The UK headline inflation rate is at its lowest point in two years, but behind these numbers, concerns around core inflation persist.
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Timestamps
00:00 – Headline
01:03 – Food
01:24 – Energy
02:54 – Service
03:39 – Wages
05:58 – Rates
07:22 – OOH
10:00 – Should I Stop?…(read more)
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Despite recent reports indicating a decrease in inflation rates, experts warn that the inflation problem is far from over. While the current trend may seem promising, there are several factors that could lead to a resurgence of inflation in the near future.
One of the main contributors to inflation is the ongoing supply chain issues caused by the COVID-19 pandemic. This has resulted in shortages of goods in various industries, leading to increased prices as demand outweighs supply. As the global economy continues to recover, these supply chain disruptions could worsen, further driving up inflation rates.
Another concern is the recent surge in commodity prices, particularly in the energy and food sectors. The uptick in prices for essential goods like oil, grains, and livestock can have a ripple effect on the overall economy, as businesses pass on these increased costs to consumers through higher prices. This could lead to a sustained period of inflation as households face the burden of rising expenses.
Additionally, central banks around the world have implemented stimulus measures to support their economies during the pandemic. While these measures were necessary to prevent a financial collapse, they have also injected a significant amount of money into the economy, which can lead to inflationary pressures in the long run.
Lastly, labor market dynamics also play a significant role in shaping inflation trends. As businesses struggle to find workers amid a labor shortage, wages are driven up to attract employees. This increase in labor costs can ultimately translate to higher prices for goods and services, further contributing to inflation.
In light of these factors, it is clear that the inflation problem is not over. While the recent dip in inflation rates may provide some respite, the underlying issues driving inflation are still present and could lead to a resurgence in the near future. It is essential for policymakers to closely monitor these trends and take appropriate measures to mitigate the impacts of inflation on the economy and consumers.
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Yes waiting for BoE to bring interest rates down to help UK and now fixed mortgage deals not great and so have to absorb that increase because of their mismanagement of our economy. You are right index funds and positivity is way to go so we can kind of have some control
Keep it as you are, push for economic reality even if it hurts us, doesn't matter. I rather watch a real one than an idiot alarmist. You're doing great Damien, even my friend in Venezuela are watching you
Please keep doing the videos it’s a great source of information which yes might be negative but still useful to allow people to make decisions.
It’s the clearest way I have to understand inflation and interest rates that are impacting my life.
Appreciate your breakdown of the boll***s that the tories give
I do agree with the majority here; please continue, even if it's only with quarterly updates. An unbiased view that cuts through the facade of the "political spin" to explain the underlying facts is always useful. Unfortunately younger people do not have the experience that older people have of living through periods of high inflation and 12%+ interest rates, so notwithstanding the high cost of living accommodation (whether you buy, or rent), they tend to be less cautious about expenditure. I remember the difficulty I had trying to explain to my parents in the 1970s, when we had very high inflation, that it was actually better to borrow and buy than to save first, which culturally they had always done. That is certainly not true of the current era.
The headlines are better than reality, that's for sure. Both where the UK and US are concerned. Not to mention that "inflation has slowed down" still means things cost more on average. It's like scoring 35% at an exam and comparing with the previous year where you failed to conclude, "I'm doing so much better!"
P.S: Your work is valuable, as is the work of anybody that's willing to cut through the headlines supplied by news media and politicians to examine the complex reality of inflation and purchasing power.
If inflation is going down why is food going up ?
So it was the Government’s fault inflation and interest rates went up but not their policies they went down.You can’t have it both ways.Interest rates and inflation have increased in every western country and whilst Truss’ budget was clumsy they would have gone up any way l8e every other country.
As to the fact food prices are going up 5% well that’s not a good thing but we have had inflation for hundreds of years and as you know deflation is a very bad thing for an economy
Sounds like you just can’t help yourself blaming the Government once again for stuff that every other country has gone through.
Maybe you need to be more balanced but suspect you aren’t able to – you should study global markets and economics a little more before hating on our own Government – it’s getting tiresome and detracting from your good content
Try and be more objective and not politically biased
It is about time the Government did something about the in-contract guaranteed price rises of CPI/RPI+4.99% every year that a lot of the media service providers bake into their contracts. Also the rises in council tax every yea4 are beyond the pale. My regional mayor that we don’t need costs me £193 per year.
