Inflation returns to UK and could cost hundreds of pounds per month

[VWD]

Looking at the wind generator posts. Why do we need them of shore, when the greatest wind generation is in places like Westminster/Holyrood/ Stormont/Cardiff.

[cheezemonkhai]

And this has gone way OT and started to look a lot like some of the link plus copy and past threads from the past. 
 

I’ve already requested not to copy and paste big chunks of text from articles.

 

Since it’s started again and not a one off, expect further posts of this nature that run the risk of being removed.

 

Theads are for discussion not just dumping news article links and the texts. People can follow a link and read things themselves and if they can’t because of paywalls don’t post the text of the article.

Again if posting links have something to add/discuss, otherwise it’s basically just spam.

[B33fy]

Reminds me of when I was completing my masters, the lecturer opened a discussion/debate in the lecture theatre, I put my point across then the loudest in the room googled it there and then on their IPad and quoted it verbatim. That was the end of my contribution and learning for that cohort. Discussion/Debate should be healthy, respectful and informative, shifting the lens, filters and power bases of those involved, or agreeing to differ, not dominating, dictating or quoting, to which I glaze over, think “knob” and disengage, because life’s too short.

 

Back on topic, a general observation, given what’s been happening in the last 18 months I think we’ve got off pretty lightly thus far. I was expecting worse, sooner. I did get some chickens and 25kg of Italian flour to counter the panic buying, saves a few quid and tastes great. Killed the diet though! lol.

 

 

Edited 9 August, 2021 by B33fy

[cheezemonkhai]

52 minutes ago, B33fy said:

...

 

Back on topic, a general observation, given what’s been happening in the last 18 months I think we’ve got off pretty lightly thus far. I was expecting worse, sooner. I did get some chickens and 25kg of Italian flour to counter the panic buying, saves a few quid and tastes great. Killed the diet though! lol.

 

 

 

 

Oddly Enough I had just purchased a 25kg flour sack of capputo and recently had to buy another as it's all been used.

Combined with about 5kg of semolina and I've also been making pizza and both cut and extruded pasta.

 

During the first part I lost weight, during the second when making pasta and pizza not so much

The Ooni looks good, do they work as well as they claim vs a pizza stone in an oven.

On topic, the price per kG is much more reasonable when buying in 5/10/16 and 25kg bags though
 

[B33fy]

Ooni’s a game changer.  Capputo for me 00 for pizza semola for rolling our and pasta making. It’ll be coming as part of my toolkit to my refurb and self build, with nowhere to sleep or shower, at least I can eat a good pIzza!

 

 So.. have chickens, make pizza and save the economy! 
 

Sorry pasters and ‘debaters just trying to lift the mood.. see what I did there?.. 

Edited 9 August, 2021 by B33fy

[lol-lol]

11 hours ago, cheezemonkhai said:

 

 

Oddly Enough I had just purchased a 25kg flour sack of capputo and recently had to buy another as it's all been used.

Combined with about 5kg of semolina and I've also been making pizza and both cut and extruded pasta.

 

During the first part I lost weight, during the second when making pasta and pizza not so much

The Ooni looks good, do they work as well as they claim vs a pizza stone in an oven.

On topic, the price per kG is much more reasonable when buying in 5/10/16 and 25kg bags though
 

 

Must admit to getting a bit of a BREXIT shortage panic on and bought a sack of rice and a sack of pasta just in case and I am still working my way though both but on the upside it was very good rice and a good price.  Could not getting any small chickens, Tescos or cheapie brand, so perhaps the shortages in the press blamed on lack of lorry drivers/BREXIT are manifesting in this way.

 

Pound is relatively strong compared to where it has been most of the time late 2016 to 2020 so that should be a downward force on inflation, on oil has been so much more than it was last year ie oil when it was sub $25 for a barrel and hence we have seen petrol/diesel at 8 year high.

 

Managed a couple of significant savings today after Lloyds Contents and Home wanted nearly £400 and I got it down to less than £200 even staying with Lloyds, cover on the key bits, and excess, and then paying it all in one go rather than the monthly payments which means not getting wacked for those high interest rate penalties.   

 

Now got a real appetite to hunt down any cost savings on bills etc if the mortgage rates are going up next year then need to get everything else in the best shape as we all know mortgage changes can have the biggest effect on our finances, those of us who still have them. Did not plan to have £100k mortgage at 60 years old put that what divorce can do, on the plus side the house is mine rather only half along with all my other stuff.   

 

The price of freedom is eternal vigilance.

