Inflation

[gremlin]

Someone on Radio 4 a day or two ago finally pointed out that 4 - 6% is actually normal and anything below 3% is abnormal.

Long may normality reign.

My humble opinion, as very much a lower-middle management bod in a niche bank, is that central banks love to give the image that they are in control, and I suppose they are, inasmuch as a skipper of a ship is at the wheel of a ship being tossed around in a force 10 gale. At best reactionary to events, and making the most of any spells of clear weather to impart a sense of being in command, before being tossed into the maelstrom once again and hoping for the best. Not ideal, but who would you rather have at the wheel? A skipper in possession of the charts and a compass with a training in maritime navigation, or a landscape gardener?

Also, think of the shit storm that's impacted the markets* in the last couple of decades: the collapse of venerable banking institutions due to criminally negligent management, a resulting credit crunch, a global pandemic, huge shifts in the geo-political landscape, a war in Europe's back garden and troublesome militias disrupting global shipping. All of this impacts national and supranational economies, and really all the Bank of England can do is tinker with rates**.


*By the grandiose term 'the markets', I mean of course, virtually everybody on the planet.

**Or print a shit ton of extra cash, but we know that's not a very smart move. Leave that to small scale counterfeiters.

[Count Steer]

Someone on Radio 4 a day or two ago finally pointed out that 4 - 6% is actually normal and anything below 3% is abnormal.

Long may normality reign.

Also, think of the shit storm that's impacted the markets* .......


*By the grandiose term 'the markets', I mean of course, virtually everybody on the planet.

I thought 'the market' was an evil, deep state operation that conspired to ruin Liz Truss's genius economic plans.

Always makes me laugh when people refer to 'the market' like there's some controlling intelligence behind it.

[Mr. Dazzle]

[cheb]

Someone on Radio 4 a day or two ago finally pointed out that 4 - 6% is actually normal and anything below 3% is abnormal.

Long may normality reign.

My humble opinion, as very much a lower-middle management bod in a niche bank, is that central banks love to give the image that they are in control, and I suppose they are, inasmuch as a skipper of a ship is at the wheel of a ship being tossed around in a force 10 gale. At best reactionary to events, and making the most of any spells of clear weather to impart a sense of being in command, before being tossed into the maelstrom once again and hoping for the best. Not ideal, but who would you rather have at the wheel? A skipper in possession of the charts and a compass with a training in maritime navigation, or a landscape gardener?

Also, think of the shit storm that's impacted the markets* in the last couple of decades: the collapse of venerable banking institutions due to criminally negligent management, a resulting credit crunch, a global pandemic, huge shifts in the geo-political landscape, a war in Europe's back garden and troublesome militias disrupting global shipping. All of this impacts national and supranational economies, and really all the Bank of England can do is tinker with rates**.


*By the grandiose term 'the markets', I mean of course, virtually everybody on the planet.

**Or print a shit ton of extra cash, but we know that's not a very smart move. Leave that to small scale counterfeiters.

There was a joke doing the rounds after one of the crashes, something like this: Who's the odd one out: Gordon Brown, Alistair Darling or Terry Wogan?

Wogan, he's the only one with a banking qualification.

[ZRX61]

Over here, Biden continues to blather on about *core inflation* being lower...

Core inflation doesn't include food & energy prices...

[MyLittleStudPony]

I've seen a twitch of life in the old bond markets. The first I've seen for some time. My guess is that interest rates will not come down as soon or by as much as had been expected.

[irie]

I've seen a twitch of life in the old bond markets. The first I've seen for some time. My guess is that interest rates will not come down as soon or by as much as had been expected.

That is exactly what the overwhelming majority of economic commentators are publicly saying.

[JackyJoll]

I've seen a twitch of life in the old bond markets. The first I've seen for some time. My guess is that interest rates will not come down as soon or by as much as had been expected.

Super timing by me then, getting out of bonds last Monday.

