Are you worried about inflation?

Its like a ticking time bomb left by the NuLiebours on their way out to scupper the new in-commers.
They printed 50 billion quid out of thin air.
Of course that devalued Sterling and there are going to be consequences because of it.
The artifically low interest rates aren't helping; money is scarce at the moment, but if you have savings you are getting nothing for 'lending' them to the bank. Totally topsy turvey and I feel sorry for all the old people trying to live off the interest on their savings.

Pay cut of 5% to help keep the company afloat, inflation at 3.7% means that I am nearly 9% worse off than last year!

It needs to stop soon, but I fear this is the tip of the iceberg.....

I'm only worried about inflation in combination with other factors.

I'm on less than £20,000 pa.

I think its highly likely that if, as expected VAT rises to 20% along with the current trend of price increases, then I'm going to be struggling a bit to meet all my commitments.

Still, there's a lot of people in the same position or worse and the government has to sort out the deficit asap or things could get even worse.

So i'll just muddle through and keep smilling I suppose.

Well what what you expect with such ridiculously low interest rates and the failing value of the pound? The Bank of England need to raise interest rates, while the Government cut the Public sector deficit by lots more than 6 billion, which should pave the way for modest tax cuts.

Normally an inflation figure this high would be worrying. However we get the new budget next month. Inevitable cuts will follow, in terms of jobs, increased taxes, probably including VAT, a scaling back of benefits and handouts, local services, etc . Once all of this starts to bite ,inflation will drop away dramatically. By far the more worrying aspect is that the severity of cutbacks will be so bad as to tip the UK back into recession. I just hope that the new government will be able to find this precarious balance , for everyone's sake.....

The only time to get worried is when interest rates start to rise again.

Knee-jerk reactions are the actions of jerks.

I am worried that the price of fuel, which appears to have the biggest influence on the rate of inflation at present, is not causing daily protest from all sides, including our politians. The price of crude oil has fallen 20% so far this month, yet the price at the pump is still at a record high. Just a welcome couple of pence reduction per litre with immediate effect would give the economy a boost in so many ways, yet there seems to be a conspiracy of silence. I suppose the tax income from fuel is seen as a life raft right now, but that raft is simply being over-inflated as present!!

Another New Labour legacy. High inflation, low savings rates, national debt rates similar to Greece and Ireland, to name but a few.

Too right I'm worried, worried that this country of ours will be suffering for decades because of G.B's arrogance and incompetance.

I am thoroughly sceptical towards the figures, since it basket of items that are used to calculate the figures are pretty meaningless to my expenditure patterns.

I don't buy cigs or alcohol in UK, don't buy package holidays or airline tickets (except for business) and certainly don't buy every new communications and electrical gadget that's going.

I do however buy food and fuel, and I suspect that because my buying patterns are skewed in these areas my inflation rate is a good deal higher than the CPI or RPI suggests.

The volcanic ash scenario is one of the biggest con-tricks to be played on people, next to global warming. Of course, it is being used as an excuse to raise food prices, "oh but there was disruption, someone has to pay for it".....and guess who that someone is? YOU! (or us). Havent as yet noticed much change in the prices of anything, but no doubt something will turn up; as it is, I've got my own vegetables and don't buy alcohol or fancy nitpicky foodstuffs, so will be one of the group of people that just toughs it out.

Of course we should worry about inflation, most of us have had to take pay cuts or no pay rises over last couple of years just to keep our jobs. Plus we are not protected like public services with their index linked pensions and pay rises.

Since I've been on a pay freeze since mid '08 due to the 'current economic climate', yes.

If the EU control/curbing of hedge funds comes about soon, then the price of commodities (oil for example) that currently pushes up daily cost of fuel and goods, should be reduced due to curb on unfair price speculation by a few get rich quick traders, so it should help to drive inflation down too

The steep decline in the exchange value of sterling which occurred at the end of 2008 will still be coming through as increases in the prices of imported goods. This inflation is necessary to re-balance the UK economy towards manufacturing and away from financial services. It will encourage import substitution and more will probably be required in coming months. It would be a serious mistake if the BoE were to increase interest rates in response to this inflation figure.

Last September when pensions etc. were assessed it was less than ZERO.
Guess what will it be next September.

'Are you worried about inflation'? Absolutely - yes.

Unfortunately, it appears that CPI and RPI have 'morphed' into the same monster with two heads?

Bearing in mind that money markets operate on 'sentiment' - perhaps we should look again at how inflation figures are determined?

What can't be ignored, sadly, is that VAT is perhaps THE most inflationary tax ever invented? Just because certain goods are 'VAT-exempt' at point of purchase - it's a 'con' because we forget that a whole chain and many layers of VAT have been applied before it hits the shops?

Furthermore, we have to pay VAT on basic needs such as gas, electricity and 'phone bills/'phone lines.