[cheezemonkhai]

35 minutes ago, lol-lol said:

The price of freedom is eternal vigilance.

Or £6/£10 if you look in the shop 😝

[lol-lol]

13 hours ago, cheezemonkhai said:

Or £6/£10 if you look in the shop 😝

 

Book about Thomas Jefferson ?

 

MT did reshare....

[cheezemonkhai]

1 hour ago, lol-lol said:

 

Book about Thomas Jefferson ?

 

MT did reshare....

https://www.briskoda.net/forums/subscriptions/

 

However I feel the attempt at humour may have been missed.

[ColinD]

And freedom was £12 in 2007.

 

hows that for inflation busting, £6 or £10 …. 
 

 

[Breezy_Pete]

One has to protect oneself from inessential expenditure one supposes? 

[lol-lol]

Might be worth remembering that the reduced VAT rate for eating out is only until the end of next month ie the 5% rate.

 

We keep it at 12.5% then until March 31st 2022 when it reverts to the full Standard rate of 20%, currently.

 

Enjoy. 

 

[cheezemonkhai]

Happy to not eat out if needed.

Prices didn’t come down with the VAT cut anywhere I’ve been, so maybe they won’t go up in plenty of places too.

 

The cut was after all to support businesses and allow them to make more money to recover.

[BJM]

In 1976:

I was married (young)

 

1 had :

1 kid and another on the way.

a house - a 1870's 2 bed terrace - valued at 5x my annual salary, which I had had to put a 10% deposit down to get a mortgage.

a 20 year old Hillman Minx (with rust holes in the wings) that I bought off a mate

 

and inflation was running at 17%

 

Kids today?

They're (you're) panicking about 2.3% mortgage rates and inflation at 2.5% maybe rising to 4%.

They (you) don't know they're (you're) born.

 

 

[cheezemonkhai]

Whilst I agree, if people hadn’t been able to afford 5%-7% rates they shouldn’t have borrowed that much it’s worth pointing out a few differences too.

 

5 x 5k is 25k

17% of 25k is a lot less that 17% of 300k.

 

Average house prices are not 5 times average salary, but 10+ times.
 

You didn’t have to compete with investors and as many buying second homes as to live in.
These people and btl having tax advantages over first time buyers.

You got mortgage interest tax relief, which sadly no longer exists.

 

Also wages are stagnant and wage inflation isn’t eating the debt away.

Jobs are not secure in any way.

 

I do agree there are people with new cars, all the toys and complaining they can’t save a 10% deposit. They’re a bit ridiculous. 
 

I think after the lockdowns and people saving, many might have realised how much they saved by not throwing it away, which paid for nice things. Don’t be surprised if more people save and shun credit.

[lol-lol]

10 hours ago, cheezemonkhai said:

Happy to not eat out if needed.

Prices didn’t come down with the VAT cut anywhere I’ve been, so maybe they won’t go up in plenty of places too.

The cut was after all to support businesses and allow them to make more money to recover.

 

If we do not eat out then government receipts will be down and this government who is already in a financial hole of wartime proportions will have to raise its taxes in another way.

 

McDonalds, probably the UK largest food outlet I reckon, did mostly reduce it ware by the full VAT amount except for signature products like their 99p white coffee.

 

True my local Chinese did not appear to reduce their take away prices and sadly closed their restaurant for good which was sad.

 

As ever will just have to compare and support where I can but it is mostly to fit busy lifestyle and therefore take-away will depend on disposable income.

 

[lol-lol]

9 hours ago, BJM said:

In 1976:  I was married (young)

1 had :  1 kid and another on the way.

a house - a 1870's 2 bed terrace - valued at 5x my annual salary, which I had had to put a 10% deposit down to get a mortgage.

a 20 year old Hillman Minx (with rust holes in the wings) that I bought off a mate

and inflation was running at 17%

Kids today?

They're (you're) panicking about 2.3% mortgage rates and inflation at 2.5% maybe rising to 4%.

They (you) don't know they're (you're) born.

 

I think it the numbers which worry me ie the potential for the increase in monthly outgoings.  If one is already paying a relatively high percentage and it goes up a few percent but if it is less than 2% and then goes up to 4 or 5% that would be painful especially for public servants not getting the pay rises that the private sector is. 

 

http://stockmarketalmanac.co.uk/wp-content/uploads/2016/07/Bank-of-England-Base-Rate-1901-2016.png

 

Gloucester, and Cheltenham, have long been expensive relative to local wages.  Personally I choose to live in the Forest of Dean to work at Elmbridge, Glos and commute after the loss of equity after the house price collapse of 1992.  

