Business and Finance

Protecting your savings from Inflation:

With RPI hitting 5% in September 2008 i thought it was time to see what accounts allow a real positive return and it is not good.

RPI at 5% means a basic rate tax payer needs a gross return of 6.25% and a 40% taxpayer needs 8.33%. If you are not getting these rates on your current savings accounts your savings are losing value in real terms. Even many ISA’s are paying less than 5% so also bad news.

The best of the bunch for ISA’s is the Post Office paying 6.25% on £1 minimum. If you don’t have that amount consider the HSBC ISA paying 6.25% on minimum £1.

The best of the fixed rate bonds are ICICI 7.2% requiring £1000+ and the AA paying 7.21% on minimum £500+ . These will give inflation beating returns for a standard tax payer but not if you pay 40%.

Continue reading ‘Inflation Beating Savings Accounts’ »

Last month the United States inflation rose a startling 5.6%, the first time it has rose that fast in 17 years. With this number also came a 0.8% rise in the consumer-price index, showing consumers the effect of the increase in cost for food, energy, clothing and airfare. In the previous month there was a 1.1% rise that accompanied a 0.3% rise in core inflation (excludes food and energy). This is a significant rise of 2.5% from the previous year and well surpasses the Federal Agency’s “comfort zone” of 1.5% – 2.0%.

Economists are attributing this rise to recent reports of the U.S dollar and commodity prices. The dollar had increased to its highest value compared to the Euro since February and oil had dropped in price for over a week. As imports have become cheaper, the economy still shows weakness, leading to the inflation.

Continue reading ‘US Inflation Rate Rises As Food and Energy Costs Increase’ »