UK Gilt yields turn negative

Pincher

talexuser wrote: »

What's happening to amex cashback? I haven't heard anything from them yet.

Glance to screen right,

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Amex slashes cash back rates.... in News.

bigadaj

Glen_Clark wrote: »

If you think savings rates are bad, look at bonds.
The latest round of money printing has driven 3-4 year UK bond yields down to -0.1%
http://www.bbc.co.uk/news/business-37031793

That's nothing, the Spanish are getting bond issues away at 1% with an even more bankrupt economy.

bowlhead99

Glen_Clark wrote: »

How can you take their inflation statistics seriously when they ignore house prices?

The inflation stats such as CPI try to include a sensible basket of current period expenditure so you can compare it with what your expenditure was in a different period and note the change. It includes, for example, rent.

House prices should not go in consumer price indices if the purpose of the index is to measure the cost of what we consume. The price of a house, tens or hundreds of thousands of pounds, includes a very small element of what we are currently consuming; it is an asset, and instead represents a capitalised value of future consumption over years or decades. What people are willing to pay for an investment asset (and the current financing cost thereof) should not go in an index of consumer prices.

Separately, there are house price statistics and surveys and market interest rates which you can use to determine how house prices have fluctuated. Politicians and BoE talk about both of those things all the time. It is not like they are unaware that they exist or are conning the public into thinking that houses are cheap.

CPI-H, which is not currently a national statistic but is produced by the same people, also includes an estimate /imputation of owner occupied housing cost, though this can be difficult/subjective. Sometimes CPIH is higher than CPI and vice versa. Use that if you like. Or construct your own index of exactly what it is that you want to buy, because a consumer price index is a theoretical construct of a basket of goods and services which will diverge drastically from actual costs incurred by some people.

Glen_Clark

bigadaj wrote: »

That's nothing, the Spanish are getting bond issues away at 1% with an even more bankrupt economy.

Well I don't know much about the Spanish economy, but usually join the thousands of Brits motorhoming/caravanning in Spain in the winter. The most striking thing is the Spanish have got a lot to show for their debts in the form of new infrastructure like roads and housing. (Paradoxically building more housing depresses prices and reduces the balance sheet value, but obviously increases the real value to the country and economy) Wheras I can see little to show for Britain's debts. It all seems to have been spent on consumption.

Glen_Clark

bowlhead99 wrote: »

The inflation stats such as CPI try to include a sensible basket of current period expenditure so you can compare it with what your expenditure was in a different period and note the change. It includes, for example, rent.

House prices should not go in consumer price indices if the purpose of the index is to measure the cost of what we consume. The price of a house, tens or hundreds of thousands of pounds, includes a very small element of what we are currently consuming; it is an asset, and instead represents a capitalised value of future consumption over years or decades. What people are willing to pay for an investment asset (and the current financing cost thereof) should not go in an index of consumer prices.

Separately, there are house price statistics and surveys and market interest rates which you can use to determine how house prices have fluctuated. Politicians and BoE talk about both of those things all the time. It is not like they are unaware that they exist or are conning the public into thinking that houses are cheap.

CPI-H, which is not currently a national statistic but is produced by the same people, also includes an estimate /imputation of owner occupied housing cost, though this can be difficult/subjective. Sometimes CPIH is higher than CPI and vice versa. Use that if you like. Or construct your own index of exactly what it is that you want to buy, because a consumer price index is a theoretical construct of a basket of goods and services which will diverge drastically from actual costs incurred by some people.

So for the increasing number of savers saving for their own home, CPI, RPI etc are irrelevant.

bigadaj

Glen_Clark wrote: »

Well I don't know much about the Spanish economy, but usually join the thousands of Brits motorhoming/caravanning in Spain in the winter. The most striking thing is the Spanish have got a lot to show for their debts in the form of new infrastructure like roads and housing. (Paradoxically building more housing depresses prices and reduces the balance sheet value, but obviously increases the real value to the country and economy) Wheras I can see little to show for Britain's debts. It all seems to have been spent on consumption.

That's quite a surprising comment, Spanish infrastructure has been built primarily financed by British and German contributions into the EU, the debt has been generated largely by welfare payments to the huge numbers of unemployed and retirees, there's no plan to pay this off.

The Spanish are very much closer to default than the British are, yet can still borrow money at near zero interest rates, I'm no particular fan of the U.K. Economy but it has been growing and showing signs of innovation and low employment, Spain is a basket case.

talexuser

Pincher wrote: »

Glance to screen right

Thanks, saw the new rates on amex site but could not see when they applied to existing people. I'm in November too.