Inflation

[Will]

Apparently, UK inflation has hit record levels of 3.1%  I've just come back from shopping, and although there seem to be more special offers than ever, I'm definitely spending more than a year ago.

I reckon its because of all the 'nicer' versions of food and other producsts that are being offered - you can't move for 'taste the difference', 'finest'. 'butchers choice', 'organic', 'fair trade' blah blah blah.  Although they are usually better, I don't think they are worth the extra money.  I think economists call this approach 'separation of markets' - make disproportionatly more expensive versions of products for those who can pay more.

Anyway, back to the original topic: if you have savings and want to protect them against inflation, you should consider National Savings Index Linked Savings Certificates (http://www.nsandi.com/products/ilsc/index.jsp).  Any other inflation beating suggestions much appreciated!

[Webmaster]

Don't forget that whilst inflation effectively eats away at the rate of return on your savings, it also reduces your debt burden! Infact for the average person with a mortgage who owes more to the bank than they have in savings accounts then inflation is infact making you better off over time.

Of course none of that really helps you if you can't afford your groceries as they have gone up in price. Or can't actually keep up with your mortgage payments as the Bank of England has put interest rates up to try to counter the headline inflation rates

[HighRider]

isn't there also the problem that the pound is overvalued?  Also I really don't see how inflation can be good in any way because wages don't seem to be rising to balance out the inflation.  Food prices are ridiculous. I always wonder about the 'organic' and 'fair trade' goods as well.  They don't taste any different and don't magically transform my body sadly  lol