The jury is still out on whether interest rates will rise in 2011 – fears are certainly elevated given that inflation has risen for several months and is at 3.3%. It should be below 2%. An interesting view is put forward today from Simon Ward, an economist at Henderson and author of the moneymovesmarkets blog. He suggests, supported with the chart below, that because the full reduction in the UK bank rate to 0.5% was not passed on via mortgage rates (blue) or savings deposit rates (red), High Street banks would be unlikely to pass them on in the early stages of rate rises. A year ago, Ward boldy predicted that rates would rise in the new year. He believed the economy was bouncing back and that the recovery would feed through into higher inflation. He was right on the economy but rates weren’t raised. Much was made of Ward’s prediction because in 2007 he’d been going against the grain and making the right calls. He told me yesterday: ‘I remain a bit mystified as to why the MPC hasn’t yet started to raise rates given the inflation situation. If they had raised the bank rate six months ago I don’t think you would see the extent of inflation that we’re seeing now.’ Ward expects the MPC to hike the base rate from 0.5% to 0.75% in March and for it to reach 1% by the end of 2011 and 2% by the end of 2012. But Full Post…
The abrupt cancellation of Christmas present orders by internet retailers will be causing consternation in many households today. People living in areas where snow is falling heavily, hampering trips to the shops for replacements, must be feeling especially aggrieved. This is Money has a guide to your delivery rights if you find yourself in this situation. But it’s better to get a cancellation notice now than find out right before Christmas, which is what once happened to me. A series of increasingly frustrating exchanges with Amazon finally established that my box of children’s presents was sitting in a depot and had no chance of being delivered in time. At that point, on the eve of Christmas, I was offered the ‘option’ to cancel my order. There was no opportunity to hit the shops so there was some disappointment round the Christmas tree that year. A rushed trip to the toy shops on the nearest High Street the day after Christmas didn’t make up for it. Amazon gave me £5 off my next purchase but only after I sent emails pushing for compensation. This seemed pretty grudging considering I was a regular customer – and that there were sad-faced children involved in the debacle. I took a break from ordering anything from Amazon for a couple of years after that – ungenerous internet retailers take note! Although to be fa 
Hundreds of thousands of people without a bank account (meaning the most vulnerable pensioners, disabled and unemployed) would have to stop visiting a local post office to cash benefit cheques, track down their nearest shop with PayPoint and work out how to use the new system. The point behind inconveniencing all these people is unclear. I’m wondering if the government has an actual strategy for the Post Office. It was only a couple of weeks back that it announced RBS and NatWest banking services would now be available over Post Office counters. It was also pushing for more official form-printing, pension, and job-seeking services to be available, not to mention hailing a new DIY parcel and letter-weighing service. So the plan is to get people using Post Offices more by offering new services? Except a longstanding job they already do will be moved to the shop around the corner – if people are lucky, and it’s not across town, or in the next village over? This makes as much sense as the Post Office closure programme presided over by the last government. It was 
Of course it’s highly satisfying to have a good moan. For those who like to indulge you can read an enjoyable rant here: ‘Our parents were reluctant to skip work because in those days it usually meant being docked a day’s pay. If we were cold, we put on an extra jumper and ran around more.’ Some people don’t get paid these days either. The question ‘Can my boss dock wages for a snow day’ in our Ask an Expert section has had a lively response. The TUC replies: ‘While you should make every reasonable effort to get into work, you should not attempt to travel if it is not safe… If your boss insists on penalising you and colleagues who did not make it in, you should try to reason with him, pointing out that many other employers have ‘bad weather’ policies.’ TiM readers’ almost uniform verdict is: ‘Come off it. Why should you get paid for watching the telly? You lazy git!’ So are people staying home just idle layabouts helping to damage an already fragile economy because of some unseasonal snow? Don’t any of them deserve a bit of symp