UK economic performance, relative to global competitors, has been declining since late 1870s. The oil 'saved' the economy yet made sterling a petrocurrency. Revenues were bolstered by oil. This 'hid' the reality the economy became too reliant on financial services. These services are transferable overseas. The UK economy is too weak to globally compete, this recognised by financiers who see theUK attempt to retain standards of living, based on past economics, yet cannot do so as the UK has little to sell to cover revenue declines from finance service decline and oil. Govts tried to 'cover' reality to appease the voters.

Hopefully we can now get rid of the silly Consumer Prices Index (another Labour fudge) and concerntrate on the Retail Prices Index. How ludicrous to exclude housing costs from measuring inflation (just like counting as unemployed only those claiming benefit).

Inflation will continue to rise, until such time as the Bank of England raises interest rates. That will happen before too long, to attract the foreign capital we need to fund our huge national debt.

Tough, very tough times ahead, on all financial fronts. But, it's inevitable given the complete ineptitude of the last administration. Anyone who complains, seeking to blame / criticise the current Government, is living in cloud-cuckoo land.

I make a point of not worrying about things that I have no control over. It makes for a much easier life.

Looks like the inflation figure is being affected by most things outside of our control. Oil prices manipulated by speculation, environmental factors, the English obsession with regarding their home as an investment vehicle.
As our manufacturing sector is such a small part of our economy, the falling value of the pound makes our imports more expensive, we don't make enough stuff to export to take advantage of that.
We face a dogmatic response, cut public spending, raise interest rates, raise VAT, welcome stagflation.

These figures are no surprise.
Inflation in real terms is far higher.
Pay has been held back for nearly a decade for the average man in the street so businesses can rake in the profit and feed the greed of the stock market.
The government hasn't helped either as they continually think that the answer to any problem is to increase tax. Road fuel prices now mean that our transport companies can't compete with foreign operators and these cost sre past on to businesses in the Uk who are being squeezed beyond belief.
A message to Clegg, campbell and Osbourne...cut the taxes now for the sake of the general public, UK industry and the economy. Put cahback into our pockets and let us invest and think of our future and also spend in the high street helping the economy get back to somewhere near normality.

Mmmm let me see - what lessons can we draw from history? I seem to recall, from my history lessons that very similar political and economic smoke and mirror tricks were employed by some very nice chaps in Germany sometime before WW2! Now, I would not want to worry anyone unduly, but we all know how that little experiment ended! And I do not even own a wheel barrow!

RPI inflation since September 2008 is only 2 per cent - that is less than 1.3 per cent per year over the period. We have a spike in the annual rate now only because of the slump (and temporary deflation) in late 2008 and 2009. It is ridiculous to talk about inflation taking off on the basis of these distorted figures.

An article yesterday stated that the average person in the UK has 5 times more wealth than in 1990.

How much did someone pay for that little snippet, in 1990 my house was worth £43,000, it's now worth in the region of £200,000, how many chimps with calculators was used to do that sum then.

And this shows inflation is based on ridiculous house prices, inflated by the greedy merchants of the money world.

Any other product is cheaper by comparison, oh except the items the government tax heavily to reap in the money - the only real inflation is tax.

Yes we all should be worried. Many workers have had no pay increase or even taken a pay cut. I personally am unemployed and having to live off savings. 3.7% Inflation in these circumstances means that effectively living standards have fallen.
When you then take into account the forthcoming tax increases most people in the UK are significantly worse off than they were ten years ago.
A large part of the inflation increase is due to the fall in the exchange rate which has meant imports are much more expensive, particularly oil. It will fall back a little in the short term, but longer term as the world economy recovers it is likely to increase further with further falls in our living standards.

Those in full time employment should think themselves very greatful for the salary payment at the end of the month!

Inflation is bad for us all but 10x worse for those with little or no income!

Price rises have most definitely affected me and sadly very much so on essentials. Living in a rural area the car is a necessity and petrol prices are really hard to meet. A lot of food items have also gone up by a large amount and many seem to have shrunk in size/content.

Over the last thirteen years I have seen my council tax rise by 70% and I have felt the cost of the numerous stealth taxes introduced.

Probably in common with many other people I haven't had a pay rise for 2 years so the reality is I am getting to be worse and worse off as time goes on.

Due to the state the economy is in the value of the pound has dropped heavily. To sort out the mess left by the outgoing government the new government will inevitably have to take even more from all of us one way or another so things are looking bleak.

5. At 12:31pm on 18 May 2010, warriorsottovoce wrote:
Normally an inflation figure this high would be worrying. However we get the new budget next month. Inevitable cuts will follow, in terms of jobs, increased taxes, probably including VAT, a scaling back of benefits and handouts, local services, etc . Once all of this starts to bite ,inflation will drop away dramatically. By far the more worrying aspect is that the severity of cutbacks will be so bad as to tip the UK back into recession. I just hope that the new government will be able to find this precarious balance , for everyone's sake.....


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A vat increase will actually increase inflation, as all goods that have vat charged on them will cost more, no inflation will actually go up. It will take 12 months for an increase to feed through the figures.

