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CPI is 2%.
grizzly1911
Posts: 9,965 Forumite
In your experience how does this relate to you in your opinion?
Is it about CPI or is it higher or lower?
Is it about CPI or is it higher or lower?
"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
Is your personal "CPI" 2%? 33 votes
CPI +3% or more
39%
13 votes
CPI +2% or more
6%
2 votes
CPI+1% or more
12%
4 votes
CPI
24%
8 votes
CPI -1%
6%
2 votes
CPI - 2% or more
12%
4 votes
0
Comments
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grizzly1911 wrote: »In your experience how does this relate to you in your opinion?
Is it about CPI or is it higher or lower?
My understanding is that CPI not only takes the relative change in cost of a vast basket of goods, it also takes into account the shift in the contents of that shopping basket over time as people choose to (say) drink less alcohol but eat more ready-meals.....
Hence a personal inflation can only be measured by what someone actually spent.
Having budgeted for an increased spend of 3% (2013 to 2012), I ended up spending 4.74% less than in 2012. Hence I was over 9% below budget.
I spent much less on Motoring, General Expenses, Tax, Groceries, and Holidays. I spent more on Utilities and about the same on Purchases .
I had no detectable drop in living standards.0 -
If you choose to use less/more of something then that will affect how much you spend and your personal budget.
Arguably your motoring expenses inflation increase will rise by 100s % come March on that basis.
My insurance fell by 15%(+) but if that is less than say 0.5% of my expenditure it isn't going to make much difference if energy is increasing by 10% on 5% of my expenditure and groceries increase by 5% on 15% of my expenditure."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
I bought some Sirloin Steaks in Waitrose a couple of weeks back at about £ 27 a Kilo, the posh Butcher in the village has some on special offer at £19.99 kilo this week, so for me inflation is "cratering" (in the words of the Schiffter).....also I noticed that Wimbledon Wine Cellar has cases of Chateau La Tour de By 2004 on special so I am quids in this week :j'In nature, there are neither rewards nor punishments - there are Consequences.'0
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grizzly1911 wrote: »If you choose to use less/more of something then that will affect how much you spend and your personal budget.
Arguably your motoring expenses inflation increase will rise by 100s % come March on that basis...
I assume you are referring to my new BMW?
No, that won't cause any major inflation in my motoring expenses. Fuel? Far lower. My Jag is Petrol. The BMW is diesel. Road Tax lower. Insurance? Probably a bit higher. Servicing? Goes down to zero for the next 5 years (included in price). Recovery Insurance? Same thing. Unexpected repairs? Can't happen as under warranty.
Or are you thinking of Capital expenditure? Personally I don't do it that way. Paid cash for the Jag 8 years ago. Since then, I "charge myself" depreciation on an inflation-increasing amount with interest on the 'fund'. This monthly depreciation 'cost' will continue at inflation and so the new car is costing me "nothing". Just a transfer from a 'fund' that I never count as 'assets' into a depreciating asset that I also never count as an 'asset'.
BTW. Much talk of deflation etc.... Seems this is a fantastic time to get a BMW. Perceived wisdom is a negotiable 9% (or so) max on OTR prices. Pure rubbish. I got well over 20%. Back to being cheaper than a Jag, and (in my opinion) a much better car. It's actually a permanently connected GPS phone on wheels.
Pssst... wanna buy a used car?0 -
Loughton_Monkey wrote: »I assume you are referring to my new BMW?
Or are you thinking of Capital expenditure? Personally I don't do it that way. Paid cash for the Jag 8 years ago. Since then, I "charge myself" depreciation on an inflation-increasing amount with interest on the 'fund'. This monthly depreciation 'cost' will continue at inflation and so the new car is costing me "nothing". Just a transfer from a 'fund' that I never count as 'assets' into a depreciating asset that I also never count as an 'asset'.
With bookkeeping like that you ought to have a word in Gideon's ear.
I take it MrsLM believes it too. Yes dear makes economic sense to replace the car, the champagne is in the fridge you know."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
CPI is an index and goes up every month except July (usually)
the annual rate of change in CPI is the 12 month change expressed as a percent
except for the anal few who keep details records of spending, not many people can tell you the price of things 12 months ago
add to that, that most don't average out big ticket items, people's view of what the rate of inflation is always going to be pretty random0 -
grizzly1911 wrote: »With bookkeeping like that you ought to have a word in Gideon's ear.
I take it MrsLM believes it too. Yes dear makes economic sense to replace the car, the champagne is in the fridge you know.
Yes, it's a system I invented. It's called "saving up for something". A novel idea, which no chancellor has ever heard of. I think it's because in the "Chancellorship for Dummies" book, its called 'hypothecation'. Far too difficult a word, so they never use it.
Strangely, the fund also includes £20K plus to replace her car. She is, however, quite happy to drive around in her precious Beetle Luna for the immediate future. But I will continue paying into her 'fund'. Maybe she'll want something more exotic in a few years. Meanwhile I don't complain. Just open the bubbles on demand....
.... large gin & tonics all round....
0 -
Loughton_Monkey wrote: »Yes, it's a system I invented. It's called "saving up for something". A novel idea, which no chancellor has ever heard of. I think it's because in the "Chancellorship for Dummies" book, its called 'hypothecation'. Far too difficult a word, so they never use it.
You are not alone.:)"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
CPI is an index and goes up every month except July (usually)
the annual rate of change in CPI is the 12 month change expressed as a percent
except for the anal few who keep details records of spending, not many people can tell you the price of things 12 months ago
add to that, that most don't average out big ticket items, people's view of what the rate of inflation is always going to be pretty random
Big ticket items don't usually get replaced very often. I could probably dig out the receipts, or at least a price paid, at a push for most things like that. going back many years.
New technology often enters the market at a large premium whilst a fall in price for the consumer is welcome it doesn't necessarily reflect the true rate of decrease.For an early adopter the rate could be very high but there would be no easy comparator because it is new.
For the essential regular things like groceries, fuel, energy, utilities, insurance, rent it is easier to follow whether 2% is a likely reflection or not.
Personal inflation may be a lot lower if an individual chooses to change consumption pattern but that doesn't affect the underlying inflation rate."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Actually I think the CPI calcs do include substitution effects to a certain extent.I think....0
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