How high will inflation go ?

[simon field]

I blame estate agents for literally talking up prices.

 

[simon field]

When rent payments are higher than mortgage payments would be on the same property, buying a house is a good thing.

(disclaimer- I write as someone knocking on the door of middle age)

Why? Many youngsters don’t want to be tied to a house, like having an anvil around their neck. Maintenance, ‘improvements’, estate agents and solicitors ridiculous fees, all add up.

 

[gpietersz]

Some people will say that would be a good thing, but you will still get fewer properties for rent so rents will go up and not everyone can buy.

You get fewer properties for rent, but if some people who previously rented bought a house (which follows from fewer houses being available to rent) there are fewer people who want to rent so rents may well fall. Particularly so as its the better off renters who will buy.

I blame estate agents for literally talking up prices.

I blame:

1. The BoE and the government for keeping interest rates and inflation too low.
2. Lack of council housing means housing benefit at market prices which helps maintain those market prices, and causes an upward ripple effect.

 

[MBE2017]

I get fewer properties for rent, but if some people who previously rented bought a house (which follows from fewer houses being available to rent) there are fewer people who want to rent so rents may well fall. Particularly so as its the better off renters who will buy.

I think with the huge lack of rental properties this is wishful thinking. I know of landlords putting properties up for rent getting as many as 80 in just a couple of hours of advertising them.

The reality is probably higher rents, not lower.

 

[Justin Smith]

Not any more. Many young people see no point in buying property. Renting gives them far more flexibility.

I think they're making a fundamental error, but if that's what they want to do it's a free country (excepting much of 2020 and 2021, obviously).

 

[Justin Smith]

What is our new prime ministers plan ? dun dun dun .......print another 150 billion we dont have and let the future worry about it keep the plebs sedated for another year or two

Anyone with 2 braincells to rub together can see that all this is doing is creating a problem for further down the line prolonging the agony so to speak ...

It honestly is petrifying because there just doesn't seem to be any plan at all

Government is printing money like water and at the same time the bank of England is raising rates at a rollercoaster rate

make it make sense ?‍?

Absolutely.
The fact is there is a load of pain which must be endured to pay for the profligate waste of money that was shutting down much of the world's economy (to a greater or lesser extent) for nearly two years.
I can understand some posters on other forums thinking that wouldn't do massive harm (which has to be paid for sometime), but not on UKbusinessforums ? Surely not ?

 

[Justin Smith]

A lot is because the people at the top are in their late 40's,50's and above and already have family capital - they just have no concept of what it must be like for a younger person trying to get on the ladder with no family money as a deposit and a huge debt from going to uni to try and get a job good enough to get a mortgage big enough to get a house.

As you say it is a game of musical chairs and the dj's hand is hovering over the stop button

I agree, but also don't agree.

My Mum's advice to me was never get a loan for anything, except a house, then get the biggest loan you can. So, when I bought my first house, I had to stretch the multiplier so far I needed a letter from my boss that the Xmas bonus was guaranteed.

When I moved in I was so SKINT I had to get a lodger.
Running a car ?
Are you joking ?
Going on holiday abroad ?
You're having a laugh aren't you !
For my lunch at work it was chips and "scraps", I couldn't afford the fish.....

But, over time, promotion and inflation meant it got better. It was a similar story (not quite as drastic) with my shop (and its flats ! ), but, eventually, I ended up laughing all the way to the bank.

These days kids don't just want a car they want something nice. You hardly ever see anyone in a banger, in fact young people wouldn't even know what a banger was.
Similarly, they might be able to afford an ex council house in a slightly dodgy area, but that's not good enough for them is it ?

 

[Lucan Unlordly]

I've not been following this thread so apologies if I take it off track a little, but with reference to house prices and wages i've often questioned the following.

Here in my part of Essex you'd be looking at £250k to get a small starter family home.

In Sunderland you can stay dry and get a roof over your head for £60k

Paying a 'southern mortgage' is a real struggle financially, but how come those 'upt north' aren't revelling in the bonanza of earning the same minimum wage and presumably paying off their mortgages in years rather than decades?