The cutbacks you have mentioned, do not necessarily reduce inflation. They will just cut back demand. Companies may therefore be forced to reduce prices, however most aren't making money now so will find it difficult. What is more important is the exchange rate, and what happens in the wider world economy. If the exchange rate worses items purchased from abroad such as oil and other commodities will increase in price, and have to be passed on to customers

Labour always intended to inflate away their shocking debt. The trouble is, inflation will take away all your savings and pensions (as well as mine).

Nobody who acts responsibly and saves for the future should be treated in this way but that is what is happening and it is in line with the destructive Labour principle of rewarding those who take no care for their own future out of the wallets of those who do.

Gordon Brown et al need to be held accountable for their disastrous period in office, the effects of which will last for our lifetimes. I'd start by confiscating T Blair's outrageous riches.

UK inflation is now unchecked, and the only 'lever' that the Monetary Policy Committee has (the base interest rate) is ineffective because - at 0.5 percent - it no longer influences actual interest rates for savers or borrowers.

I don't think this happened by accident. Labour wanted rates held down, because unchecked inflation then erodes the real cost of servicing debt (yours and theirs), at the expense of savers - who Gordon Brown used to call the "prudent". In essence, a deliberate government policy of wealth redistribution from those who were careful and responsible, to those who were not.

And let's not forget what got us in this mess in the first place: it's fashionable to blame the greedy bankers, but actually we all need to take responsibility for our individual levels of indebtedness. It's less fashionable to talk about the people who lied on their self-cert mortgage applications, and who live on imagined wealth that is nothing more than the inflated value of their home. [sound of bubbles bursting, amid much weeping and wailing...]

Inflation needs fixing if we're not going to return to the run-away economics of the 1970s - so let's nudge interest rates back up a bit, discouraging further borrowing and encouraging saving: but I guess there's a whole debt-laden generation who have only ever lived with the current "economics of the madhouse", who probably think it's alright, and would claim they could never possibly save a single penny anyway...

ah, that explains why my bank tried to get me to switch to a variable rate mortgage last week, thery know inflation is rising therefore interest rates will rise to counter it. Think I'll stick with my fixed rate thanks......

Anyone who has a pension pot,who saves and who doesn't just spend their salary as soon as they get it,should be worried about higher than forecasted inflation figures. However,congratulating myself,it's obvious thatwhen you have quantitive easing like we had recently that the inflation rateS would rise and now they have risen. Why is that far too many of the British do not have any understanding about how our economy works?I know that economics is not an exact science and that economic theory has different analysis depending on which theory is followed but surely any decent and ordinary citizen of this country should be worried about an above forecast inflation rate. There are several types of inflation but it is not an economics lecture that I give here.All I do say,IS EACH AND EVERY ONE OF US NEEDS TO WORRY ABOUT INFLATION.

This comment was removed because the moderators found it broke the house rules. Explain.

So the ash cloud is to blame for higher food prices. How come a few weeks ago at the height of the ash cloud flight cancellations when Justin Rose the chief executive of Sainsburys was asked on BBC news what impact the problems were having, he said very little as only a tiny proportion of food was flown in, most came by ship. So is it once again, any excuse to raise prices. One further point, surely if inflation is becoming a problem, the last thing the government should do is increase VAT, this will add fuel to the fire, with all the subsequent higher wage demands based on the rising prices.

Its too low as I spend so much money on fuel, I am sure thats risen by more than 3.7% in the last year.

High inflation will mean that the point at which it does not make economic sense to work will be passed for many more people.

First comes inflation, next interest rate rises.

Just remember that a 1% increase in interest rates adds 20% on your monthly mortgage repayments and on the goverments interest repayments!

Ask you self can you afford your mortgage if the monthly interest payments double, (it will only take a few point increase in interest rates!)

I try not to worry about inflation, RPI does have a tendency to fluctuate over the course of a year; however I have noticed an increase in prices. I'm directly affected by the increases in cigarette and alcohol duty and presumably fuel price and duty increases have an impact on the cost of supermarket goods - I've certainly seen an increase in the cost of my monthly shop, despite not having changed my usual list. In addition, I received only a 0.8% increase in salary this year which means I have less to spend and my savings, which are earning virtually no interest, have seen no growth at all. Fortunately I have no debt other than a relatively small mortgage; however with all the cuts in services and increases in taxation that will no doubt be required to dig us out of the mess left by 13 years of the previous government I doubt that my situation will improve any time soon. I imagine that it will get quite a bit worse.

That note left for the new government minister wasn't a joke. There realy is no money left. Even the stuff labour had printed, (which obviously made any we had worth even less), has gone.
The ash cloud has not really made any difference to food prices, unless you can afford the few foods that are flown in. Maybe people will at last go back to eating produce when it is in season, and not expect it to be here all the time

What do you expect when our currency is the joke of the world?

No , because the Credit Crisis took a lot of money out of the economy , which has offset much of the affect of Quantitative Easing. I will only start to worry about inflation if the big unions start demanding inflation busting pay rises for their members , which would set off a vicious cycle as in the 1970s.

I did not take long, less than a week, and inflation starts to rise.

