Inflation rises to 4%

nucastle · 15 Feb 2011 at 10:56

groen said:
Those inflation levels are bogus. They are more like 5-8%. The BOE want inflation, the reason interest rates are so low is because this allows their good friends the banks to get for money free and then lend it to everyone else at 20%. Great deal for them. That is why mr king always looks so happy, cause he is rich and impoverishing everyone else. They aim for inflation, any central planner that admits that they are trying to debase the currency is obviously out to impoverish the country.

<---------------- WHAT HE SAID.

The shocking thing is that most people don't even have a basic clue about what inflation fundamentally is.

Bleek · 15 Feb 2011 at 10:59

Efour2 said:
back to the ballot boxes in september?

It amazes me how people are still trying to pin the past 10 years on the Tories.

Hello?

Participant · 15 Feb 2011 at 11:03

I'm frantically paying into my mortgage, as much as I possibly can every month. I hope the rates stay low of course, as every month they remain at 0.5% is that much more equity in my house, which will translate into a better house when I move.

When to fix is going to be an interesting discussion point over the next 12 months.

Dolph · 15 Feb 2011 at 11:05

rypt said:
Most of the "inflation" in UK has little to do with supply and demand and has more to do with our currency, oil market and tax.

Indeed, which is why raising rates won't stop inflation rising unless it is done specifically to depress the already subdued parts of the economy even further, which are the very parts we need growth in...

still no doubt the usual suspects will be ignoring the labour cause of this issue...

daz · 15 Feb 2011 at 11:06

The biggest issue now is that lots of people on variable mortgages will have no doubt 'adjusted' to their new all time low rate, and as such changed their spending habits to match. When rates do go back up (definitely when, not if) they could be in for a shock.

The problem is the low interest rate at the bank of England, whilst it is being passed on to mortgage holders and to qualifying new mortgages with massive deposits, it is not in any way being passed on to the cost of borrowing with respect to credit cards, business loans, personal loans or other types of finance - the banks seem to be having their cake and eating it, and doing very well out of it as well. Bad debt provisions are down and profits are massively up.

Participant · 15 Feb 2011 at 11:08

daz said:
The biggest issue now is that lots of people on variable mortgages will have no doubt 'adjusted' to their new all time low rate, and as such changed their spending habits to match. When rates do go back up (definitely when, not if) they could be in for a shock.

The problem is the low interest rate at the bank of England, whilst it is being passed on to mortgage holders and to qualifying new mortgages with massive deposits, it is not in any way being passed on to the cost of borrowing with respect to credit cards, business loans, personal loans or other types of finance - the banks seem to be having their cake and eating it, and doing very well out of it as well. Bad debt provisions are down and profits are massively up.

Well the banks are just reflecting the increased risk in the market

.

mmj_uk · 15 Feb 2011 at 11:08

aardvark said:
i like the way increasing inflation is always 'unexpected' - idiots.

Well these are the same 'experts' in power that supposedly never even saw the 2008 implosion coming.

Peter Schiff was predicting the 2008 crunch years in advance when all the other so called experts were laughing him off the TV.

Admiral Huddy · 15 Feb 2011 at 11:09

Robbie G said:
I'm frantically paying into my mortgage, as much as I possibly can every month. I hope the rates stay low of course, as every month they remain at 0.5% is that much more equity in my house, which will translate into a better house when I move.

When to fix is going to be an interesting discussion point over the next 12 months.

I think you are doing the right thing here. Get that capital down and pay less interest over term.

daz said:
the banks seem to be having their cake and eating it, and doing very well out of it as well. Bad debt provisions are down and profits are massively up.

Oh really.. I'll copy this statement down to the dealing room.. They'll enjoy the laugh.

Efour · 15 Feb 2011 at 11:10

Bleek said:
It amazes me how people are still trying to pin the past 10 years on the Tories.

Hello?

I'm not even suggesting that they are to blame, i just think that the mess there is could be handled a little less aggressively in some directions.

Dave · 15 Feb 2011 at 11:16

On the plus side, a 4-pinter of milk in the local Sainsbury's is back down to £1.25 again

daz · 15 Feb 2011 at 11:20

Admiral Huddy said:
Oh really.. I'll copy this statement down to the dealing room.. They'll enjoy the laugh.

Seen Barclays results today? Have a chuckle over those as well.