 

[Lucan Unlordly]

These days kids don't just want a car they want something nice. You hardly ever see anyone in a banger, in fact young people wouldn't even know what a banger was.

Probably because of the governments scrappage scheme aligned with better production methods, rustproofing, paint etc., and easy credit.

 

[simon field]

In my experience, kids are more open-minded these days, and realise that life doesn’t revolve around money and the pursuit thereof.

 

[MBE2017]

There are advantages to house buying and renting. For myself, and most people I know, buying a house is considered a straight forward simple decision, one I know no one to have regretted.

About five years ago, I told my daughters that then, as things stood, with job insecurity and such an open world, given the same choices, I would probably rent rather than buy, but also rent out another property to others to live as cheaply as possible, to have an income producing asset.

Everyone has to make their own mind up, and whilst buying today is as hard if not harder than ever, it is still possible for many. Not all, but many.

Even in the 80’s not everyone could buy a house or home, as with every decade before and since. I cannot afford yachts, supercars etc, and learn to live with that. Hell, I don’t even have Netflix or an iPhone, or a credit card, or a bank loan.

Some do, some do not. You only decide on your decisions in life being right or wrong in hindsight.

Maybe instead of a cost of living crisis everyone is told is happening, people should accept the real problem is an low income crisis for most people. Make more money and the rising prices become much less of a problem.

 

[Justin Smith]

Probably because of the governments scrappage scheme aligned with better production methods, rustproofing, paint etc., and easy credit.

Cars still rust believe me ! Especially Fords which I have always had but have decided no more, because, they rust. I keep my cars a long time and my Focus 2006 has needed rust repairing on it multiple times, including much work required when it was only about 12 years old. I've just had two new wings on it and I looked at the old ones, they had almost no paint / anti rust on the insides. It's disgusting really.
My wife's Toyota, on the other hand, an 08 plate Yaris, has very little serious rust on it at 14 years old. Thus my next car will be a Toyota or a Volvo....

"Easy credit"
Just because they have "easy credit" available is no reason for people who want to buy a house to avail themselves of it !

 

[Justin Smith]

I keep my cars a long time and my Focus 2006

In fact the private plate that's on it as worth two or three times as much as the car !

 

[IanSuth]

Cars still rust believe me ! Especially Fords which I have always had but have decided no more, because, they rust. I keep my cars a long time and my Focus 2006 has needed rust repairing on it multiple times, including much work required when it was only about 12 years old. I've just had two new wings on it and I looked at the old ones, they had almost no paint / anti rust on the insides. It's disgusting really.
My wife's Toyota, on the other hand, an 08 plate Yaris, has very little serious rust on it at 14 years old. Thus my next car will be a Toyota or a Volvo....

"Easy credit"
Just because they have "easy credit" available is no reason for people who want to buy a house to avail themselves of it !

When i lived on the farm in the 70/80's my stepfather did car repairs over the winter. I would say the majority of his work then was body panels. Morris minor inner wings seemed to be a monthly job !! but more generally sills, outer wings, footwells etc.

Cars last far better now - i think they came prerusted from BL in the 80's but my 05 Skoda has 1 tiny mark coming beside the drivers door window and that is it

 

[DontAsk]

I've not had a Ford show rust problems since my first car, a 1978 Fiesta. I tend to keep them until at least 10 years old.

 

[IanSuth]

I've not been following this thread so apologies if I take it off track a little, but with reference to house prices and wages i've often questioned the following.

Here in my part of Essex you'd be looking at £250k to get a small starter family home.

In Sunderland you can stay dry and get a roof over your head for £60k

Paying a 'southern mortgage' is a real struggle financially, but how come those 'upt north' aren't revelling in the bonanza of earning the same minimum wage and presumably paying off their mortgages in years rather than decades?

this totally

And there is no chance at that size you would have room for a lodger - it is a shoebox that you can afford as a starter home (and getting smaller)

 

[Justin Smith]

A section of an article by Chris Snowdon (from the Institute of Economic Affairs) in The Times - 5th Sept. And this is why inflation could literally go anywhere... :

It is hard to ignore the legacy of Covid-19 in all this [high energy bills and the cost of living crisis]. During the pandemic governments created a staggeringly expensive system of universal welfare in which the state did not merely help people through hard times but sought to insulate them from economic reality.
With the precedent set we are now in danger of treating every problem like a once in a generation crisis.