I do hope george osborne was paying attention in his economics classes at eton.

I think that if employers were forced to raise wages in-line with inflation, there should be no worries.

Is it me or is it that every time Mervyn King says inflation is about to go down, it actually goes up?

As inflation goes from strength to strength I feel increasingly like someone watching a train crash about to happen. A number of people are shouting to warn the driver but he is too busy elsewhere to listen. Unfortunately in this instance, as a saver dependent on investment income, I also happen to be a passenger on the train. Those of us who have worked hard to save, never borrowed and provided for our retirement are having to watch as the Bank of England allows a tidal wave of inflation to demolish our financial security. It seems that, whatever the rhetoric, the custodians of our currency would prefer to bail out reckless borrowers and greedy bankers than reward the socially virtuous.

Yes
The vast majority of us have seen Inflation way above any pay rises we may have been awarded over the past 18 months or so. Problem is I do not see it getting better anytime soon - why ? - Print Money, Overspend,Devalue currency, set Interest Rates at all time low thereby further fuelling Money Supply - Simples !! Gordon Brown, the new Iron Chancellor.

There are as always two sides to every story:

Whilst there are undoubtedly negative effects caused by inflation, there can also be positive effects:

Positive effects include a mitigation of economic recessions, and debt relief by reducing the real level of debt.

So in a way, it might not be as bad as it sounds. But then again, it just might!

The two main factors that seem to have the most significant effect on inflation are fuel and house prices. Both these essential commodities have rocketed in price over the past 20 or so years, which wouldn't be a problem if wages had significantly increases to by similar amounts...but they haven't and many of us are left poorer for it.

If this new govt do just one thing I will be reasonably satifisfied - work on a way of bringing fuel and houses prices back down to affordable levels.

Many inflationary factors are government-caused, the worst being the ever greater and disproportionate tax on fuel for motor vehicles. That doesn't just impact you and I every time we fill up, it influences the costs of the transportation of goods... costs which are promptly passed on to the consumer.

The bbc's personal inflation calculator has just calculated that I have +12.3% personal inflation and it does feel like it. I have cut back on everything to the bear minimum; however my biggest outgoing is petrol. The cost of petrol is absolutely crippling and public transport is not a feasible option when you live outside of London (5 hour daily commute is not feasible!). If inflation remains at this rate, I don’t know what I’ll be able to cut back on as I’m out of options.

An amateurish response to Mr.Kings' letter, regerettably. Only served to repeat what he had said and little substance on what he will do about it. However, with increased NI Tax and VATax from Osbourne, the LIECON alliance will furter stifle economic recovery and growth, yet still, amazingly, inrease inflation through hiking these taxes - fuel up, transport up, everything up as a result. The net result? Channcellor gets money but no economic stimulus - well - getting money for nothing - is a bit Tory isn't it? Why should we be suprised. Welcome to the mothballing of the UK.

VAT - an increasingly inflationary tax on those who can least afford it.

Looking at EU Commission site and Europa site on VAT - it appears VAT was invented in France around 1953/4?

VAT was designed in France to unify 'purchase tax' due to French purchase tax evasion?

My father remembered purchase tax in Britain - 8% and 12.50% - depending on the 'luxury' value of consumer goods? But that 'purchase tax' went into UK Treasury.

Now that we all pay VAT, on just about everything (directly and indirectly) - several times over - we have a rough idea where all that VAT goes - otherwise we wouldn't have such a massive deficit - apart from bank bail outs of course - that George Osborne keeps forgetting to mention?

It's time Vince Cable reviewed VAT charged on UK - and re-negotiated our EU Membership charges. Note: Apparently, there are huge funds available for flood stricken communities and farmers that UK didn't claim from EU? Why was that?

We're lucky it isn't higher. We've devalued the £ but because of the Euro crisis, the Euro has devealued even more. If it hadn't, our European import costs would have increased even more.

But as ever, it's the price we pay for an economically incompetent Labour government (how's that for a tautology!). Tax'n'spend, devaluation,inflation.

30. At 1:33pm on 18 May 2010, Alfettaman wrote:
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Alfettaman posted a very pertinent comment. You should all read it.

Well Mr Mod, lets try this:

Volcanic ash blamed for rise in food prices and therefore part cause of inflation.

In what way is that possible since less than 1% of our food is brought in by plane?

I will suggest, and that's all it is, that it's called trading on a lie. It is my belief and not that of the BBC moderators, that some politicians trade on lies and this is now, perhaps and maybe, rubbing off on the supermarkets.

21. At 1:17pm on 18 May 2010, leambloke wrote:
These figures are no surprise.
Inflation in real terms is far higher.
Pay has been held back for nearly a decade for the average man in the street so businesses can rake in the profit and feed the greed of the stock market...
A message to Clegg, campbell and Osbourne...cut the taxes now for the sake of the general public, UK industry and the economy. Put cahback into our pockets and let us invest and think of our future and also spend in the high street helping the economy get back to somewhere near normality
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Spot the oxymoron - "greed of the stock market " and cut taxes and "let us invest".

