The Cyprus Situation

innovate

MoneySaverLog wrote: »

Guy on Daybreak this morning suggested that Yes it could happen here. ;-(

He is obviously behind the times if he hasn't yet noticed that savers here, incl those with funds below £85K, have been paying for a couple of years already.

IzzyFreedman

So is it true that having money in a bank is a risky investment?

CLAPTON

IzzyFreedman wrote: »

So is it true that having money in a bank is a risky investment?

life is full of risk


since the coalition came to power, inflation has been about 10%
so if you had £1000 in the bank in 2010 it's purchasing power is now about £900 plus a little interest; you have already been 'robbed'.

It's the government stated aim to keep inflation above zero; it's one target they will undoubtedly meet.


But no, it's very unlikely that you actually lose the nominal value of your savings as the government can print as much money as they wish.

grey_gym_sock

CLAPTON wrote: »

since the coalition came to power, inflation has been about 10%
so if you had £1000 in the bank in 2010 it's purchasing power is now about £900 plus a little interest; you have already been 'robbed'.

a little interest? with not much effort, perhaps 8%, less tax at whatever rate applies.

IzzyFreedman

CLAPTON wrote: »

life is full of risk


since the coalition came to power, inflation has been about 10%
so if you had £1000 in the bank in 2010 it's purchasing power is now about £900 plus a little interest; you have already been 'robbed'.

It's the government stated aim to keep inflation above zero; it's one target they will undoubtedly meet.


But no, it's very unlikely that you actually lose the nominal value of your savings as the government can print as much money as they wish.

Really 10%? :eek: Where did you get that from?

CLAPTON

IzzyFreedman wrote: »

Really 10%? :eek: Where did you get that from?

in may 2010 RPI was 223.6
in Feb 2013 RPI was 247.20

increase was therefore 24/223.6 = 10.7%

the equivalent CPI figure is 9.73%

CLAPTON

grey_gym_sock wrote: »

a little interest? with not much effort, perhaps 8%, less tax at whatever rate applies.

I would doubt that as an average for the UK population.

Glen_Clark

I stopped taking notice of the Governments inflation figures when I discovered they excluded housing costs, and included a succession of luxury high tech items that are bound to fall in price then become obsolete so you have to keep bringing in different ones..
I think the price of a litre of diesel is a better guide as its a constant real value that affects the price of everything; £1.20 in mid 2010, £1.44 now, = 20%

Jegersmart

Glen_Clark wrote: »

I think the price of a litre of diesel is a better guide as its a constant real value that affects the price of everything; £1.20 in mid 2010, £1.44 now, = 20%

No - not at all - diesel is not linked to inflation in any direct way. It is linked to the price of crude oil on a basic level, but with other factors such as commodity-specific dupply/demand, seasonality and refining factors such as capacity and margins.

J

innovate

Jegersmart wrote: »

No - not at all - diesel is not linked to inflation in any direct way. It is linked to the price of crude oil on a basic level, but with other factors such as commodity-specific dupply/demand, seasonality and refining factors such as capacity and margins.

J

I think you misunderstood - - it wasn't suggested that the price of diesel is directly linke to inflation.

What was said is that the increase in price of diesel over a period of time is probably a better indicator for the level of inflation than any official RPI and CPI figures.

I agree with this - - - for those people who use a lot of diesel. It's not very relevant to me since I don't use much diesel (or petrol).

The personal inflation calculators are a bit more useful for assessing the impact on yourself. http://www.bbc.co.uk/news/business-11331052