Inflation to rise again?

Graham_Devon

Just putting the thought out there really.

Is inflation about to start rising again? I personally feel it may well do, give it a couple of months from now.

Oil is going up again, food is going to increase again, clothes are apparently set to increase again.

Can families take it?

[Deleted User]

yes it will rise and no they cant,i noticed unleaded petrol 4p a litre dearer than a fortnight ago
could we be in for a period of stagflation?

Thrugelmir

One economist has forecast 7% to 9% inflation rates if further QE is unleashed.

Generali

The money supply is falling which is generally a good indicator of which way prices are heading.

Oil prices are up on the year but only by about 10%. As only about 50p of the price of a litre of petrol is oil, that equates to about a 5p or a 3.6% increase in petrol prices. That's not great but it's hardly budget busting.

HAMISH_MCTAVISH

Thrugelmir wrote: »

One economist has forecast 7% to 9% inflation rates if further QE is unleashed.

And back in the real world, thousands of other economists are laughing at him....

The QE that has been "unleashed" so far has been insufficient to prevent a fall in money supply. And a falling money supply is certainly not inflationary.

ManAtHome

Generali wrote: »

The money supply is falling which is generally a good indicator of which way prices are heading.

Maybe numpty question, but didn't UK money supply increase substantially 2002-2007 (when things were apparently NICE), and has been dropping like a brick since 2009 (since when even CPI hasn't been that NICE)?

Maybe global money supply is more relevent than just the UK numbers?

oldvicar

Q: Is inflation about to start rising?
A: On the basis of nothing more than a feeling in my bones and a look at the economic seaweed, I'm not expecting big increases in inflation in the next 2 months, or even the next 6 months. But I'm trying to be prepared for the risk of higher than forecast inflation after that.

Q: Can families take it?
A: Some will, some won't:
* Those dependent on benefits will cope and become relatively better off than the majority in the short term.
* Those with big mortgage debts may see advantage in the medium term, if wages are likely to catch up with inflation but policy has kept interest rates depressed in the meantime.
* Those on modest wages or pensions will feel the pinch ... but they will know how to cope.
* Those with savings in the Building Society will be losers ... but they will cope
* Those with good earnings but spending all they get on expensive/extravagant or even 'ordinary' (for them) lifestyles will be fooked, unless they adapt quickly
* Those with big unsecured debts most likely will be part of the above group, and be doubly fooked.

ruggedtoast

Prices going up and the official inflation figures rising don't always seem to correlate in my experience.

shortchanged_2

This is also of concern http://www.bbc.co.uk/news/business-19213550

Corn prices likely to rise significantly.

That means the price of a packet of Corn Flakes is going to have a significant impact on inflation.

HAMISH_MCTAVISH

shortchanged wrote: »

This is also of concern http://www.bbc.co.uk/news/business-19213550

The US Department of Agriculture (USDA) has slashed its forecasts for corn production and predicted sharp price rises, due to a drought and heatwave destroying much of the country's crop.

You lot will be blaming the drought and heatwave on low rates and QE next......

shortchanged_2

HAMISH_MCTAVISH wrote: »

The US Department of Agriculture (USDA) has slashed its forecasts for corn production and predicted sharp price rises, due to a drought and heatwave destroying much of the country's crop.

You lot will be blaming the drought and heatwave on low rates and QE next......

Well of course.

The Almighty hasn't been getting a very good return on his savings and his pension has been hit by QE so he has decided to vent his fury and wrath on the world.