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Why stocks may not shield you from inflation
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Before you move on to adjust your equity portfolio, check the interest rate on your savings account.
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Virgin Media has been sending customers letters telling them that its prices are going up. Really going up. This year, they will be up 12 per cent, and from next April they will go up by the rate of inflation, plus an additional 3.9 per cent. Every year.
That is audacious of Virgin and irritating for hard-pressed consumers. But it is also a reminder of just how sticky inflation can be: If everyone put prices up by 5 percentage points more than the previous year’s inflation every year, how could inflation ever fall?