No return = no investment

If inflation figures are accurate - don't sell your gold!

42. At 2:12pm on 18 May 2010, thelevellers wrote:
I did not take long, less than a week, and inflation starts to rise.

I do hope george osborne was paying attention in his economics classes at eton.

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Not wishing to state the blindingly obvious but:

These are the inflation figures for April - not now. So they apply to Alastair Darling's time in office not George Osbourne's.

The only money the government has is what it can squeeze out of taxpayers and seeing as how the taxpayers have no say in how that money is spent why should we, then, pay taxes?
People who are free are consulted, are asked.
Slaves are told - with penalties for non-compliance.
When we are squeezed until dry and the government has nothing with which to pay the interest on debt, let alone reduce the debt itself, the economy is going to completely collapse and then it won't matter how much money anyone has - it'll make no difference for it will be worth nothing.
Then what? Riots? Probably. And nothing will be done for it is unlikely either the police or military will be operational when the government has run out of funds to pay for them.
Year on year food costs more - not because it has gained in value but because the money becomes worth less and less each year so we need more of it to purchase what we need.
Year on year money becomes worth less and less and unless this decline is stopped, eventually it will become completely worthless.
There is no indication that this decline will be stopped so the outcome is inevitable total collapse.
The banks know this, the government knows this yet, by the use of fake bail-outs and digital stimulus cash which doesn't actually exist they are fooling themselves and the public.
Time to wake up, folks - no use looking to the government for help, we are going to have to help ourselves.
Literally.

As a pensioner relying on interest from a modest amount of savings in order to make ends meet, inflation will hit me harder this time because interest rates are shrinking as fast as prices are rising. My only option is to keep on robbing my savings account until there is nothing left and I have to rely on charity.

So now we know. All that borrowing and quantitative easing that Gordon Brown did was to lull us all into a false sense of security until the election was over.

He knew he would'nt get back in and the whole shoddy caboodle would fall at the feet of a new government. Slash and burn then leave it all behind you.

Inflation is the worst. For he knew the measures he was taking in 2008 would take about two years to show up.

Devious beyond belief and those who were taken in by his quick fix and reassurance that the recovery was underway will be shocked when they see the consequences and what they are being asked to suffer as a result.

Banks and building societies do have enormous funds to pay savers more, but refuse/unable to do so - quoting Libor rates or the colour of an ant in their sugar bowl, blah, blah?

... perhaps they are behaving badly in some kind of 'low savings rate cartel'? Well, that couldn't possibly happen - it's not allowed - but what do you and me know?

Labour has robbed us blind sold us down the river, then left the mess to the next bunch of numpties to sort out. Why do I not believe Mervin? Inflation will remain high to pay for the debt from our savings. Boom and Bust again. They make me sick.

For a Government deep in debt, inflation is a god send, they pay their debts off with de-valued money. Any Government that has spent all it earns and max's out its credit at the same time need pilloring. we have just had 10 years of it, fools who voted them in are not the only ones who will suffer.
Let's hope that the current Bill & Ben act will work together, it would be nice to have MP's whose alligiance is to the country before their party.

A 25% pay cut for all public sector workers and pensioners would be too upsetting. A gradual 5% pay cut over a few years, coupled with a gradual 20% reduction in the value of the money paid appears less harsh, so inflation, by printing money, is the easiest way out.
Prices go up 20% but pay comes down only slightly. It is what comes of electing stupid Labour politicians who think they can go on for ever spending more than they earn from private sector taxpayers.

As one who remembers Inflation at close to 20% and interest rates over 15% the current figure is quite low. However, with an income that will remain frozen for the next two years, at least, I know that I will be worse off in the months and years to come. I can only hope that employers are not forced into paying for rises in salary that they cannot afford, and that workers will accept that they need to justify pay rises by productivity, otherwise we could easily return to the high inflation of the late 1970's.

59. At 2:59pm on 18 May 2010, angryauntie wrote:

You have my sympathy - not suggesting you take any unnecessary risks but if you can get a free consultation with an Independent Financial Advisor , they might be able to guide you into defensive stocks(eg Utilities) that might be worthwhile in the current climate.

do you remember Mr browns comments on economic stability and strength? he used to open with it every time he was in front of a camera, then when it fell apart he blamed the banks.

well it was largely his idea to allow the banks to do what they did, yet about 28% of people voted for him to stay in power.

the legacy of his choices and those made by people under him(when PM) are almost as bad for this country as the second world war!

Oh and for the record the Conservatives will really hurt most people in the coming years and if you are poor get ready to be bled dry in record time. I thought i'd get that one in so when I say 'I told you so' it will be a genuine one

How can this government expect to keep inflation down with the price of fuel escalating, everything we purchase is related to fuel in one way or another.

Like a lot more, I am suffering. The fact is that the RPI seems to be fixed to be as low as possible in September when pension increases are settled. In fact most pensioners are in an inflation world well above the RPI as the white goods which signifcantly lower the index are rarely purchased by the pensioner. I used the BBC do it yourself calculator when the RPI was reckoned to be negative. My inflation was 'only' 6.1% so I started cutting at once and will continue to do so pro tem.

