrote: »

A pensioner's inflation rate may be far higher.

"May" be?
what do you think the odds are?

Wookster

chucky wrote: »

inflation is good for debt

This must be one of the most ignorant comments I have heard for a while.

Anyone who says this doesn't know how damaging inflation is for any economy.

chucky

Wookster wrote: »

This must be one of the most ignorant comments I have heard for a while.

Anyone who says this doesn't know how damaging inflation is for any economy.

that's why i said it was good for debt specifically and not good for the economy....

Originally Posted by chucky
inflation is good for debt

what was that about you being ignorant and not being able to read??

replumbed

HAMISH_MCTAVISH wrote: »

Graham, it all depends how much of your outgoings are inflating, as has been explained to you on numerous times.

Example: Wage inflation of 2% and CPI of 4%.

Year one.....

Income = 100,000

Outgoings (that are inflating) = 20,000

Year two....

Income = £102,000

Outgoings (that are inflating) = £20,800

Net gain of £1200, despite inflation being higher than pay rises.

!!!!!!!? Does average Joe has an income of 100,000 and (inflating) outgoings of 20,000? How ignorant are you.

dlk

replumbed wrote: »

!!!!!!!? Does average Joe has an income of 100,000 and (inflating) outgoings of 20,000? How ignorant are you.

Where did he say anyone had income of £100k and outgoings of £20k? He said 'inflating' outgoings of £20k meaning that not all living costs are going up.

If you want other figures I'll give you an example using myself.

Income £35600 with wage rise this year 2.5% = £890 or £74pm (about £50pm after tax)

Costs - Rent £650 has actually gone down to £600pm
Total household bills £304pm up to £336pm
Petrol/food costs £280pm up to £320pm
other costs have changed more due to lifestyle
changes than costs i.e having a child but I would
guess my former leisure costs of £150pm might have
risen to £170pm

So using the above my costs have gone from £1384 to £1426 showing a personal inflation rate of about 2.89%. So yes my fuel and bills etc may have risen by 10-15% but not all my expenditure has risen like that so even though some costs have risen fast my wage inflation has still left me better off than I was last year.