Is UK inflation becoming a worry?
Discussion
You will have noticed that for a long time, UK governments use the Consumer Price Index for their main inflation communications, although they still like the Retail Price Index for some taxes they receive.
You know why. Increase benefits and pensions using CPI, but for taxes received it is RPI.
The records that I keep remain RPI.
By monitoring the previous 6 months, then multiplying by 2, that can provide an indication of the immediate future trend.
In January 2025, the 6 months (x2) = 2.2%. - - - - - 12 months = 3.6%.
Subsequent 6 month figures have been;
Feb = 2.1%
Mar = 3.4%
Apr = 5.9%
May = 6.1%
Jun = 6.3%
In July 2025 .......the 6 months (x2) = 7.4%. - - - - - 12 months = 4.8%.
I wonder how long this inflation increase will continue?
It is my view that we have much more inflation (or money supply inflation) than is being reported. I’ve been banging on about this for a while. Almost to the point of being an internet bore. But I think it’s important so I’ll keep banging on.
Measuring inflation by looking at the price of a basket of goods from all over the world is not at all accurate unless you're just interested in the price of a basket of goods from all over the world.
I believe that goods have been going down in price up until the last few years. Our currency has been going down in value at a similar pace although it hasn’t really slowed as much as prices recently.
So therefore the reported inflation which measures the relative comparison between the price of a basket of goods from all over the world and our currency seemed stable up until recently because both were dropping in value at around the same rate.
Now that’s stopped.
Our currency is still dropping in value but prices are not so the relative comparison shows this disparity.
We have some control over the strength of our currency but have absolutely no control over worldwide prices.
I believe there is more going on but trying to keep this short. Primarily that debt is now losing value also. Our currency is basically debt. If debt loses value so too does our currency because it is debt.
Measuring inflation by looking at the price of a basket of goods from all over the world is not at all accurate unless you're just interested in the price of a basket of goods from all over the world.
I believe that goods have been going down in price up until the last few years. Our currency has been going down in value at a similar pace although it hasn’t really slowed as much as prices recently.
So therefore the reported inflation which measures the relative comparison between the price of a basket of goods from all over the world and our currency seemed stable up until recently because both were dropping in value at around the same rate.
Now that’s stopped.
Our currency is still dropping in value but prices are not so the relative comparison shows this disparity.
We have some control over the strength of our currency but have absolutely no control over worldwide prices.
I believe there is more going on but trying to keep this short. Primarily that debt is now losing value also. Our currency is basically debt. If debt loses value so too does our currency because it is debt.
200Plus Club said:
Simpo Two said:
Probably for as long as Labour are in power. They're not very good at money.
Just like tories then? I seem to recall they left quite a financial mess.Perhaps Farage next to have a dabble?
The sad thing is that the UK is in a financial mess, full stop. No political party can do anything meaningful about it short of imposing a dictatorship. And so we're likely to slowly slide down the global league tables into an overpopulated bankrupt pothole. Just extrapolate the graphs. Every man for himself.
What’s most concerning is that in the face of rising inflation the Bank of England cut interest rates at the last review.
Whether or not you agree with it being the BoEs job or interest rates the best way to control it is largely irrelevant because that’s what is going to happen.
I don’t for a second think inflation is actually at 4%. It’s a lot higher.
Whether or not you agree with it being the BoEs job or interest rates the best way to control it is largely irrelevant because that’s what is going to happen.
I don’t for a second think inflation is actually at 4%. It’s a lot higher.
In terms of inflation - it will stick. Not according to me but the financial markets.
During torry rule all asset classes were inflated. So housing appreciated which is great which meant that the biggest expense line for 70% of the population increased massively. This is well underestimated in inflation figures.
With Rishi debt we are looking at another lost decade in financial markets. The state has very little ammunition to battle it.
During torry rule all asset classes were inflated. So housing appreciated which is great which meant that the biggest expense line for 70% of the population increased massively. This is well underestimated in inflation figures.
With Rishi debt we are looking at another lost decade in financial markets. The state has very little ammunition to battle it.
@Bluestar - agreed Tories left a mess, but not as much of a mess as we have now.
Like Jon & ATG, i think ( know) the figures are fudged, whether its inflation or otherwise...I was half listening to something a cple of days ago which suggested that GDP has been tweaked (for Pharma) to include manufacturing done by a UK based company overseas.
Think we've gone way past the point where anything any Gov says is credible or truthful - so if they reckon inflation is at 2,3,4%, double it and add a bit for luck.
