Like old age, inflation will creep up on us. The percentage increases in CPIs and RPIs don’t mean much in themselves. Paying 50% more for your electricity, the extra £20 on your food bill, even after the kids have moved out, and every restaurant meal hitting three figures, that’s what focuses the mind. Question is, what can they do about it? Put up interest rates to stop us spending more? Doesn’t help when it’s stuff you need to survive that’s costing; you’ll just put more pubs out of business. Higher wages? Not likely long-term, employers will always get away with whatever they can. Basically, we’ll have to accept that everything’s been too cheap for too long. And get on with it.
“Do not expect America’s interest rates to fall just yet”
As rehearsed many times on these pages, the next move onwards and upwards for your investments depends largely on the decisions of various bankers and economists in what would once have been ‘smoke-filled rooms’.