 

 

https://www.business-live.co.uk/economic-development/list-uks-least-affordable-places-21272669 

Top 20 least affordable cities in 2021

The data shows the price-to-earnings ratio followed by the average house price and average annual earnings:

1. Winchester, South East, 14.0, £630,432, £45,059

2. Oxford, South East, 12.4, £486,928, £39,220

=3. Truro, South West, 12.1, £356,788, £29,558

=3. Bath, South West, 12.1, £476,470, £39,508

5. Chichester, South East, 10.6, £446,899, £37,352

6. Cambridge, East Anglia, 11.9, £482,300, £40,492

7. Brighton and Hove, South East, 11.6, £449,243, £38,737

8. London, South East, 11.0, £564,695, £51,257

=9. St Albans, South East, 10.2, £604,423, £59,391

=9. Chelmsford, South East, 10.2, £424,690, £41,781

11. Salisbury, South West, 10.0, £392,355, £39,154

12. Exeter, South West, 9.9, £323,554, £32,635

13. Leicester, East Midlands, 9.7, £279,080, £28,725

14. Norwich, East Anglia, 9.4, £306,946, £32,632

15. Bristol, South West, 9.3, £346,902, £37,357

=16. Southampton, South East, 9.0, £310,435, £34,429

=16. Canterbury, South East, 9.0, £365,168, £40,565

=16. Gloucester, South West, 9.0, £287,600, £31,987

19. Worcester, West Midlands, 8.8, £303,132, £34,389

20. Cardiff, Wales, 8.7, £276,851, £31,946

 

[cheezemonkhai]

So on the one hand people can’t stop spending out of restaurants will go under and tax receipts go down.

 

But on the other hand we are worried about increased outgoings?

 

People are finally starting cut their cloth to suit their means. If there are too many companies dependent on this money, then there will be a longer term correction as people save rather than rely on debt.

 

FWIW I’m happy for a 1% tax or NI increase as long as it’s ring fenced for NHS. I’d even be happy to see the 40% rate slightly dropped to pay off debt.

I would very much like to see second homes and BTL heavily targeted.

[lol-lol]

12 minutes ago, cheezemonkhai said:

So on the one hand people can’t stop spending out of restaurants will go under and tax receipts go down.

 

But on the other hand we are worried about increased outgoings?

 

People are finally starting cut their cloth to suit their means. If there are too many companies dependent on this money, then there will be a longer term correction as people save rather than rely on debt.

FWIW I’m happy for a 1% tax or NI increase as long as it’s ring fenced for NHS. I’d even be happy to see the 40% rate slightly dropped to pay off debt.

I would very much like to see second homes and BTL heavily targeted.

 

People will just have to budget better ie £100 a month for take out, £50 for eating in or whatever.

 

Many people's out-goings have been so reduced over the last 18 months they effectively have circa £150B more money due to Covid.  Some they have spent on upgrading their houses and causing house price inflation, apparently not on cars looking at the figures, much due to lack of availability of new cars it seems. 

 

With those people who have massively benefitted from Covid working at home we need to get them to part with their money, hopefully in a environmentally friendly way.

 

I think about 1% on NI would be a good idea, give nurses a proper pay rise not an effective 0% one.

 

As to the 40% set a nominal £50k pa I do not think lowering the level would really help.  Many I know, including myself, tweak our tax planning so we aim to get £49,999 pa in our pay packet and then just skim off the additional £10k to £40k to put in our pension pots so I do not think one would collect that much to make any sort of dent in the massive UK national debt.  

 

Raise the starting rate for paying tax to something like £18k and then raise the basic tax rate to 25% and then do some tweak to the pension relief so that salary in to pension does get the 40% PAYE and 2% NI relief but something less.

 

   

  

[cheezemonkhai]

Maybe they should clamp down on tax efficiencies. Say if income from any source is above a certain level there is a minimum level of tax.

 

Ditto for people carefully crafting to stay at 20%. If people try to hide it then double it for everything above the declared amount.

[lol-lol]

7 minutes ago, cheezemonkhai said:

Maybe they should clamp down on tax efficiencies. Say if income from any source is above a certain level there is a minimum level of tax.

 

Ditto for people carefully crafting to stay at 20%. If people try to hide it then double it for everything above the declared amount.

 

Schemes like Salary sacrifice are endorsed by HMRC and seem to grow and grow as vehicles for tax avoidance.