 

[Newchodge]

A section of an article by Chris Snowdon (from the Institute of Economic Affairs) in The Times - 5th Sept. And this is why inflation could literally go anywhere... :

It is hard to ignore the legacy of Covid-19 in all this [high energy bills and the cost of living crisis]. During the pandemic governments created a staggeringly expensive system of universal welfare in which the state did not merely help people through hard times but sought to insulate them from economic reality.
With the precedent set we are now in danger of treating every problem like a once in a generation crisis.

How very strange that he doesn't mention Brexit!

 

[DontAsk]

And there is no chance at that size you would have room for a lodger - it is a shoebox that you can afford as a starter home (and getting smaller)

If it has two bedrooms you can have a lodger. My son did exactly that.

 

[Justin Smith]

How very strange that he doesn't mention Brexit!

Brexit will not be helping, but most other countries (incl the US) are also suffering inflation and associated economic problems.

 

[Justin Smith]

If it has two bedrooms you can have a lodger. My son did exactly that.

True, though my house was actually three bedrooms, but the third one was a box room, and, as estate agents say "the downstairs is commensurate with a two bedroom house" (it was literally just a kitchen diner and a lounge)

 

[IanSuth]

If it has two bedrooms you can have a lodger. My son did exactly that.

Nope


Take my old house, front door straight into front room walk past bottom of stairs into back room and diagonally through that into kitchen

Upstairs 1 room over front room and 1 over back room

BUT HERE'S THE KICKER

The only bathroom and toilet were over the kitchen and had to be reached via the back bedroom. It is why it was the cheapest house in the street when we bought it ( a lot had the bathroom behind the kitchen and a nursery/study above the kitchen). It is also why we moved pre child - you either have child/lodger in front bedroom and they walk through your room to the toilet (and in the child's case across the top of stairs) or you are walking through their room.
Can't use downstairs front room as only entry to house is through that and being only 10'6" wide (with chimneybreast/hearth coming out of that) not enough room for a stud partition. Same issue in back downstairs room as door in from stair bottom and out to kitchen diagonally opposite across that room (plus no natural light at all)

To have a lodger would have cost a fortune in building works (move kitchen to back room doorway and build stud partition in back room, build kitchen extension and downstairs loo which would mean demolishing a WW2 air raid shelter/shed) which wouldnt have added as much value as cost and taken ages to do (due to the drains being under the kitchen floor)

 

[gpietersz]

I think with the huge lack of rental properties this is wishful thinking. I know of landlords putting properties up for rent getting as many as 80 in just a couple of hours of advertising them.

The reality is probably higher rents, not lower.

OK, maybe not fall in absolute terms.

I am really arguing that landlords selling their currently rented properties will not make rents go up any more than otherwise, and may make them go up less than otherwise.

 

[gpietersz]

How very strange that he doesn't mention Brexit!

Because Brexit has very little to do with, apart from pushing wages, especially for low earners.

Unless Brexit is also the major cause of inflation in the EU, the US, and most of the rest of the world. I would not put it past rejoiners to claim that.

 

[IanSuth]

Because Brexit has very little to do with, apart from pushing wages, especially for low earners.

Unless Brexit is also the major cause of inflation in the EU, the US, and most of the rest of the world. I would not put it past rejoiners to claim that.

We will know effect of Brexit (and our particular mix of energy provision) when the official August inflation comes out.

We have the figures for the separate EU countries from Eurostat and ours is measured in the same away currently and we have the US figures (but measured slightly differently)

If ours are comparable with France Germany (maybe Ireland and Spain as well) & US then Brexit irrelevant - if our are significantly different then Brexit is the only real difference that you can look at (ignoring that it may have raised all EU inflation by a little bit due to introduced market inefficiencies)

I posted the EU figures the other day - when we have UK I will post again alongside but they are here https://ec.europa.eu/eurostat/docum...8-3fbe-4f54-2a3a-21c72be44c53?t=1661863346094

 

[Jasondb]

I think it is very difficult to know the economic effect from Brexit due to cov-id, it was too close to Brexit to understand.

The fall in exchange rate has helped some manufacturers to grow.

 

[IanSuth]

I think it is very difficult to know the economic effect from Brexit due to cov-id, it was too close to Brexit to understand.

The fall in exchange rate has helped some manufacturers to grow.

All you can do is compare countries for whom the only difference is Brexit

Germany France Spain Ireland UK I think were all reasonably similar Covid wise with regard to overall impact and governmental reaction - some worse than others (for example as Spain has a more tourist driven economy they were hammered), they are all eurozone countries we are not so a comparison is between non eurozone UK and eurozone countries of a similar economic size (or v.close ties in Irelands case)

I am predicting that the reason we have not seen the UK August figures (or even an official estimate) is because they are scary bad

Germany 8.8
Ireland 8.9
France 6.5
Spain 10.3
(EU average 9.1)

I reckon ours will be 11-11.5% most likely 11.2

That is a significant variance from hose comparable countries above (we used to be same level as France/Germany and would have scoffed at being compared with Spain)

If we are below 11 (assuming we don't change the measure) then I will be pleasantly gobsmacked

 

[DontAsk]

Nope

BUT HERE'S THE KICKER

The only bathroom and toilet were over the kitchen and had to be reached via the back bedroom.

If you are going to start introducing special cases then you can "prove" any argument you like.

Your original general statement is still wrong.

 

[Justin Smith]

I think it is very difficult to know the economic effect from Brexit due to cov-id, it was too close to Brexit to understand.

The fall in exchange rate has helped some manufacturers to grow.

Sorry, I may have misunderstood, are you saying there is any chance whatsoever that Brexit has caused as much damage to our economy as shutting much of the economy down for (to a greater or lesser extent) up to two years ?
And I talk as a Remainer.

 

[fisicx]

Sorry, I may have misunderstood, are you saying there is any chance whatsoever that Brexit has caused as much damage to our economy as shutting much of the economy down for (to a greater or lesser extent) up to two years ?
And I talk as a Remainer.

There is no one answer to this. Economics is a complex beast with thousands of moving parts the effects of which may not have an effect for decades.

Nobody can say with any certainty the root cause of any fluctuation or change.

 

[WaveJumper]

Agree with @fisicx there is no simple answer to this its a complex problem, its not just BREXIT it's a perfect storm. Major issues are facing not just the UK but the US, EU and right across Asia the latter are perhaps even in a deeper crisis than many and where do we source most of out goods from.

We see lack of production output from Asia, we see rising prices as their factories keep getting closed due to covid plus workers demanding more money, we see shipping companies going unchallenged with sky high shipping costs, we see OPEC controlling oil output and even with the huge crisis in oil supply & prices only agreed to a very small increase in August when in fact they could have really turned the taps on.

As we know some companies are making huge profits out of this, some countries are even using it as an excuse to invade others, Russia were already messing with gas supplies way before invading Ukraine.

This thread seems to have covered a range of topics now from the above to rusty cars. House builders whether we like it or not are there to make money they can obviously manipulate the amount they build to take advantage of higher prices (i am not saying this is right) Although locally I have to say I have never seen so much house building going on and with plans for well over 7,000 new homes starting very soon.

Another complex argument 'Renting" there again, there will always be some who want to rent, but I do wonder at the arguments some renters put forward about it being so much better than buying paying 2.5k a month to rent the average 4 bed house round here seems like money down the drain to me. I personally know someone right now who has sold and moved into rented whilst they look for a new house, 30k deposit and 3k a month rent, they have now been looking for over 6 months.

