As the Bank fiddles with QE, saversare getting burned

The Romans knew what caused inflation, but at the moment we seem reluctant to remember

Surprise, surprise: when you print about £325bn of new money you get higher inflation. Who'd have thunk it, eh? The Romans knew that too much money chasing too few goods means rising prices, but it's a lesson that the Bank of England, mad keen on its quantitative easing splurge, seems unwilling to accept. Last month prices again overshot forecasts and, as anyone who keeps an eye on their weekly shop knows, the real rate of inflation that impacts on our daily lives feels greater than three and a bit per cent.

The massive threat of inflation is something I have been warning about for more than two years. It's utterly corrosive to personal finances and the economy as a whole, and it affects those lower down the income scale much more than those at the top. For me it's the effect on savers which is most pernicious. Since the financial crash of 2008 they have subsidised the debtors of this country to the tune of £100bn.

We have created a completely cockeyed economy where savings are raided and indebtedness is given excessive forbearance. Yet the evidence is that consumers are paying off their debts at an almost microscopic level: they are sitting there festering away. This in turn is understandable; if you are not forced to divest your debt by higher interest rates and circumstance, you are going to sit tight.

The psychological drivers which are crucial to the proper working of the economy are being avoided rather than deployed. We have had a collective economic mental breakdown and the synapses are no longer transmitting the right messages.

The Bank's QE programme, although launched for understandable reasons, just exacerbates this wholly false economy. And, once again, I return to savers. You see, if you don't properly reward savers then literally nothing in the economy works correctly. A better deal for savers isn't just a matter of fairness, it's absolutely crucial.

Watching claim firms

I am a bit of a fan of the gonzo consumerism propagated by sites such as Moneysavingexpert.com. Whatever you may think of its founder Martin Lewis's quite shouty appearances on the telly and radio, he and his site are no doubt a force for real good. And the seemingly million-strong army of Moneysavingexpert users – Mr Lewis himself has 112,329 followers on Twitter and counting – are a massive power. So much so that the old consumers' association Which? is increasingly trying to grab hold of Mr Lewis's coat-tails.

Last week, Moneysavingexpert and Which? (with the former, not accidentally, getting top billing) launched a joint campaign to help make refunds for payment protection insurance mis-selling easier. They want to cut the ground from under the claims management industry by getting people to submit claims themselves, without coughing up exorbitant fees in excess of 30 per cent of any compensation.

As our report on page 91 on council tax banding highlights, the compensation industry is much faster moving than the regulators. On Friday I was contacted by one of these firms about the very recent County Court ruling that bad debts run up on store cards which had been upgraded to a credit card are uncollectible – Harrods was the test case. This may well be overturned in a higher court but you can bet that the claims firms will be cold calling in the interim. Ultimately, that could mean more work for Mr Lewis and Which?

Chuck out the Chuggers

Good to see that the number of councils restricting the actions of face-to-face fundraisers – chuggers to the rest of us – is fast approaching 40. These commission-paid salespeople litter the pavements of the nation's towns and cities, pouncing on shoppers and people going about their business using guilt and pushy techniques to get them to sign up to a direct debit.

The street outside this office is horrendous, with teams of chuggers planting themselves in the narrowest parts of the pavement shouting at people who don't want to listen. Many charities, rightly, see that chuggers damage their reputation and don't use them, but others persist. With a council revolt, begun by Shrewsbury last year, gathering pace, lets hope we will soon be rid – especially outside my office.

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Junior Research Analyst - Recruitment Resourcer

    £18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

    Senior Analyst - Financial Modelling

    competitive: Progressive Recruitment: This really is a fantastic chance to joi...

    Associate CXL Consultant

    £40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

    Business Anaylst

    £60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform