For some years now I have predicting high inflation coming to the UK. For most of that time I have been ridiculed by friends and colleagues. Now they are less certain that I am an absolute fool!
One interesting fact is that the ultimate protection from rising prices that has been available for most of the past 30 years has been National Savings & Investments' (NS&I) tax-free, index-linked savings certificates.
These certificates have guaranteed to beat inflation, and your entire deposit was protected by the Government. Oddly (or not) the state-owned savings bank has withdrawn these products twice in the past few years and they're currently not on sale at all. There is plenty of demand, the latest issue sold out after just a few months in 2011.
NS&I recently stated that it is unlikely to bring the savings certificates back before April 2013. That doesn't mean that they will return in 2013, it's just that NS&I don't plan that far ahead.
It would seem that the Government, which decides how much savings NS&I is allowed to accept in any given financial year, doesn't want any more of our money to finance its massive borrowing needs.
Now why might that be? Is it because it's currently cheaper for the Government to borrow from elsewhere than for it to pay us more than inflation? Does that not point to higher inflation coming?
One interesting fact is that the ultimate protection from rising prices that has been available for most of the past 30 years has been National Savings & Investments' (NS&I) tax-free, index-linked savings certificates.
These certificates have guaranteed to beat inflation, and your entire deposit was protected by the Government. Oddly (or not) the state-owned savings bank has withdrawn these products twice in the past few years and they're currently not on sale at all. There is plenty of demand, the latest issue sold out after just a few months in 2011.
NS&I recently stated that it is unlikely to bring the savings certificates back before April 2013. That doesn't mean that they will return in 2013, it's just that NS&I don't plan that far ahead.
It would seem that the Government, which decides how much savings NS&I is allowed to accept in any given financial year, doesn't want any more of our money to finance its massive borrowing needs.
Now why might that be? Is it because it's currently cheaper for the Government to borrow from elsewhere than for it to pay us more than inflation? Does that not point to higher inflation coming?
No comments:
Post a Comment