No. Inflation is a very personal thing and the headline rate is rather meaningless. I am spending less money than I was last year simply by shopping around. I am sure that others can do the same.

65 BarryP

I also remember the days of high inflation.

This time it's different. The inflation is not coming through higher wages but is of the imported kind.

Almost everything we now buy is imported and as the value of sterling falls then the costs of these goods and services is rising accordingly.

Sterling has already been devalued by 25% so there is still more inflationary pressure to come.

We are in the worst of worlds as everything we buy is costing more but wages are continuing to fall in value. When interest rates and therefore mortgage rates start rising this is when we will really start to feel the pain.

Are you worried about inflation?

What is the point in worrying about it , I am well used to it by now , EVERY time a Labour government gets into power it ALWAYS leaves the same mess for the Conservatives (this time aided by the Lib Dems) to clean up .

So as the song said "what`s the use of worrying , it never did no good"

Just try to make sure Labour are NEVER returned to do the same again & again , as usual!

Well, if you keep adding ridiculous amounts of tax to fuel, it adds to inflation. So then some bright spark decides that interest rates must rise to bring down inflation.

Reduce the fuel duty therefore means that inflation falls and interest rates can remain on hold. In fact, people may buy more because the transport costs are less, so the exchequer gains anyway.

Can I join the coalition please?

all of you asking for interest rates to go up, are you savers?

If rates do go up then it will hit hard, just remember 1 thing interest rates affect what you pay for your mortgage & high street cards & credit cards so if you want less money in your back pockets then Interest rates is certainly the most effective way to deal with that.

Inflation is being driven by rocketing fuel prices, the government past or present is not responsible for that, blame the greedy oil companies, then there is food, go & check you Tesco's or wherever you shop, check you bill from 6 months ago & then check a recent one, see how much its gone up, thats inflation, i'm sure the shops are loving it.

If rates do go back up by alot we can say goodbye to any recovery because the economy will not handle it.

Vat is expected to go up by 2.5% that will hurt 2.5% dont sound alot, but when you see what you pay vat on which is nearly everything we buy oh thats gonna hit us hard & it will raise substantial revenue for the treasury.

70. At 3:33pm on 18 May 2010, Keith wrote:
No. Inflation is a very personal thing and the headline rate is rather meaningless. I am spending less money than I was last year simply by shopping around. I am sure that others can do the same.

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Good for you.

I must admit I'm spending pretty much the same as last year and haven't really noticed any difference - yet!

Although I'm probably being a little more frugal on fuel when driving, less heavy on the gas as it were.

"42. At 2:12pm on 18 May 2010, thelevellers wrote:

I did not take long, less than a week, and inflation starts to rise.

I do hope george osborne was paying attention in his economics classes at eton."

Oh Come on! - I bet George Osbourne wishes he had got this level of power over inflation.

I rather suspect it has less to do with a week of George Osborne and rather more to do with 13 years of Labour mismanagement.

Grow up, get rid of your class war prejudice and join the rest of us in the real world!

Well there is one thing which is very certain, the inflation figure will be low during the month they use to fix state and public sector pension increases.

Worried pensioner here. Have been ever since GB pumped up spending funded by unsustainable borrowing, and even more when he announced the Zimbabwe option. Pensioners don't have any bargaining power.

We all have a different inflation experience depending on income and lifestyle. Anybody that does the day to day shopping in the real world, not CPI/RPI, and buys petrol or diesel knows whats going on though.

Let's just hope that the madness of the 1970s isn't on it's way back

Don't worry sheeple they will continue to lead you around by your noses playing the all is doom card until you all except the minimum wage, which was why it was introduced in the first place.

re 74 Nigel wrote
1 thing interest rates affect what you pay for your mortgage & high street cards & credit cards

People paying Interest on Credit Cards are only doing so because they have done the same irresponsible thing that the last government did - ie spent money they did not have - I can have little sympathy. However the government spent money that they did not have and one way or another I am going to have to pay for that which I strongly object to.

Well you guys voted them suffer in silence, did we learn nothing from the thatcher years, so Gordon sold the gold hey ! its worth nothing sat in the vault it doesn't earn money unlike the coal mines, the steel works, the gas company, the railways, the housing stock, etc... those however all pooled in a revenue for the country it provided jobs for millions who all paid their taxes on their wages, it provided massive exports, Britain cannot survive on a tax system alone we need something to sell we need another income we need our survival back, so labor have made some mistake's but nothing as bad as the previous party before them, who sold our country in privatization this recession is global, unlike the one the conservatives suffered in the 80's which was Britain alone, cross you fingers guys and hope you survive the con-dem party.

I am slightly concerned at the price of oil, the higher the cost of oil the higher the cost of food, clothing, goods and travel.

