Economy crash =/= stock market crash?

Type_45

CPI inflation will be 9% or 10% in September.

Prism

Type_45 said:

CPI inflation will be 9% or 10% in September.

I think that is unlikely. The energy price increases which have been a big factor in pushing up inflation happened last summer. By the time we get to September most of that will have been baked into last years figures. The gas price is cheaper now than it was last October for example. 

It also doesn't seem that huge pay rises are actually happening, and without that the inflation can't really stick. Its not as though people have a ton of free cash to spend anymore. Interest rate rises will likely limit the rise in house prices.

I would think a bit more pain yet but then from August it will start to be a more normal increase.

masonic

Prism said:

Type_45 said:

CPI inflation will be 9% or 10% in September.

I think that is unlikely. The energy price increases which have been a big factor in pushing up inflation happened last summer. By the time we get to September most of that will have been baked into last years figures. The gas price is cheaper now than it was last October for example.

The reduction in wholesale gas price is a seasonal effect though. As soon as people start putting their heating on again, we'll see the current glut quickly dissipate. We don't seem to be doing very much to build up our stored reserves. The new price cap is now known and will have a similar effect as the jump in the index in April, so I would guess October to be the peak for CPI.

sevenhills

Type_45 said:

CPI inflation will be 9% or 10% in September.

RPI inflation is already 11.1%, which is a more accurate measure of inflation for the average person with housing costs.
RPI inflation does not include the really wealthy and CPI does not include rental costs, council tax and general housing costs.

Prism

sevenhills said:

Type_45 said:

CPI inflation will be 9% or 10% in September.

RPI inflation is already 11.1%, which is a more accurate measure of inflation for the average person with housing costs.
RPI inflation does not include the really wealthy and CPI does not include rental costs, council tax and general housing costs.

Surely CPIH is the main measure including housing costs. We don't really use the other two.

Type_45

FTSE 100 down 1.06% to start the day.

masonic

Type_45 said:

FTSE 100 down 1.06% to start the day.

SMT down another 3.7%, so it will be interesting to see where the S&P500 opens. Could enter bear market territory today.

Swipe

You guys are actually taking pleasure in this? 

Expotter

Swipe said:

You guys are actually taking pleasure in this? 

I'm not enjoying it, actually getting scared now. The Fed and Bank of England due to increase interest rates this week, will that make it even worse as it makes a recession even more likely? I'm not a seasoned investor, just an ordinary peasant with a shrinking pension pot, from which I was planning on taking a lump sum this financial year in order to use my annual tax allowance. Not looking good now as I'd probably just end up crystallising any losses, might end up not being worth it for the £2500 or so I'd save in tax. Any advice?

[Deleted User]

BOE will put interest rates up to 2% by end of year so claims the press.

https://news.sky.com/story/shock-contraction-of-0-3-for-economy-in-april-as-cbi-demands-vital-actions-to-prevent-recession-12632893
Shock contraction of 0.3% for UK economy in April as CBI demands 'vital actions' to prevent recession