Admiral Huddy · 15 Feb 2011 at 11:21

daz said:
Seen Barclays results today? Have a chuckle over those as well.

Barclays were never really in trouble..

I hope you're right.. bigger fatter bonus for me

scorza · 15 Feb 2011 at 11:21

rypt said:
Most of the "inflation" in UK has little to do with supply and demand and has more to do with our currency, oil market and tax.

Currency - the pound is stronger now than it was last year. This means are imports are currently cheaper than they would have been last year.

Oil (and other commodities) - yes that has a big impact on inflation and oil consumption doesn't go down by very much (if at all) when interest rates are raised.

Tax - in some circumstances yes. However taxes like income tax will lower inflation, which makes it all the more bizarre why we decided to raise VAT instead of income tax at a time of high inflation.

FYI most of the inflation we have now is being driven by rising food prices caused by global weather events (fires in Russia, drought in China), soaring demand in emerging economies and the recent deregulation of the food market which now shamefully allows speculators to make money by artificially raising the price of food.

[FnG]magnolia · 15 Feb 2011 at 11:29

Robbie G said:
I'm frantically paying into my mortgage, as much as I possibly can every month. I hope the rates stay low of course, as every month they remain at 0.5% is that much more equity in my house, which will translate into a better house when I move.

When to fix is going to be an interesting discussion point over the next 12 months.

Are you telling me that a 0.5% mortgage rate is available in the UK?

You have got to be ******** me.

daz · 15 Feb 2011 at 11:31

Admiral Huddy said:
Barclays were never really in trouble..

I hope you're right.. bigger fatter bonus for me

Looks like there's speculation that the other banks are doing OK after Barclays results as well though. Lloyds Banking Group up 2% this morning.

Healthy banks are very important for a healthy economy, don't get me wrong I'm not "attacking" them, just explaining what I think is the problem to furthering growth in the UK (which in my opinion is the largely exorbitant interest rates charged on finance other than mortgages at the moment for a lot of people and businesses).

daz · 15 Feb 2011 at 11:33

[FnG]magnolia;18470554 said:
Are you telling me that a 0.5% mortgage rate is available in the UK?

You have got to be ******** me.

Some people have tracker mortgages will will be base rate + 2% (for instance) so people will be paying very little on the interest portion of their mortgage at the moment if they have such a mortgage.

Richie · 15 Feb 2011 at 11:34

Robbie G said:
I'm frantically paying into my mortgage, as much as I possibly can every month. I hope the rates stay low of course, as every month they remain at 0.5% is that much more equity in my house, which will translate into a better house when I move.

When to fix is going to be an interesting discussion point over the next 12 months.

I fixed mine for 5 years back in 2007 as it was my first mortgage and wanted to keep things stable to begin with

No doubt, when my fixed period is up in 2012, the rates will be high :rolleyes:

I have learnt a lot of things in the past 2-3 years (and I don't just mean about mortgages). If I only knew them 5 or so years ago.

Participant · 15 Feb 2011 at 11:35

[FnG]magnolia;18470554 said:
Are you telling me that a 0.5% mortgage rate is available in the UK?

You have got to be ******** me.

Sorry no, the 0.5% is base, mine is that +2%. Currently paying double the minimum each month. Slightly painful but worth it. The best thing is we were just about to fix at 5% when the rates started plummeting

. It was around the time that everyone was saying 'fix now fix now fix now!!!'.

Jez · 15 Feb 2011 at 11:37

[FnG]magnolia;18470554 said:
Are you telling me that a 0.5% mortgage rate is available in the UK?

You have got to be ******** me.

No, not now. Thousands are sitting on trackers which were agreed at base or near as damnit though, back when base was higher. I know several people on rates slightly under which at current rates mean an effecive 0% mortgage.

Deals for a typical 60% LTV product sit around 1.7-2.5% over base now. I am currently paying 2.19% for example (1.69% over).

Jez · 15 Feb 2011 at 11:39

Richie said:
I fixed mine for 5 years back in 2007 as it was my first mortgage and wanted to keep things stable to begin with

No doubt, when my fixed period is up in 2012, the rates will be high

I have learnt a lot of things in the past 2-3 years (and I don't just mean about mortgages). If I only knew them 5 or so years ago.

Missed the wagon now. You probably would have been better off paying the ERC as the rates fell. Thats what i did, paid an absolutely colossal ERC which stung, but has saved me tens of thousands since.