My old employer, HMRC, could do something about it and having been talking for most of the last decade about tightening up on pension contributions.

One area they have lots of notices about is recycling of pension funds ie you take you 25% tax free lumps sums, typically thousands to even quarter of a million, and then start to refeed it back in to a new pension pot.

I only tend to deal with specialist indirect tax Officers ie customs and excise duties, but my brother, who is also ex-HMRC, Revenue side, and we both ex- Big 4 accounting firm, deals much more with those Officers who deal with Revenue ie PAYE, Sole Prop & company taxation as well as Wealth Management tells me HMRC are currently massively understaffed, sounds like thousands short of what is needed to properly implement policy.

 

Money going in to Pension pots is often going in to stock market investment which can indirectly fund company growth which is why I think HMRC allow it.

 

Only half of money that changes hands is taxed, of the other half much goes via HMRC endorsed tax avoidance schemes that have side benefits.  Yes there is lots that does fall through the cracks ie paying cash in hand for work do on people houses, window cleaning.  Can you honestly say you have never paid in cash for something knowing it was not, or probably not going to be declared.  If yes you are a saint as I certainly believe it is common place.

 

Only way forward is to ban cash completely and any alternate barter system too.  

  

We will see if Sunak goes after these changes to clamp down on these avoidance measures but I doubt it as he would rather hold public pay down, that is just the sort of actions you get under a Con government.   New UK inflation data out of Wednesday 18th of August but looking at where fuel prices are.  UK government should do as Belgium does and reduce the excise duty as the VAT take grows due to the higher prices IMO.

 

[cheezemonkhai]

I think it has nothing to do with who is in power.

 

Regardless, individuals and businesses will have to get used to the fact that debt is no longer virtually free.

 

Inflation is normal and low interest rates were never going to last forever.

 

Personally I’ll be spending less on non essential items and going out.

 

 

[skomaz]

1 hour ago, cheezemonkhai said:

I think it has nothing to do with who is in power.

 

Regardless, individuals and businesses will have to get used to the fact that debt is no longer virtually free.

 

Inflation is normal and low interest rates were never going to last forever.

 

Personally I’ll be spending less on non essential items and going out.

 

 

 

Just back to normality then...

[lol-lol]

1 hour ago, cheezemonkhai said:

I think it has nothing to do with who is in power.

Regardless, individuals and businesses will have to get used to the fact that debt is no longer virtually free.

Inflation is normal and low interest rates were never going to last forever.

Personally I’ll be spending less on non essential items and going out.

 

I am very nervous that the UK and Western countries are ever going back to the the post war status quo as the far as I can see the western world is slipping down hill quote rapidly.

 

Most goods are being made in the Far East, money and wealth is bleeding from West to East and the spending of our built up wealth is simply cushioning our decent in mediocrity as just as the Greek and Roman empires we have had our day.  It may be the end of the century until we turn in to a Greece/Italy.

 

I will try and do my best to keep British industry going, getting my £2k British made boiler installed and I am going to seriously consider a 62 kw Nissan Leaf as one of my cars which is good for UK and good for the environment and even good for some tax receipts for the cash strapped UK Gov.

 

 Buying less fuel should help the price of fuel drop if the more of us buy EVs based on the Supply and Demand model.

 

Interest rates, the Bank of England rate rise, is reckoned for August 2022, maybe sooner if seems get worse faster so maybe get those 0% financed deals nailed down now.

 

[WolfyWesty]

My bank will let me borrow £7K with a monthly repayment of £126 for 5 years. So I only pay back just shy of £7.6k.

 

If I add my credit card limit into that, then I can blast away £4.2K a year with a monthly payment of £5 (and never have to worry about the outstanding debt). If I want to increase it, my bank is more than happy to up it.

 

So in the first 12 months I can spend £11,2k and pay back £131 a month. 

 

If I want to buy something expensive online, I can "Buy now, pay later" with Klarna with nearly everything. Want a top end car? No problem, just get a finance deal on a 3 series Touring for only £309* a month. It's easy to fall into debt but even easier to never have to worry about it. I know a few people who have done this, and aren't even bothered because they know they'll never have to pay it all back.

 

The same people moan they can't save up the 10% house deposit, so they'll just rent for the rest of their life, because they see it as being cheaper, when the sad reality is it isn't. Or they don't see the point of saving money, because the interest rates are low, so they'd rather just spend their money on what they want (and then find out they can't afford to fix anything).

 

 

* CarWow deal at time of writing. 

Edited 16 August, 2021 by WolfyWesty