RPI projections

Linton

No-one knows what the RPI in 3 years will be. Asking more people who dont know isnt going to get you a better answer.

So what do you do? The answer is to diversify. For example you see inflation as a risk: OK put a third of your pot into index linked funds. If you dont need the money in the foreseeable future put third into an investment fund and a third into a 1 year fixed rate cash deposit account.

mroller

I think market expectations of RPI are quite high.

If you look at index linked gilts, they are yielding 0% or less, this yield calculation assumes an RPI of 3%/year. which means the market expects RPI to be higher than 3%

Of course official predictions are different, the BoE expects inflation to fall below 2% next year.

just my opinion.

ses6jwg

What the bank of england publishes as its expectations and what its true expectations are, are two different things IMO

RobStaffs

Some very useful info on the thread..I think I am going to tie a lump sum for 1 year only on the basis that with the exception of our S&S Isa's(paying by DD) we have maxed all of the other tax free options.Will keep enough in the easy access to deposit funds in the 2012/13 cash Isa's and hopefully another opportunity in the NSI ILC's

ChiefGrasscutter

ffacoffipawb wrote: »

I wouldn't touch any Post Office product for the shameful way the parent company is treating holders of the Bristol and West PIBS who they took over in the 1990's.

I wouldn't trust a company like this at all.

See

http://www.fool.co.uk/news/investing/2011/06/10/bank-of-ireland-offers-pibs-holders-peanuts.aspx

http://www.fixedincomeinvestments.org.uk/home/bank-of-ireland-13-375-subordinated-bonds

http://www.protect-my-savings.co.uk/press-coverage/

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8571281/UK-pensioners-in-legal-revolt-over-Bank-of-Ireland-restructuring-terms.html

Pibs (permanent interest bearing shares) are not savings account.
They are true corporate bonds with all the risks that go with them.
They are not covered by any compensation scheme.
The BoI took over B&W in the mid 1990's as I recall - the pib owners had plently of time to sell in the market if they did not like being owned by the Irish bank.
Pibs are traded on the market as bonds - and cannot be sold back to the issuer.
And the lesson is.....if someone guarantee's you 13% interest at infinitum/whatever then there is going to be a catch somewhere.
Pibs were heavily sold to older people as they didn't give a sh**t what the capital value did or whether there was any capital so long as they got their 13% for life. Presumably the fact that the whole edifice might go bust and they would neither get their capital nor their interest never occured to them.

Strange how some people want the banks to go bust and the bond holders get nothing - yet when this actually happens and the bonds holders are hung out to dry it becomes totally unfair.

pqrdef

ffacoffipawb wrote: »

I wouldn't touch any Post Office product for the shameful way the parent company is treating holders of the Bristol and West PIBS who they took over in the 1990's.

It's the Irish government that's doing this (that is, making a rather generous offer in the circumstances).

I'm afraid the shafting of the B&W PIBS-holders was done by the B&W shareholders when they sold out for their windfall cash.

RobStaffs

RPI now at 5.6%..with wage inflation well below this..Seems like the BoE are not overly concerned about this level as it heavily influenced so we are told by fuel and VAT rises which will drop out soon enough.Seems the high unemployment is preventing higher demands for pay rises..