Inflation

[Ant]

These experts, they know their onions.....

[Greenman]

According to the Beeb, food inflation went up again in April.
But the 'experts' are still saying it should come down soon.

This time next year Rodney....

......we'll all be wanting to kill billionaires! an they'll all be wondering why!

[irie]

Thus to the contrary I do not share your pessimism about the future performance of the UK economy.

Lol, this aged well Mr Irene.
18 months later and whos your daddy

It's all relative, compare UK economy performance with other European economies.

[DefTrap]

Tell us then mystic meg, what do you see UK inflation and interest rates being by the end of Q2 2024?

Apparently as long as you can 'prove' that the UK is doing better than the EU then that's fine.

[irie]

Tell us then mystic meg, what do you see UK inflation and interest rates being by the end of Q2 2024?

If Threadneedle Street continues its obsession with the Keynsian view of money and in doing so ignores the effect of changes in the velocity of money then I see inflation falling to perhaps 6 percent followed by an almighty growth crash due to high interest rates over-run combined with people's savings running out. In other words, on current form it will ignore reductions in money velocity.

Threadneedle Street considers money supply to be money in circulation whereas in fact it is (money in circulation) x (velocity of money).

Money supply is not only cash.

We will get inflation, we won’t get hyper-inflation on account of us not being Greece.

The tricky part will be keeping inflation under control as they won’t want to increase interest rates.

Four or five percent is enough to cause people to act quite differently with their money, and then a sudden switchback looking for liquidity might increase the velocity of all that newly printed cash.

It is not "cash".

[mangocrazy]

And why say 'Threadneedle Street' when 'BoE' will suffice?

[Kneerly Down]

Is 2% still a sensible target for the BoE, if the lever(s?) it has available to it are not able to achieve that goal in any sensible timeframe?

[Cousin Jack]

Is 2% still a sensible target for the BoE, if the lever(s?) it has available to it are not able to achieve that goal in any sensible timeframe?

More to the point, do the BoE have even a vague idea of how to achieve any target for inflation? They seem quite good at responding to crisis (QE, intervention in the Gilt market) by increasing it.

[Ant]

What I want to know is, where are the angered mob now? Truss got the blame, when the rates went up BEFORE she announced a budget which didn't even come into affect, Sunak stepped in claiming he'd make it all better and it's got worse.

[irie]

I think you might have Kenysian, Monetarist and other theories in a bit of a jumble. You need to google a lot more before you have a chance at sensible discussion.

I could go on but I’d be wasting my evening.

Perhaps you would care to study the Keynsian theory of money supply? Wiki is your friend.

[the_priest]

All I can say is that my bananas cost more and I don't have enough peanuts to pay for them.

Our money is being thinned out in what it can buy and we have the same outgoings that are costing exponentially more, even though we have cut back on how we do things. We don't eat out, never have and never could afford to (except for really special occasions - even that was a push).

I'm okay, mortgage paid off, free house for duty and so am in a cash rich position, but that is all that is keeping us from being cold or hungry. 5 years ago, if this was what we were living through, it would be a very very different story. Mortgage, rent, council taxes, water bills and so on would cripple the cashflow, never mind the cost of food etc.

[Cousin Jack]

Once upon a time a nasty bug was circulating. All sorts of stuff was done to slow the spresd of this bug, and lots of money was thrown to the people to ease the financial problems caused by the bug, and the stuff done to slow it down.

Thwn a war happened, no big deal, wars are always happening. But this was a bit close to home, and some stuff was in short supply, so the price went up. So more money was thrown to the people to ease their problems.

Then stuff started to creep back to normal. And all that money that had been thrown to the people stopped. And the people were unhappy, they liked money being thrown to them, and they wanted it all the time.

Bread and circuses, just like the Romans. And history tells us how that worked out.

[Dodgy69]

It seems very obvious to me, that the retail industry are shafting all of us on their pricing and there's fcuk all we can do about it. At the same time, the government sits on it's arse and does fcuk all about it.

We are shafted everywhere you look, , energy companies, water companies, banks, insurance and the people we vote for allow it all to happen. Fcuk em all.

[Horse]

just like the Romans. And history tells us how that worked out.

An empire that, in various forms, lasted 500 years?

[Cousin Jack]

just like the Romans. And history tells us how that worked out.

An empire that, in various forms, lasted 500 years?

And Rome was funded by that empire. When it decayed Rome fell.

We had an empire, and did well on it. It has decayed to the point that it no longer exists. Our fall is imminent.

[Horse]

just like the Romans. And history tells us how that worked out.

An empire that, in various forms, lasted 500 years?

And Rome was funded by that empire. When it decayed Rome fell.

We had an empire, and did well on it. It has decayed to the point that it no longer exists. Our fall is imminent.

I used that example in jest, but looked at Wiki.

Incredibly, that definition extends to:

With the fall of Ravenna to the Germanic Herulians and the deposition of Romulus Augustus in 476 by Odoacer, the Western Roman Empire finally collapsed. The Eastern Roman Empire survived for another millennium with Constantinople as sole capital, until the city's fall in 1453.

[Mr. Dazzle]

TBF to Iccy, I did at least listen to him a bit. I'm not gonna say he's the sole reason for my financial decisions, that'd be daft, but his and other observations certainly coloured my thinking

This is why I fixed my mortgage at the end of 2021, it's also a big part of the reason I moved into EV engineering in 2020, right in the middle of lockdown. I suspected an economic shitstorm was coming, based on what "people" were saying, and I figured EVs were as good a place as any to weather it! Turns out that was a smart move, my old place is in the shit.

[Ant]

I thought it was Liz Truss's fault, according to the people who don't like women in charge.

[MyLittleStudPony]

Is anyone else looking to get fixed rate bonds? I got a one year one a few days ago at 6%. I'd like to get a few more. I'm anticipating the BOE base rate to be 1% higher by the end of the year but it's balancing getting the good rate now with probably getting a slightly better one in c.6 months. I guess c.90 day notice accounts are the best interim measure.

[Mr. Dazzle]

I've got a couple of fixed rate savings account, one for 1 year and one for 2. You can get better rates than I am now, I pulled the trigger too early basically Savings and investments are 99% timing right

I do it through Hargreaves Lansdown, they do a (free) platform so you can have bonds and savings through multiple banks all in one place. I've got bonds and savings with half a dozen banks and (obviously) half a dozen accounts but I only "see" one. Way easier.

I should point out I have other products with HL too, so it might not always be free...dunno.