Economy crash =/= stock market crash?

lozzy1965

Zola. said:

Who's interested in the FTSE 100?  

Me   Well at least a little bit.  And it's up 1.31% as I type!  Using some of the logic in this thread that is probably the start of a bull run!

Zola.

I suppose I am too by proxy of the good old life strategy fund... 

Type_45

Zola. said:

I suppose I am too by proxy of the good old life strategy fund... 

VLS was my favourite too back when equities were guaranteed to make money. 

Zola.

They are the closest thing to a sure thing we have if you are patient and don't pay attention to the noise.

Type_45

Zola. said:

They are the closest thing to a sure thing we have if you are patient and don't pay attention to the noise.

There's certainly plenty of noise in a crack up boom.

sevenhills

Prism said:

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

This article is from the USA but very applicable to our Government too.

https://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/

The Government use CPI inflation to increase benefits and pensions, but the use RPI when increasing train fares and student loans.
Many people have seen 10% of their expenditure (energy bills) increase by 100%, which is a 10% increase on its own.

masonic

sevenhills said:

Many people have seen 10% of their expenditure (energy bills) increase by 100%, which is a 10% increase on its own.

This is the inherent trouble with any inflation index. Some people spend 5% of their expenditure on energy, some 10%, perhaps some as high as 20%. Food, fuel, rent/mortgage interest, etc, all make up different proportions of people's outgoings. Your personal inflation figure is the one that matters and can be higher or lower than the various official figures. But the official figure should reflect the aggregate consumption of items that are being measured. It is worthwhile to track spending and come up with your own price index - if it turns out to be similar to an official index, then great, but many will differ.

sevenhills

masonic said:

Your personal inflation figure is the one that matters and can be higher or lower than the various official figures. But the official figure should reflect the aggregate consumption of items that are being measured.

The RPI measure of inflation does not include the top earners, I believe I read it's the top 4% that it doesn't apply to.
So it's more appropriate for the average person.

https://www.ons.gov.uk/economy/inflationandpriceindices/articles/shortcomingsoftheretailpricesindexasameasureofinflation/2018-03-08

masonic

sevenhills said:

masonic said:

Your personal inflation figure is the one that matters and can be higher or lower than the various official figures. But the official figure should reflect the aggregate consumption of items that are being measured.

The RPI measure of inflation does not include the top earners, I believe I read it's the top 5% that it doesn't apply to.
So it's more appropriate for the average person.

RPIJ was created to solve the issues with RPI averaging and create a robust measure, but that isn't even published anymore. RPI will be dropped once index linked gilts move over to CPI. There will be a very small proportion of people whose personal inflation matches any form of RPI.

sevenhills

masonic said:

There will be a very small proportion of people whose personal inflation matches any form of RPI.

It seems to be oil and energy which is driving inflation, any measure of inflation reflects that being between 5%/15% of persons income will be more accurate than the CPI measure.