Governments need to get together to lobby OPEC on increasing production from the exporting countries. Additionally Governments should step in to place a threshold on some foodstuffs i.e. bread, milk etc to ensure that their prices are held. I happen to know a Manager of a "discount" chain where food is far lower than it is in supermarkets and has been so for quite a while, the main issue with Supermarkets is that they see a market to maximize profits while hitting the retailer. Prime example in a well known supermarket i saw a 400g pack of biscuits on offer for £1.00, right next to them was a 300g pack for £1.35...

I fear moreso what will happen when/if VAT is increased as i recall quite a few shops when VAT was dropped (15%)that put prices up a few weeks before hand and then the VAT hit effectively brought it back down to what it was with the 17.5%. Corporations seemingly hold all the cards, the bigger they are the more they can get away with.

From a political stand point this is quite a typical Conservative occurrence, higher inflation and soon higher interest unless the Lib Dems can halt David Cameron

71. At 3:48pm on 18 May 2010, virtualsilverlady wrote:

I also remember the days of high inflation.

This time it's different. The inflation is not coming through higher wages but is of the imported kind.

Almost everything we now buy is imported and as the value of sterling falls then the costs of these goods and services is rising accordingly.

Sterling has already been devalued by 25% so there is still more inflationary pressure to come.

We are in the worst of worlds as everything we buy is costing more but wages are continuing to fall in value. When interest rates and therefore mortgage rates start rising this is when we will really start to feel the pain.

----------------------------------

I will however (as a euro skeptic) be very happy if the euro continues to fall and then we can survive on the back of the US of europe experiment. If the euro falls that low I will be watching the action of our 'friends'. As they demonstrated with greece, they had to 'debate' helping them.

The only way to fix this whole insane charade is to stop the men in suits dicking about with the money, here's my three part plan;

1. The entire population cashes all savings, ISAs and whatever else and buys gold and silver and other proper commodities with it, when the banks collapse, everyone opens an account with one of the new banks that are formed from the ashes.

2. Repeat step 1 until financial establishments evolve that work for the people, not profit.

3. Retrain all the vultures and spivs that we no longer require to do something that benefits society instead.

Yes
I don’t want 15% interest rates again Lib-Con coalition.
Will give us 20% or 22.5%VAT then Watch inflation rise
Lord Sooty (Cameron) and Sweep (Clegg)
Like the Weather Indicator in Cuckoo Clock

This comment was removed because the moderators found it broke the house rules. Explain.

Of course I am worried about inflation, it comes down just in time for the budget and rises in pensions and benefits but goes up soon after

As pensioners we are terrified,our income is just that little bit above,and so we have to struggle on,its the bills like rates,gas and electric,that scare us,we do appreciate the winter fuel allowance,standing charges on telephones are outrageous.Each year we are told the increases are to be spent improving services ,but we dont see any improvements just bigger bills.water rates are shooting up also.And as for food,meat is so expensive,it has become a complete luxury,basic necessities like bread and milk are also getting out of hand,heavens knows how families with teenagers cope.We spend far to much money on outsiders I am firm believer in charity begins at home

Inflation rises to 75% under Lord sooty & Sweep
SOUP KITCHENS OPEN IN EVERY TOWN IN UK
BUY DRIED FOOD.
FOOD RATIONING ON THE WAY
Lord Sooty (Cameron) and Sweep (Clegg)
SOLD up and GONE SNAF

Inflation hurts everyone except the rich and the bankrupt. It especially hurts those who are struggling on low or fixed incomes - as the cost of living goes up, the harder they will find it to make ends meet. It also hurts those who tried to put some savings aside for retirement or simply in case they lose their job.

With inflation continuing to rise (RPI 5.3% )it looks like we at risk of an era of stagflation (uncontrolled inflation combined with economic stagnation - see Zimbabwe for an extreme example of this). Last year's predictions of falling inflation have, unsurprisingly, failed to materialise and don't really inspire much faith in Mervyn King's projection of inflation going down in a year. Worryingly, this projection also assumes no increase in VAT or 'other price level surprises'.

If public spending is not controlled interest rates will soar because the people lending us the money will lose confidence in our ability to pay them back so they'll increase the rate they charge to lend it.

Add to that all the tax rises we can expect and inflation could be a lot higher soon and that will scupper any economic recovery.

The bottom line is that we have public services we simply can no longer afford. Public services are a luxury of a successful economy. Labour trashed our economy so we can't afford any luxuries. Bye bye public services. You can come back when we can afford you.

Inflation is coming to "everywhere" near you soon! You aint seen nothing yet.Thousands more unemployed,business going to the wall,big hikes in interest rates.Ive seen it many times before but not on the scale likely to follow.The Greens who advocate very expensive fuel(a major inflationary factor) to drive us all onto public transport has one major flaw-its too expensive to travel by bus or train!So eventually nobody will travel unless its absolutely necessary.The result will be even more unemployment on a scale never seen before.The "new"green jobs much spoken about are just so much hot air and will never get off the ground without money-money which is being withdrawn from public spending.Investment in new industry is a myth.There is no money left to fund anything.Ordinary people have less disposable income which is still shrinking and more inflation will shrink that further with no new wage rises.
Its the banks not the pathetic politicians who have got away with bankrupting the people of this country and when things start getting bad they will up sticks and move on and bleat that it was never their fault but someone elses.We will become a third world country in less than a decade and then it wont really matter much anymore whether there is inflation or not-we will all have emigrated or living in the stone age.