[Mr. Dazzle]

Rates went up on several of my savings products this week.

0.02% up, but it was up

[MyLittleStudPony]

I've seen a twitch of life in the old bond markets. The first I've seen for some time. My guess is that interest rates will not come down as soon or by as much as had been expected.

That is exactly what the overwhelming majority of economic commentators are publicly saying.

That would be ideal for me. At least for the next 18 months or so.

Ideally house prices will not start to rise for a similar amount of time. That may be too much to hope for

[irie]

I've seen a twitch of life in the old bond markets. The first I've seen for some time. My guess is that interest rates will not come down as soon or by as much as had been expected.

That is exactly what the overwhelming majority of economic commentators are publicly saying.

That would be ideal for me. At least for the next 18 months or so.

Ideally house prices will not start to rise for a similar amount of time. That may be too much to hope for

"Ideally house prices will not start to rise" for "at least for the next 18 months or so"?

[Potter]

On the subject of rates.

HSBC emailed me this morning to tell me that they've changed their interest rates on fixed term deposits and raised it to 5% over 12 months.
That tells me more about what they reckon interest rates might do over the next year than any of these experts on Yahoo finance.

I also renewed my NS&I one-year fixed term deposit at 4.5%, it's not the best rate but it's fully guaranteed rather than just the £85k guarantee that normal banks give. And half a percent is not that much, so for example half a million at 5% is only £2,500 better a year than 4.5% and that guarantee of fill reimbursement of your capital, no matter what, is definitely worth a couple of grand if you're working with sums like (for example) half a million.

There are opportunities that could get more, property, equities, P2P lending, etc, but having a guarantee is golden IMHO.

[Mr. Dazzle]

Just had a look myself, there are at least a dozen banks offering more than 5% now I can see on my platform...best one is 5.16% AER on 1 year fixed deposits.

Mrs. D was on about buying some Premium Bonds, I think you'd/she'd be daft to do that if you can get those ^ rates on an ISA - which she can.

[Potter]

Mrs. D was on about buying some Premium Bonds, I think you'd/she'd be daft to do that if you can get those ^ rates on an ISA - which she can.

I was having this exact chat with my lad this morning, but what you've got to weigh up with PBs is you do have the chance of winning a million or a hundred grand every month. The odds aren't great but someone wins it every month, so it's going to be someone and if you're in it then it could be you.

So IMHO I'd rather have fifty grand in PBs and getting about 4%-ish, with a chance of winning a life changing amount, rather than fifty grand in an ISA with an extra £500 a year.

Basically, if you can afford to plop fifty grand into an account and just sit there watching it then you can afford to lose the £500 a year and take a chance of winning big.

[Mr. Dazzle]

A very small chance

Lottery player's logic innit. I don't do that either...well, not unless it's over a hundo mil.

Flip side is you might also get buggery nothing on the PBs, whereas the ISA money is guaranteed.

[Potter]

A very small chance

The two people that won a million quid yesterday had a very small chance, but today they're millionaires.

Likewise the one hundred people that won £100,000 and the couple of hundred people that won £50,000, etc.
The odds are low, but like I said someone wins it every month and I bet if you ask them then they'd say they were worth a punt

[Potter]

Basically I'm a Schrodingers Premium Bond winner, every month I'm a grinning millionaire... until NS&I publish the results and I'm not

[Dodgy69]

even the little wins are nice.

[Potter]

In your ideal world what your numbers look like ?

In my fantasy I’d like to see 5.5% base rate and inflation at 2.5%.
Forever.

Then NS&I (I.e. the government) offer an income bond fixed at 4.5% monthly, accessible at 55yrs old and fully guaranteed. Limited to one million per couple, or individual if single.

This would mean that those that have worked hard to save for their future actually have a working solution to help.

[Le_Fromage_Grande]

I've got £100 in Premium Bonds, I've won £200 with them, and I've still got my £100 I started with.