charmingman 10:09 16 Sep 2008

4.7% thats very high looks like that will have another blow to our market at the WRONG time..

click here

  Pine Man 10:20 16 Sep 2008

The interest rate is 5%.

I think you mean the inflation rate;-)

  interzone55 10:27 16 Sep 2008

No need to panic. It's Inflation that's at 4.7%, which is still much lower than it was in the 80's...

  Grey Goo 10:58 16 Sep 2008

Yet the RPI is down 0.2% to 4.8%. Could this have been "massaged downwards" as this is used for wage increase negotiations.

  laurie53 11:10 16 Sep 2008

And pension calculations!

  peter99co 12:44 16 Sep 2008

This is when the interest rates on your savings is less than the inflation rate and any money in the savings bank is best taken out and spent, rather than leave it in and lose it's value.

We need to move our money into higher interest accounts which are more difficult to find or start investing in other things.

What do you suggest?

It is only money after all and we trust the banks to look after it for us.
Isn't that why they pay us interest in the first place?

I am looking to buy a ticket out of here but can't make up my mind where to go!

  peter99co 13:45 16 Sep 2008

It's like a pantomime script

click here

  Forum Editor 16:20 16 Sep 2008

of how a complete misunderstanding of a piece of information is spread around.

The interest rate is not 'UP' - as has already been pointed out. Sixteen years ago the rate of inflation was almost double what it is now, and we managed to survive. Seven years before that it hit 24%, and we struggled through.

There's a global economic downturn, it's serious, and it's widespread, but it doesn't mean the end of life as we know it. Panic is the enemy in these circumstances - that, and knee-jerk misinterpretation of news stories

  peter99co 16:42 16 Sep 2008

I agree we shold not panic but in moderation should we spend or save?

What advice is coming from the powers that be? All we get is information about the poor state of things and it's effects.

Hold tight is also an option but does seem to be head in the sand.

It could be said it is the banks who need to sort it all out but are they doing it the right way.

Add to this the demands from various sectors for inflation busting pay rises may prolong the problem.

Why did this government not prevent the mortgage sectors giving loans well above pay rates by legislation in the first place. If the rules have been broken why did not the goverment not take action against the people responsible. This must also apply to the US where most of the problems appear to have stemmed from.

Greenspan only seems to appear when thing go pearshaped. Did he see this coming and know one took any notice of his advise?

  interzone55 16:49 16 Sep 2008

If your money is in an account that pays less interest than the current rate of inflation it will lose value, but if you spend the money it will simply disappear completely, unless you buy something that will increase in value in the long run.

Investing in gold used to be the usual answer to economic down turns, but my savings account could only pay for about 4 ounces.

I'm sure that the government advice, if they could make a decision about this sort of thing, would be to spend money, because we need more money moving around rather than being stuffed in mattresses etc...

  peter99co 19:20 16 Sep 2008

It is also being put about that inflation rates will go down a lot quicker than the Bank of England is saying.

I would tend to believe this because any one increasing their prices at the moment would make people to go elsewhere for their goods or services.

Hope this is the case because the days of high inflation made a lot of people very uncertain about the best way to handle their savings and spending habits. I had a bank manager tell me to buy things I needed rather than save and see my savings fall in value

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