Like others we scrimped and saved every penny we could muster, worked overtime etc then like above got the boss to write a letter confirming that Christmas bonus so we could get or foot on the ladder. We sat on two garden chairs in front of a gas fire and slept on a camp bed, having a car was a dream finding money for food was the reality, but we did it and never looked back. Today a lot of the younger generation seem to not worry about this, they must have a new car, the latest phone etc and those lucky enough to get a foot on the property ladder won't move in until its fully furnished has all the latest gadgets and then spend 20k on the wedding.

My elephant in the room for all those renters is, whats your future plans how are you going afford your rent when you to start to think of retirement, and then what of all those who have not even got a pension and think the state pension will support them. I think its pretty evident right now the state (us) are not going to have the funds to offer anywhere near the support we do now. I find it really hard at the moment to think there is going to be a positive outcome to all this.

And then I look at out successive governments who have not done anything too foresee these issues. just like the energy crisis we face right now, this country should have been self supporting years ago and now we are facing a hug reality check.

I opened my rant with agreeing to the above, this is a very complex problem, we have been living on thin ice for many years and now we face that perfect storm for some there will be opportunities for many and I still think some of the "many" unfortunately don't realise how bad its going to get.

Will be interesting to see latest UK figures on inflation when reported how everI found it interesting that the CBI Distributive Trades Survey on 25th August which tracks optimism, employment, prices, investment, and stocks from senior executives. It gives a good indication of high street trade and has an impact on decisions regarding BOE policy was up from a previous -4 (the markets predicted -7) and it came it at +37

So maybe I am just worrying about nothing, I will finish by saying my beloved 24 year old Mercedes 190e has just developed some rust on the front wing ........I'm gutted.

 

[MarkOnline]

It has been extremely easy to obtain credit over the last 40 odd years, and thus be indebted.

IMO Its serfdom by stealth. debt is just modern enslavement. We dont work the land, we make the payments instead. The only advantage over serfdom that I can see is that at least those in debt have the illusion of freedom.

Anyone looking in would think we willingly succumb to this nonsense.

 

[WaveJumper]

It has been extremely easy to obtain credit over the last 40 odd years, and thus be indebted.

IMO Its serfdom by stealth. debt is just modern enslavement. We dont work the land, we make the payments instead. The only advantage over serfdom that I can see is that at least those in debt have the illusion of freedom.

Anyone looking in would think we willingly succumb to this nonsense.

It goes along with the "must have" the latest phone, Tv etc. I sometimes wonder if people actually had a pile of cash in front of them and then dolled if out to all those items they had on credit or subscription would they then think twice, its almost magically the money just disappears from their bank by direct debit and no further thought appears to be given.

I was talking to one of my sons friends this week, has been fortunate enough to get on the property ladder with help to buy, so thats one loan to our government hanging over his his head, then we have car, phone, gym membership, monthly subscription to cinema another to a locally attraction, Sky, Netflix, Amazon Prime the list seemed never ending. Asked if he was saving for a rainy day he replied whats the point. He's not in a financially stable or wonderful employment but I am sure he's just one of many. I find it quite mind boggling.

 

[DazRave]

I was talking to one of my sons friends this week, has been fortunate enough to get on the property ladder with help to buy, so thats one loan to our government hanging over his his head,

I used the Help to Buy scheme about 5 years ago. It was basically a savings account where they gave me 50quid every month I could save £250.

In the end equalled a few grand to add on top of my deposit but doesn't have to be paid back, it wasn't a loan.

What schemes do they have knocking around now then?

 

[Justin Smith]

There is no one answer to this. Economics is a complex beast with thousands of moving parts the effects of which may not have an effect for decades.
Nobody can say with any certainty the root cause of any fluctuation or change.

In reply to :
Sorry, I may have misunderstood, are you saying there is any chance whatsoever that Brexit has caused as much damage to our economy as shutting much of the economy down for (to a greater or lesser extent) up to two years ?
And I talk as a Remainer.

Whilst I think Ukraine has made it even worse, and probably Brexit too, I think we can be pretty certain where most of the blame lies for our present economic nightmare. It was obvious this was going to happen (from about April 2020) and many of us predicted it even way back then. Inflation and the oil price etc were going up before the Ukraine invasion, in fact this thread was started in November 2021 !

