Inflation to hit 15%

[onthefencesitter]

www.independent.co.uk/news/business/inflation-bank-england-cost-living-b2137311.html

www.theguardian.com/business/2022/aug/03/uk-inflation-could-reach-15-by-start-of-2023-experts-say

What do you all think?

One thing you can do, if you have a mortgage, is look at your fix to see when it is up.

You can secure a new deal 3 or 6 months before the end of your current fix, depending on which lender you are going for. With everything set to rise, knowing your mortgage will be a set amount for the next 5/10 years is important.

Might even be worth paying an early repayment charge to get out of your current deal, but you'd need to crunch the numbers.

Oh, and the UK also had energy shortages in the early 1970’s under the Heath govt. it all sounds frighteningly similar to the current situation.

we are certainly in a worse place because of Brexit & also the "silver exodus" of workers.

Exactly. Older public sector colleagues remember getting two substantial pay rises a year in the 1970s.

We don't even get a single rise of a few measly percent these days.

Inflation is probably effectively a lot more than 15% already for low to middle income households that spend a large proportion of their income on food (up around 30%+ on average?), gas and electricity (up by so much I've lost count - 300%?) and petrol/diesel (up at least 50%). Plus housing is getting more expensive for all except the mortgage free due to rising interest rates.

do you think house prices will fall? Have listed my flat now and thinking of moving. but in no rush.

Interest rates are going up tomorrow as well.

and not only are prices going up but the sizes of stuff are going down. Was reading about supermarkets cutting a significant percentage of weight of ready meals while also raising prices. I’m sure ready meals won’t be the only thing affected.

Hasn't the threshold for NI just gone up, cancelling out the 1.25% rise? Many who work full time receive top up benefits, I do.

So it’s even worse now? I was born in the 1970’s and haven’t studied them, I just remember my parents telling me they were pretty dire and they struggled to pay their mortgage due to the high interest rates. I vaguely remember my Mum making dinner in candlelight on a camping stove due to blackouts. I really hope we’re not heading towards that again.

Exactly. Older public sector colleagues remember getting two substantial pay rises a year in the 1970s.

wasn’t it part of the problem though which then fed through to very high inflation

So a wage spiral that leads to a crash that needs to be averted?

It was just under 15% in the late 80s. Factor in rate rises when buying or remortgaging.

I've been concerned about the economy since the 07-08 crash. QE never stopped and it only increased over covid. Yes it is complicated and partially a global issue but I do think mistakes have been made.

do you think house prices will fall?

I don't think they can keep growing particularly with higher interest rates. Stagnate for a low time I predict.

I've been concerned about the economy since the 07-08 crash.

imo we never recovered from that crash, look at development & productivity

It was just under 15% in the late 80s. Factor in rate rises when buying or remortgaging.

The trouble is with prices as they are interest rates only need to get to 6% (ish) to have the same impact on incomes as historic high rates had.

Anyone with a brain.

She's a fucking lunatic.

But it seems it is likely to happen?

I'm starting to think bring back Boris..

I think we probably would have been ok without external factors, just normal variables - growth, inflation, interest rates etc

If the war ended tomorrow inflation would probably fall but it’s the sustained situation on top of Covid spending. And the war could continue for a long time (poor people)

It's also to do with Thatcher politics of allowing corporations to prioritise shareholders above all else.

@onthefencesitter I'm not sure. I'm not a financial expert, I just had to remortgage lately and I was shocked at how much of a difference a few % made, and also how quickly mortgage interest rates were going up.

If I were to hazard a guess I would say they will probably stagnate/slightly drop. I could be wrong.

It certainly has not cancelled out the rise!

I think we probably would have been ok without external factors, just normal variables - growth, inflation, interest rates etc

I disagree this was coming because of all the QE, covid & the war has exacerbated it though.

Have you seen this somewhere?

Imo the war is a huge inflationary pressure, Covid was pretty bad to start with. But if you have seen economists say otherwise I’d be interested to read

Interest rates will definitely rise. They are talking about a 0.5% rise tomorrow on the base rate.

inflation could get to +15% easily imo.

Agree re Guardian being scaremongering.

I don't think house prices will crash. Stagnate, possibly.

In the very short term I don't think much will happen to them as there's still far more demand than supply for housing, of course demand would reduce if people are put off by interest rates/losing jobs etc.

Really? It's just gone down by about £400 a year I think?