Could you give me an example of low cost index fund which could be found on trading 212?
Capital Economics are predicting a potential rate cut in June off the back of CPI dropping below 2.0% in April (below expectations).
Will be interesting to see what happens; 10Y gilts have moved up slightly in price in the last couple weeks.
Hopefully you liked Dune 2 ✊️
Personally I really enjoy your updates, despise the repetitive nature, its very informative.
I'd welcome a continuation of this content
Side note – I've found the increased returns on savings / investments due to the increased interest are a positive.
Hearing you mention the interest rates will remain high isn't all bad surely
True inflation runs at around 15% – you need to take into consideration monetary inflation. Unless you are making a minimum of 15% on your salary / assets, you are literally becoming poorer year on year.
Consider splitting the video in half to consider negatives and positives to try balance it out?
I value your inputs on the monthly numbers as I do with Ramon, Sasha and others as listening to them in the round helps me to feel informed about things in a way I cant get from BBC/Sky alone. So I would say carry on the good work, you are not depressing us but helping us to stay informed. The next 6-9 months in particular is a crucial period as a lot is forecast to change but will it, and there is also the impending local elections and a likely general election. For those reasons I think that your monthly analysis will become more valuable to this community. Keep up the good work Damien!
This is not doubt or doom and gloom! this is information! information is king! I think you should continue with these videos just tittle them with date.. keep them coming I find them very rewarding to watch I mean I wouldn't be getting this info from anywhere else at least these videos make me go and look up the figures and give them context… and…well you never lie! so it a really helpful as a digest on the subject that might be gloom and doom.. but it is very important that people know what's going on!
Mate, thanks very much for posting such a nice videos. Keep up the good work. I’d like to see your opinions in the future with videos u posted here. I’m 45 yrs old and late to the investing but it is better than nothing. I put £300 into ISA for now and I’m hoping to increase it to £600 pm at the end of the year. I hope I’ll manage to do that.
Thanks Damien, I'm glad this is your viewpoint I cannot believe the amount of stuff I'm seeing from "experts" online expecting the base rate to hit 4% by the end of the year, it's just not happening I struggle to see why the bank would lower it, they are trying to stabilise the economy so even a small cut would trigger lots of people spending money and thinking that was the greenlight because of the media narrative which is the last thing the bank wants.
I tune in every month. You analyse the inflation figures with no agenda, so I don't have to!
please keep continuing with videos as I share them with my family as it allows me to communicate what's happening without them thinking I'm a massive D*ck… (they probably still do but it makes me feel better)
Hi Damo, just moved my pension investment from the balanced fund to the adventurous. I'm 26 so hopefully that's a good 40 years of enhanced growth. Cheers mate x
It’s been long time due savers are getting better deal for the first time I am enjoying getting better rate. Interest rates are finally at the right rate?
It’s borrowers need to realize cheap mortgages cannot go on for ever which makes the housing crisis worse.
Service based economy is really bad news? We manufacture very little now which makes it hard for inflation to come down endless with this government are masters for cooking the economy to make the whole picture better then it is? ONE BLOODY CON.
I think it will be a shame if you don’t talk about inflation again otherwise the general public will believe it’s the norm? That’s my humble opinion ☹️
I haven't seen your previous videos "banging on about Core inflation" so I appreciated seeing this one. As some have suggested perhaps you could do it less often e.g. quarterly or half-yearly. Thanks for sharing your insight.
Maybe not the right video but am
I the only one thinking that the UK Government is planning an eventual stealth raid on taxes by eliminating NI in the long term.
Hear me out – Income Tax and NI are about 32% or so. The government wants to get rid of Ni and the headline will be, we have lowered taxes.
BUT, if they use the 32% figure and then say, we will only have one tax but it will be 25%… on paper it looks like a cut in tax…
BUT for those who do NOT pay NI, such as retirees living off pensions, that is a 5% increase in the taxation rate of their incomes.
Damien: Have you seen the core inflation numbers?
Community: Lisan Al-gaib!