Inflation

SouthCoastBoy

As I have said many times on here and for quite a while, I think high inflation is here for the next few years, and have factored it into my spreadsheets, 10, 12, 10, 8, 6 over the next 5 years. I don't see inflation being a one year spike

Albermarle

Sea_Shell said:

Thanks guys.  @QrizB - I should have got that, as DH has used the index figures to apply to his DB pensions (before inflation breached the cap!), and we used to have an inflation linked savings account!!   I'd forgotten it actually being an index.

Lets hope that the prices have "topped out" so to speak, as it sounds pretty much like they are baked in now.  Lets hope we don't have 10% on top of 10% next year....which seems entirely possible the way prices seem to be going. 

Maybe individual things (like fuel) will drop off by a large chunk, but that's only possible if world situations change.

So, if, by some miracle, next year inflation is "only" 3%, the PTB be patting themselves on the back, of how well they've done, but that figure is "built on giants", and higher prices are here to stay....just not as high as they might otherwise have been.

It's not a pretty picture is it. 

For most people there are some at least partly mitigating factors. State pensions and benefits increase with inflation, albeit with a time lag. Most people will get some kind of pay rise, and shortage of labour in some sectors means they may well be in line with inflation. Private sector DB pensions will get a rise of 2.5% to 5% and public sector pensions will increase by the full amount.
Plus cost of living/ extra fuel bill help for the Government.
Of course some will lose out more than others. So not a pretty picture, but if it peaks in 2022 and then drops off, then maybe not the end of the world. If it does not drop off and even increases, then that is definitely not good news.

dogbower

So cash in the bank is, loosing its buying power by inflation amount.
Stock market is uncertain.
Should we rush out and buy some gold?
 

QrizB

dogbower said:

So cash in the bank is, loosing its buying power by inflation amount.
Stock market is uncertain.
Should we rush out and buy some gold?

Or some Bitcoin, or maybe some tulip bulbs ...

The stock market is *always* uncertain. Current times are no more or less uncertain than previous ones.

Albermarle

So cash in the bank is, loosing its buying power by inflation amount. Nothing new with this, just worse than usual.
Stock market is uncertain. As always.
Should we rush out and buy some gold? Probably about a year too late 

Probably the best strategy is to just to accept 2022 is not a good year for finances, and look for some light at the end of the tunnel for 2023. In recent weeks, oil and gas prices are edging down and stock markets are edging up. Maybe some green shoots ?