Due to low interest rates, (which were the root cause of the situation we find our selves in) through most of NuLiebours term in stealership, savings are worth half what they should have been. Thanks a lot !
Inflation now going to devalue them even more, because they'll be reluctent to increase rates incase the debt ridden default. Marvellous !
So what should we do, spend the lot and when the time comes to retire live on state handouts with free council tax....... hey thats sounds good to me. Now wheres that Holiday directory ?

NuLiebours well stuffed anyone whos tried to provide for themselves.
Maybe that was the plan, to get as many as possible to rely on Liebour handouts, thus guaranteeing votes.
Hope we never see Liebour or what they may call themselves again this side of stardate :2350...

An inevitable result of the toxic combination of QE, low interest rates and a borrowing obsession. It was always going to happen as soon as some lunatic thought you could get out of a debt-created recession by more debt and no attempt to address the real issues. Thank you Gordon Brown the economic miracle worker and saviour. Let's just hope (rather than expect) that the new lot can sort out his mess, and that the large delusional chunk of the population who have helped to create it will finally realise that there's no painless way out of it (otherwise they'll just moan about how they're being picked on when times get harder).

More worried about how the CON DEM's are going to link pensions to pay but say that there's going to be a pay freeze which means pensions will not rise at all, according to their policy. Why couldn't the UK public see this was all going to happen before removing the one party who had a way out of the mess ( that the Bankers created remember). Makes you want to cry sometimes, well you reap what you sow, we are in for a very hard time (remember that when next voting LIB DEM (why vote for one when you can get two at half the increase)

Yes, I'm worried about inflation. I'm worried about our family's food shopping basket that goes up monthly by 2-5%. I'm worried about our (propane) gas bill that's gone up dramatically this year. I'm worried about fuel for the car which is now £1.26 a litre while wholesale prices have dived - but Labour's latest fuel duty and VAT hike is still in place, causing yet more delivery transport inflation costs on everything else.
The blatant profiteering of companies in the manufacture, distribution or storage of our essential food and fuel needs is surely breathtaking. And the increased charges my bank makes to handle our money is nothing short of criminal. How can furniture retailing companies justify the Recommended Retail Prices shown in their stores when all their stock has been selling for 50% Off or less for the past three years?
Is no-one in the new government going to take responsibility for the control of retail prices as a priority adjunct to allowing the elderly, disabled, poor or unemployed members of our society to LIVE rather than just SURVIVE on the pittance incomes they receive?

My food bill has more than doubled in the past 2 years, yet I am buying less.

That is more than 5.3% inflation.

Can we have real figures for inflation, not government massaged figures.

If you want prosperity you need as many people as possible working on activities that customers' want. Measure and try to improve, the total quantity of work-days done divided by population.
This is what you need to:
Make it easy and profitable for people to employ one another by repealing employment laws, heath and safety, regulations, licences and taxes whose original intention was niceness, but whose effect is to discourage employment.
Zero interest rates are the result of there being no point in borrowing money and setting up a business. If it was worth investing in a UK business there would soon be a good and real return on your savings.
Inflation is increased prices because we are not making the goods or services ourselves but just printing money to pay others abroad to make them for us while we sit around, discouraged from employing one another.

********************************
85. At 5:10pm on 18 May 2010, CWRW wrote:
Yes
I don’t want 15% interest rates again Lib-Con coalition.
Will give us 20% or 22.5%VAT then Watch inflation rise
Lord Sooty (Cameron) and Sweep (Clegg)
Like the Weather Indicator in Cuckoo Clock

*********************************************
Me neither but whats the option now ?
Thatcher inherited 27% inflation from the last Labour shower, so had to pursue the painful high interest rate route. Yes I remember doing two jobs to pay the 15.4% mortgauge rate.
Yeah 15.4%! lap that one up you younger members of society. BUT we did get tax relief on the loan, which was a necessity.
Over the various Stealerships we've had for govts over the years, Labour have always been the worst and have always knacked the economy.
God knows what sought of grief Pink & Perky are going to rain down on us now.
Thanks for stuffing me again Labour, once at my start in life and now as I near retirement age.
Couldn't organise a drink in a brewery... oh did I mention, they've helped to finished them of as well.

Of course I'm worried about inflation, especially after the money-printing jamboree Darling and Brown incited. No use claiming this is "temporary" inflation either: it's been temporary for several months now, will only get worse as oil prices rise (which means that everything transported will rise in price).

What it means is that it was doubly NOT worth saving. Not only do we get almost no interest on savings but what value they were will be blotted out by inflation.

I do envy those who don't work and get by on benefits. Labour has ensured those who work, pay their way, save what they can, are again the losers.

You watch. As has happened before inflation will reach double figures before the B of E decides to move itself and do something about it.