The BM Blog: Why a Knickerbocker Glory doesn’t cost 25p in Wimpy anymore
This week, inflation went up to 1.8%. On the face of it, that’s a pretty dull topic. Not first date conversation stuff.
But wait! It does however matter when it means that suddenly everything costs more and at the same time your money in the bank is going backwards. Here’s 7 inflation facts and tips.
Who remembers the joy of a Wimpy Brown Derby for 17p!? Or when a cup of coffee which probably tasted like your sink cost a mere 8p? For all the complicated noise economists make, that’s all you need to know to understand inflation, as you fork out £2.70 for your Starbucks latte.
This week we were told that the Consumer Price Index has risen to 1.8% – the highest for 3 years. Food prices and petrol largely to blame with the weak pound making our imported stuff more expensive.
Feeling the pinch? Spare a thought for folk back in 1975 when inflation hit 25%.
That’s all nothing when we look at post-war Hungary in July 1946 when inflation hit the incalculable 41.9 quadrillion % (that’s prices doubling every 15.3 hours to be precise!). That might be first date conversation if you’re trying to impress a geek!?
What does this mean for you? Interest rates are pathetic. Most accounts are paying next to nothing. And with prices increasing, you are going backwards. If you are one of the 20% of Brits with more than £10,000 in cash – well, that might very well be sensible and for a short-term purpose but if not… now is the time to just stop and think.
Could your money be working harder in the markets? Are you saving with a 3 year + timeframe? There are newer and easier ways to invest than ever before. We share our top stocks and shares ISA tips here and we highlight which ones suit beginners or more experienced investors.
New ‘robo adviser’ Wealthify posted year one results yesterday and its 5 different risk buckets (from mild to spicy) returned from 8.9% to 28% over the last 12 months. These robos are easy to use but still relatively unproven – here’s our round-up of what we make of them.
This all comes with the caveats that nothing is a given. Markets might tank this year. Donald Trump could do something even more bananas. But coffee doesn’t cost 8p anymore. And when I’m a grey old so-and-so reminiscing about when Starbucks cost a ‘mere’ £2.70, I think I’m going to be pleased that I gave the banks a wide berth.
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