 

[IanSuth]

If you are going to start introducing special cases then you can "prove" any argument you like.

Your original general statement is still wrong.

No it is not - there are many 2 bedroom houses where you can not take in a lodger - that is reflected in the asking price. At the time i bought the house, i got what I could get and could not have had a lodger. I suspect that is the same with many first time buyers today - to get a place big enough to take in a lodger would require too big a mortgage to be able to get it.

I didnt add an edge case - you made a definitive sweeping statement - it only needed 1 example to prove it wrong and it just so happened that i lived in a street full of houses where c50% would have failed, as would many others in the surrounding streets

 

[IanSuth]

It goes along with the "must have" the latest phone, Tv etc. I sometimes wonder if people actually had a pile of cash in front of them and then dolled if out to all those items they had on credit or subscription would they then think twice, its almost magically the money just disappears from their bank by direct debit and no further thought appears to be given.

I was talking to one of my sons friends this week, has been fortunate enough to get on the property ladder with help to buy, so thats one loan to our government hanging over his his head, then we have car, phone, gym membership, monthly subscription to cinema another to a locally attraction, Sky, Netflix, Amazon Prime the list seemed never ending. Asked if he was saving for a rainy day he replied whats the point. He's not in a financially stable or wonderful employment but I am sure he's just one of many. I find it quite mind boggling.

And this is my problem with contactless payment - i think it is yet another thing that makes people spend more than they would of if they actually had to count out the tenners and think how many hours work it took to create that money

 

[Justin Smith]

Our biggest supplier has just put their prices up for the second time this year. In their E Mail they imply this is down to the [increase in the] price of steel, zinc and aluminium.
The thing is all three have actually gone down in price since their last price rise ! :

Steel - Price - Chart - Historical Data - News

Steel fell to 3,055 CNY/T on February 6, 2026, down 0.81% from the previous day. Over the past month, Steel's price has fallen 3.26%, and is down 6.86% compared to the same time last year, according to trading on a contract for difference (CFD) that tracks the benchmark market for this...

tradingeconomics.com

Aluminum - Price - Chart - Historical Data - News

Aluminum rose to 3,111.65 USD/T on February 6, 2026, up 2.52% from the previous day. Over the past month, Aluminum's price has risen 0.81%, and is up 17.97% compared to the same time last year, according to trading on a contract for difference (CFD) that tracks the benchmark market for this...

tradingeconomics.com

Copper - Price - Chart - Historical Data - News

Copper rose to 5.88 USD/Lbs on February 6, 2026, up 1.09% from the previous day. Over the past month, Copper's price has risen 0.41%, and is up 28.35% compared to the same time last year, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity...

tradingeconomics.com

 

[gpietersz]

And this is my problem with contactless payment - i think it is yet another thing that makes people spend more than they would of if they actually had to count out the tenners and think how many hours work it took to create that money

I think online shopping has a part to play. You can make an expensive purchase in minutes. Multiple expensive purchases, come to that. Lots of small impulse purchases.

It goes along with the "must have" the latest phone, Tv etc. I sometimes wonder if people actually had a pile of cash in front of them and then dolled if out to all those items they had on credit or subscription would they then think twice, i

Definitely. People have much less resistance to spending £10/month than they do to spending £120/year or £500 over four years.

Subscriptions are the new hire purchase.

 

[DazRave]

I think online shopping has a part to play. You can make an expensive purchase in minutes. Multiple expensive purchases, come to that. Lots of small impulse purchases.


Definitely. People have much less resistance to spending £10/month than they do to spending £120/year or £500 over four years.

Subscriptions are the new hire purchase.

Hasn't there been a huge decline on new phones over the last few years? I myself have started to keep my phone's much much longer, my last one almost 4 years until my missus bought me another (but it's still in working order!).

This might be more to do with the fact there's not much new or impactful in each model anymore, the tech within them has kind of peaked. I can see the likes of people buying Tesla's grabbing the latest model of car every few years though!