Its not even this figure, the core CPI figure ticked up to 5.1% which excludes food, energy, tobacco, alcohol. It shows the fight is not won.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
That's quite high still.
No wonder the markets turned red
Caporegime
Rate cuts still expected despite inflation uptick
Inflation has fallen sharply recently, but ticked up to 4% in the year to December, official figures show.
www.bbc.co.uk
I agree. However, he said the inflation rise was good news. I don't think the current situation is a cause for anyone to celebrate, nor has anyone been making bank on their savings. We're all screwed compared to what a healthy economy looks like.
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Soldato
You should have been happy with your 000000.1% savings rate for the last 15 years mate.
Not only that but he was a Brexiteer.
So he voted to make us all worse off, quite significantly if (as they likely will) long term predictions prove correct.
Yet if we criticise any of them for that decision they get all arsey about it.
I am not even going to mention that it was Truss (who herself was 100% due to the chain of events Brexit triggered) pandering to the same core base that triggered the rise to be as significant as it was as quickly as it was.
yes that’s true. The grass root loves “eating the cake and having it”
Unrealistic expectations.
Slogans and sound bites don’t bring about reality. Haha, brexit means brexit is a good one. I am still waiting for the Brexit windfall from those billions we didn’t have the send to Brussels. And those £350mil/week extra funding to NHS, and our independent legal systems etc etc. lovely promises.
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Soldato
I thought the general consensus, even before the inflation figure was announced, was that cuts weren't expected until Summer 2024 at the earliest anyways... Not sure where this "next month or 2" thing came from 
It seems people are more concerned about base rate coming down than they are about inflation coming down which makes no real sense as its very short termism
It seems people are more concerned about base rate coming down than they are about inflation coming down which makes no real sense as its very short termism
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Soldato
It does make sense when for a lot of people a couple percent extra on the mortgage interest rate will dwarf inflation impacts.
Inflation can be somewhat avoided if you cut your cloth a little, your remortgage can't be.
Also if inflation stays higher then a lot of people will get equivalent pay rises at work. When inflation does then come down later there will have been a large step change in salary.
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Soldato
Well, yes, of course it will if you want to throw around interest rate drops of 2%
Those drops aren't going to do you much good if your employer goes out of business due to inflationary pressures and you dont have a job to pay your mortgage... As I said - its very short termism and narrow viewed.
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Soldato
Sure it can... You cut your cloth to afford the new mortgage by reducing other expenditure
And a lot of people DIDNT get equivalent pay rises at work so they may have been better off if inflation was lower... Also, why would inflation coming down later make a large step change in salary?
Prices are still increasing even with lower inflation.
I thought the general consensus, even before the inflation figure was announced, was that cuts weren't expected until Summer 2024 at the earliest anyways... Not sure where this "next month or 2" thing came from
It seems people are more concerned about base rate coming down than they are about inflation coming down which makes no real sense as its very short termism
Banks are already lowering their mortgage rates (blah blah swap rates, I know) and several have started lowering their saving rates already too. It means the banks are betting on the rates dropping sooner rather than later.
Soldato
Oh, I agree but it was always touted as more mid-2024 but it seems, since the inflation rate news today, people are wondering if the BoE will reduce the rates in Feb/March and making out that this was always to be the case i.e. not mid 2024 at earliest
Soldato
Sure it can... You cut your cloth to afford the new mortgage by reducing other expenditure
And a lot of people DIDNT get equivalent pay rises at work so they may have been better off if inflation was lower... Also, why would inflation coming down later make a large step change in salary?
Re the first point, it's different for everyone of course but for me I can cut my cloth on food or maybe do a bit less driving to save some fuel, but I wouldn't be able to find enough to suddenly meet say £400 extra in mortgage costs. So I'm certainly more mortgage sensitive than inflation sensitive, because the latter is more controllable, and I suppose I'm fortunate that we typically get annual pay rises around (just under usually) the inflation figure.
The second point, what I meant was that a few years of high inflation and equivalent pay rises would (assuming your workplace didn't go under as you say) probably get you quite a bump up in salary over that time frame.
In the years preceding COVID when inflation was generally low, our pay rises at work were only in the region of 1-2%, which is not that noticeable really. In the last two years we had 5 and 8%, which is very noticeable in your pay packet. Cut the cloth a bit on general goods and services and that can be quite a bit extra each month even with inflation happening.
Yes it's different for lower earners struggling with living costs I agree.
Spend less each month and you have more money left over. Who knew??
Soldato
A period of high inflation forces you to examine it though doesn't it, to think about cutting back some of the excesses that have built up over time.
Sure, but it still makes everyone poorer than they would otherwise have been. Even inflation busting pay rises won't counter the follow on impacts in many cases.
I'm not really sure you understand inflation:
Soldato
I can assure you I do. The point I am making is that if you can make some cuts, then it's possible for your pay rises to be more than inflation is costing you. 8% on a decent salary is a nice bump up in pay, which may be more than the increases youre having to pay out in food or fuel costs for example.
Whereas depending on the size of your mortgage, a big jump in mortgage costs may not be so easily absorbable even with an 8% pay bump.
Two scenarios, which is better for you?
A. Food, fuel and energy inflation at 2%, but headline inflation is at 1%, you get a 1% pay rise.
B. Food, fuel and energy inflation at 4%, but headline inflation driven by say electronics or cigarettes or any number of other things is at 8%, and you get an 8% pay rise.
I would say B is better because you can choose to not buy discretionary items but you can't choose not to buy food fuel or energy, and in scenario B you have got a much bigger pay bump.
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I've had consistent 0% rises for the last two years and thats unlikely to change this year either.8% pay rise...
You talk about that like it's the norm..most people are lucky to get 2% and that was before covid/Ukraine/Gaza... lol
Average pay growth has been as high as 7.2% recently, and it recently dipped to 6.5%, most people are getting more than 2% now.8% pay rise...
You talk about that like it's the norm..most people are lucky to get 2% and that was before covid/Ukraine/Gaza... lol