Like Jon & ATG, i think ( know) the figures are fudged, whether its inflation or otherwise...I was half listening to something a cple of days ago which suggested that GDP has been tweaked (for Pharma) to include manufacturing done by a UK based company overseas.
Think we've gone way past the point where anything any Gov says is credible or truthful - so if they reckon inflation is at 2,3,4%, double it and add a bit for luck.
The way my local Tesco's keep hiking prices I'd say inflation is around 15 percent or more.
Thames Water just raised my bill 40 percent yet the job I left hadn't given anyone a single pay rise in 6 years.
I guess Thames are passing on the fines they got for pumping sewage into the water that I was paying for.
Every year utilities, council taxes and other bills plus public transport goes up by inflation busting amounts.
Inflation isn't 4 percent, hasn't been for a long time.
I'm not an economist, just someone that sees costs of everyday living rising constantly.
Thames Water just raised my bill 40 percent yet the job I left hadn't given anyone a single pay rise in 6 years.
I guess Thames are passing on the fines they got for pumping sewage into the water that I was paying for.
Every year utilities, council taxes and other bills plus public transport goes up by inflation busting amounts.
Inflation isn't 4 percent, hasn't been for a long time.
I'm not an economist, just someone that sees costs of everyday living rising constantly.
croyde said:
The way my local Tesco's keep hiking prices I'd say inflation is around 15 percent or more.
Thames Water just raised my bill 40 percent yet the job I left hadn't given anyone a single pay rise in 6 years.
I guess Thames are passing on the fines they got for pumping sewage into the water that I was paying for.
Every year utilities, council taxes and other bills plus public transport goes up by inflation busting amounts.
Inflation isn't 4 percent, hasn't been for a long time.
I'm not an economist, just someone that sees costs of everyday living rising constantly.
^^^ thatThames Water just raised my bill 40 percent yet the job I left hadn't given anyone a single pay rise in 6 years.
I guess Thames are passing on the fines they got for pumping sewage into the water that I was paying for.
Every year utilities, council taxes and other bills plus public transport goes up by inflation busting amounts.
Inflation isn't 4 percent, hasn't been for a long time.
I'm not an economist, just someone that sees costs of everyday living rising constantly.
The official figures are a load of old pony.
The things I actually buy in the supermarket are shooting up in price or shrinking in size or both.
My mortgage has just gone from 1.5% to just under 4% so my personal inflation and millions of others(who have a mortgage or even rent)is much higher than any quoted figures. If I looked at my living costs in September 25 vs living costs in September 24 it would be painful with water bills up 25%, gas and electricity up, food etc I reckon i would be spending 10% more just to pay for the same stuff or even more.
I’m lucky, this will be my last ever mortgage and I can afford the rises because I’ve always lived well with my means(GT3 not R/S, joking) but I have no idea how half of the country is affording holidays, new cars etc. 1% pay rise last year and expect the same again and I won’t be alone.
I’m lucky, this will be my last ever mortgage and I can afford the rises because I’ve always lived well with my means(GT3 not R/S, joking) but I have no idea how half of the country is affording holidays, new cars etc. 1% pay rise last year and expect the same again and I won’t be alone.
The thing is, even if you get a 5% pay rise you’re not seeing all of that. You could be seeing as little as a 2% rise after tax - not much use if your expenses have gone up 10%.
If you told me inflation was running at 15-20% I would believe you. It feels like it, particularly for food.
If you told me inflation was running at 15-20% I would believe you. It feels like it, particularly for food.
ooid said:
Between 2014-2019, Inflation averaged 1.5% a year.
Between 2019-2024, Inflation averaged 4.4% a year.
According to CPI*
Last budget, definitely did not help with the inflation!
Between 2019-2024, Inflation averaged 4.4% a year.
According to CPI*
Last budget, definitely did not help with the inflation!
Thank you all for joining this discussion.
Any seniors amongst us will remember the 1970s.
RPI exceeded 20%.
High inflation can occasionally help;
People with mortgages;
Provided they kept their job and secondly could afford the higher mortgage interest payments.
The mortgage debt reduces in monetary value.
Governments;
Debt reduces in monetary value.
For many others, high inflation is awful.
One aspect is the diminishing value of cash savings.
Food shop is starting to take the piss, a year ago we would rarely spend over £100 for a weekly shop, now it’s getting hard to get everything we need for less than £125. I had a pretty decent pay rise a year ago after a promotion but I don’t feel any better off. If I was still on the same wages we would be struggling tbh.
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