UK inflation now 5.1%

Last month it was 4.2% and they predicted it wouldn't hit 5% until April...

 

Corbyn.

 

It wouldn't surprise me to see it pass 6% next year.

The biggest worry will be interest rate rises.

 

The biggest worry is that despite predictions actual earnings aren’t rising.

 

It depends what quarters any wage inflation is coming from.

With such a weak economy thats bumped along for over a decade before the pandemic, theres not a great amount of scope to push wage inflation. The public sector finances aren't in great shape either. So the compound risk is if we see interest rates rise alongside tepid wage rises alongside price rises in core goods and services.

It's going to be a bumpy 2022.

 

It's almost like exiting the largest free market place we were in, shutting the country down for 2 years and printing money like it's going out of fashion aren't consequence free.

Who knew?

 

Pandemic & fuel costs are massive contributors

 

It wouldn't surprise me to see it pass 6% next month.

As for interest rates - it's rock and a hard place time. Historically they're the usual counter to inflation but money has been so cheap for the past decade that many people have never known anything else, and have budgeted based on mortgage payments staying this low. It won't take much of a rise for people to start finding themselves in trouble when they reach the end of their fixed terms, and possibly unable to remortgage and stuck on punishing standard variable rates leading to defaults and repossessions. So there will be a real reluctance to raise rates.

I'm interested to see whether they do bump it to 0.25% tomorrow, or use omicron as an excuse to hold off again.

 

Why is anybody surprised though, it was never going to stay as low as it was.
It never has and as inept as this government has proven to be, whatever government is in an increase at some stage was inevitable.

 

Double figures by now

 

Do they dwarfe the other contributing factors, such as, Brexit and low spending? Genuine question as I don’t have any figures, but I wouldn’t be surprised if they are no more a contributing factor than others

 

I'd be surprised if they increased it in December. I thought the time to up it was likely last month, so that they held off then leads me to think they'll review in January when they have passed the skew of December trading and are looking at what the variant effect may be, as well as the next phase of brexit import controls.

And very much agree re impact on mortgages. There's a significant level of personal debt pent up after a stagnating decade. Yet we've some who have massively benefitted through covid times and boosted savings while the opposite will have occurred for many others.

It feels a rock and a hard place.

 

It’s simple process. If you voted to leave the EU you must never, ever attribute anything to leaving the EU.

…. Unless Nigel cockwomble says so.

 

Sorry to be a pessimist but I think we are likely to see a re-run of the 70s. Probably a "lite" version but no less painful for those at the sharp end: i.e. have a big mortgage plus credit card and other debt.

I hope BOJO can create a "High wage, High Skill ecenomy". unfortunately that would need a big investment in education and is not going to happen overnight.

As has already been said we are in for a rough ride.

 

All i know about is world has struggled with coming through the pandemic & oil prices dropped 10 dollars a barrel about 6 weeks ago but it has never been shown at the pumps & you do not have to be the chancellor to know that the cost of fuel pushes costs up for everything .

 

Aye, but they will still blame labour for it

 

Did I read recently that the 2% rule that banks and building societies are supposed to apply is being abolished? This rule is there to try and ensure that mortgage holders are able to withstand up to a 2% increase in interest rates, based upon disposable income.

 

I think it was a 3% interest rate rise that people had to withstand (could be wrong, but that rings a bell), but yes, its on the cards to be scrapped or watered down.

 

The CPI is around 6%, the problem is the UK economy and population have been living beyond their means most of this century. Started by Brown with cheap credit,leading to the housing boom and bust and negative interest rates in real terms. Consecutive government's do not want individuals and corporations to behave sensibly but rather borrow to purchase. Don't save or invest,spend,spend spend. In a low income town like Barnsley look at the price of housing, both to purchase or rent, as a multiple of average income. 80% of new car purchases are personal lease deals. The country is insolvent ,the politicians and the Bank of England know that even a reasonable increase of 0.5%,will wreak havoc with the economy. The country needs hard but truthful lessons in fiscal economy and not living beyond your means. No politician has the courage to say so,so we continue with the delusional behaviour of the population.
We have been in recession as a country for at least 45 of my 60years and now having left the EU,it will get worse again. Lots of young adults have lived through a time of not saving and cheap credit and low mortgage rates. How will they deal with the inevitable change?
It wouldn't matter as much if wages had risen in line with inflation over the last decade, society could deal with the increase in expenditure. People working for less than £10 per hour or a salary of less than £20,000 per year, as is the norm all around the country, cannot continue. Especially in a country with a high cost of living, where a minority continue to benefit financially, while 4 million people are registered with food banks.
Change has got to come to your country but I doubt I will live long enough to see it.

 

Is there a solvent country out of interest?