PowerSwitch

http://news.bbc.co.uk/1/hi/business/7346037.stm

...prices paid by firms for raw materials rose 20.6% in the past year.

Do the official headline inflation figures mean anything at all?

No one knows what the true rate of inflation is, though most believe it to be greater than the government figure.
I suspect that it is about 10%, and rising. Note that the most recent increases in wholesale food and fuel costs have not yet been reflected in retail prices.

I'd start by looking at the growth rate of the total money supply - ultimately the amount of money (relative to growth in goods to be valued by that new money) will define inflation.

Moadib wrote:I'd start by looking at the growth rate of the total money supply - ultimately the amount of money (relative to growth in goods to be valued by that new money) will define inflation.

It's hard to keep up with it. One the one hand, money is being printed by central banks. On the other, it is disappearing in "write-downs". Looks to me like it teleporting out of private hands into the hands of the central banks.

Looking at my personal rate of inflation, I don't think it's that bad really. Sure food is up a bit - but my car insurance and new tyres were cheaper than last time and my road tax was the same as last time. Next year the road tax gets cheaper! I bought some trainers a couple of weeks ago - exactly the same make/model and they were a tenner less... There's a whole load of things I've bought in the last six months that have been less than before.

There's a whole load of things I've bought in the last six months that have been less than before.

Could be cheaper retail due to retail panic - but might be more expensive than a year ago wholesale.

Goods are cheap right now, it is I think the time to buy stuff in real bulk, clothes, that sort of thing. Can't see prices being so ridiculously low for much longer.

clv101 wrote:Looking at my personal rate of inflation, I don't think it's that bad really. Sure food is up a bit - but my car insurance and new tyres were cheaper than last time and my road tax was the same as last time. Next year the road tax gets cheaper! I bought some trainers a couple of weeks ago - exactly the same make/model and they were a tenner less... There's a whole load of things I've bought in the last six months that have been less than before.

Chris - i am not so sure.

If you look at the areas where you spend the vast majority of your income, surely inflation must be hurting you by now? Car tax, car insurance and trainers are a tiny % of your outgoings I suspect!!

I would of agreed with you up until about a year ago - but I find myself realing at some of the increases coming through!

Look at the areas you spend most of your money:

Council Tax
Food (ok you conceded this one)
Gas?
Electric?
Diesel (regardless of how efficient you are , a near 50% increase in 2 years hurts!)
Water Rates

And then there are the areas that might not effect you and/or are not included in the official figures:

Mortgages
Child Care
Even the gym membership rates are having a good go!

All of the above comes to about 60% of my income - and I am beginning to feel the squeeze!!

My big areas of expenditure are diesel, food and camp sites. And the Caravan Club increased the price of their sites quite a bit this January. I'm WWOOFing this week, so free food and parking, and I only get one day off when I might need diesel .

greg wrote:Goods are cheap right now, it is I think the time to buy stuff in real bulk, clothes, that sort of thing. Can't see prices being so ridiculously low for much longer.

I agree that clothing, shoes, linens and similar manufactured goods have probably never been as cheap in real terms, and may soon start to rise as higher energy and material costs feed through.

I certainly agree that now is the time to bulk buy clothes and household goods.
Replacing such items in years to come could be problematic, even without any physical shortages. Remember that in the 1930s clothes, blankets, shoes and boots were readily available in the shops, yet many went cold and unshod for want of money to buy these articles.

A few years ago I stocked up, although I might have saved a little by postponning this until now, prices have only fallen slightly in the last year or so.

Although of course any feasible stocks will eventually be consumed, one could acheive a "breathing space" of at least a few years, and possibly decades.

UndercoverElephant wrote: It's hard to keep up with it. One the one hand, money is being printed by central banks. On the other, it is disappearing in "write-downs". Looks to me like it teleporting out of private hands into the hands of the central banks.

This is a very good post because it is exactly what is happening.

clv101 wrote:Looking at my personal rate of inflation, I don't think it's that bad really. Sure food is up a bit - but my car insurance and new tyres were cheaper than last time and my road tax was the same as last time. Next year the road tax gets cheaper! I bought some trainers a couple of weeks ago - exactly the same make/model and they were a tenner less... There's a whole load of things I've bought in the last six months that have been less than before.

I can't honestly say I've noticed too much on a day to day basis.
Heating bills are way up alongside petrol and diesel but we have adapted by turning down the thermostat. Electricity bills went up by double but I have cut it way down by using more energy efficient kit and unplugging unneeded stuff when not in use along with using as much solar as I can get away with. Rent is the same. Council tax has gone up but not by much. I don't know if food is the same or not. Eggs, milk and bread appear to have gone up but I'm still spending between 60 and 100 quid a week on groceries depending on whether I'm economising or not.
Clothes are dirt cheap. So are electronic goods. I notice foreign holidays have become about double to what they were five years ago.

Right now I'm not feeling the pain but since I'm a contractor the market might well shut down and I could be out of work after july.

If I were to summarise I'd say that we're starting to see cracks but I think we can hobble along for a couple years yet before we're in depressionary conditions.

Our council tax has gone up a fiver a month each. Which is manageable and less than expected. The council has afforded a small raise in the council tax by charging residents to buy a parking permit. Which means that none car owners like our house, benefit. The drivers are stewing though as they have to pay to park outside of their own houses. Our electricity has fallen, as my old housemate who left everything on and tumble dried EVERYTHING moved out along with his tumble dryer. Previously we all had to pay for his excess (the joys of shared housing, but how do you split a shared bill between three people other than three ways?), now our collective bill has fallen by ?30 a month. Woo hoo. Bless him though, he is a good friend, and now he has moved in with his girlfriend he is complaining about the rising cost of energy, I didn't have the heart to tell him (again) that he doesn't help himself by wasting so much. Food has risen, but to be honest I've just moved to a local veg box direct from the farmer, and I get my meat and dairy that way too - so it was something I was expecting, although staples like pasta and rice have climbed. The only utility to write and SAY that the bills were going to go up was our broadband and telephone supplier. I don't drive so the cost of motoring means nothing to me. All in all, touch wood etc etc.... inflation hasn't really hurt my lifestyle as of yet. I am of course aware, that it will do soon.

Miss Madam wrote:The drivers are stewing though as they have to pay to park outside of their own houses.

It does mean they can 'stew' if someone parks there when they shouldn't. Can they get a car moved if it's parked in 'their' parking place?

Also, what about 'your' parking space. You don't drive but what if you now chose to? Where would the space come from?

We have two parking places outside our house (we live on a one way terraced street with a dearth of parking spaces) so someone is always parked there, if they park too close to our door they risk getting bumped by my bike as I wheel it in and out of the house - but other than that I don't mind someone using 'our' space, as it's not really 'ours'. No one in our area really has a fixed spot that belongs to them, as it were. It seems to be the norm for drivers to come home from work and spend twenty minutes cruising the neighbourhood to find an empty resident's parking bay (the entire area is terraces, no one has garages or driveways). Hence why so many people in Oxford choose to cycle not drive. It doesn't bother me as I can say without a shadow of doubt that I will never learn to drive. I've never even sat behind the wheel of a car! I'm 30 now, and with the era of easy driving coming to an end - I don't see the point. My city is not designed for the car - thank goodness, so whilst relatives and friends from other places look at me incredulously, I think I'm actually bounds ahead in terms of PO preparedness to have escaped the 'must have car' mentality. Anyway back to inflation, yes the car owners of Oxford aren't happy bunnies and inflation is hitting them more than the cities cyclists, but this is just the council's attempt to internalise previously externalised environmental costs caused by driving. If it puts a few more folk off having a car, I'm all for it.