UKC

Luxury items and inflation

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 The New NickB 19 Sep 2022

In 2010, I bought myself an Omega Railmaster watch, it’s a very simple design and at the time it was one of the cheapest watches that they made. It was an extravagance at the time, but felt worth it and still does.

I recently noticed that Omega have released a new version of the watch. Taking inflation in to account, the new watch should be £2,400, in reality it is £4,350.

Is there a specific issue with watches, or have other luxury items that I take no interest in shot up in price at many multiples of inflation?

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 peppermill 19 Sep 2022
In reply to The New NickB:

Yeah I've noticed this. 

Bikes, especially road bikes, seem to be another one, although there's other factors at play like global shortages of various things.

Often wonder if it's an increase in people buying non-essentials on the Never-Never e.g. Klarna allowing prices to inflate as it's all on credit anyway. 

 David Riley 19 Sep 2022
In reply to The New NickB:

Perhaps they are selling less ?

In reply to The New NickB:

I noticed this with certain HiFi items that are twice the price they were in 2017

 Philb1950 19 Sep 2022
In reply to The New NickB:

A Rolex GMT will sell pre owned for 4 times the new price, approx £12K+. Rolex watches are the best investment right now, especially the Daytona. It’s the same for all so called luxury watches. And Ducati motorbikes. A Desmocedici bought in 2008 for £40K will now be worth £ 68/70K

OP The New NickB 19 Sep 2022
In reply to peppermill:

I’ve noticed bike prices creeping up, but not to anything like the same extent, I’ve also noticed that there are some bargains to be had, not like the last couple of years.

 MG 19 Sep 2022
In reply to The New NickB:

I think GBP:USD was about 1:2 then. It's now heading for 1:1. Similar with CHF  Ie prices of many imports will double, as you've noticed. Brexits sunlight uplands.

Post edited at 19:50
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 Rob Parsons 19 Sep 2022
In reply to MG:

> I think GBP:USD was about 1:2 then. It's now heading for 1:1. Similar with CHF  Ie prices of many imports will double, as you've noticed. Brexits sunlight uplands.

Both the pound and the Euro are weak against the dollar just now. The pound has also  slipped a bit recently against the Euro, but not too dramatically. So, recent changes don't seem to be a Brexit effect.

Happy to see an in-depth discussion though - we can start with historical exchange rate graphs.

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 MG 19 Sep 2022
In reply to Rob Parsons:

It's not all brexits I agree, and actually my rate above was wrong for 2010. But look at the step in the pound value in 2016...

 Rob Parsons 19 Sep 2022
In reply to MG:

> It's not all brexits I agree, and actually my rate above was wrong for 2010. But look at the step in the pound value in 2016...

Yes - there was certainly a step change right after the referendum.

 john arran 19 Sep 2022
In reply to Rob Parsons:

> Both the pound and the Euro are weak against the dollar just now. The pound has also  slipped a bit recently against the Euro, but not too dramatically. So, recent changes don't seem to be a Brexit effect.

Suppose it never occurred to you that Brexit, while shooting the UK in its own foot, also shot the EU in its toe, leaving both Sterling and Euro relatively weakened.

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 Rob Parsons 19 Sep 2022
In reply to john arran:

> Suppose it never occurred to you ...

Wooah there, pal.

> ... that Brexit, while shooting the UK in its own foot, also shot the EU in its toe, leaving both Sterling and Euro relatively weakened.

Do you think that's what happened? Do the currency graphs support that contention?

Post edited at 20:17
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 john arran 19 Sep 2022
In reply to Rob Parsons:

> Do you think that's what happened? 

Most certainly, yes. I doubt you'd find any reputable economists to deny that both the UK and Eurozone economies, and therefore both Sterling and the Euro, were weakened as a direct result of Brexit.

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 CantClimbTom 19 Sep 2022
In reply to The New NickB:

Yes, Church's shoes got taken over by Prada and quality went down (specifically the longevity of the uppers, which crack) and prices went up up up up up. They want £940 --> for a pair of shoes!!! (Chetwynd brogues). That's the price of a second hand car!! Insane!! *** that! greedy so and So's. No idea who buys them, but someone must because they're still in business 

OP The New NickB 19 Sep 2022
In reply to Rob Parsons:

CHF is more relevant than the Euro here. It’s an obvious change, which I admit that I hadn’t initially considered.

2CHF to the pound in 2010, about 1.1 now.

Post edited at 20:25
 Ian W 19 Sep 2022
In reply to Rob Parsons:

> Both the pound and the Euro are weak against the dollar just now. The pound has also  slipped a bit recently against the Euro, but not too dramatically. So, recent changes don't seem to be a Brexit effect.

> Happy to see an in-depth discussion though - we can start with historical exchange rate graphs.

or rather the dollar is stronger, due to the Fed increasing interest rates. GBP / Euro hasnt changed much in the last couple of months, with GBP being marginally weaker.

 Rob Parsons 19 Sep 2022
In reply to Ian W:

> or rather the dollar is stronger, due to the Fed increasing interest rates. GBP / Euro hasnt changed much in the last couple of months, with GBP being marginally weaker.

I agree that the recent changes appear simply to be associated with the traditional strength of the dollar in times of economic and political uncertainty.

 Rob Parsons 19 Sep 2022
In reply to The New NickB:

> CHF is more relevant than the Euro here.

When considering the purchase of Swiss watches, definitely!

> 2CHF to the pound in 2010, about 1.1 now.

A graph over the period from 2010 to now would be interesting.

 Rob Parsons 19 Sep 2022
In reply to john arran:

> Most certainly, yes. I doubt you'd find any reputable economists to deny that both the UK and Eurozone economies, and therefore both Sterling and the Euro, were weakened as a direct result of Brexit.

That's a claim, but a question is whether or not exchange rate graphs confirm it.

 Siward 19 Sep 2022
In reply to The New NickB:

In the UK I think furlough (massively over generous as it was) provided huge amounts of spending money to the already well off. The luxury pound isn't in trouble. 

OP The New NickB 19 Sep 2022
In reply to Rob Parsons:

This is what I based my claim on.


 Rob Parsons 19 Sep 2022
In reply to The New NickB:

Thanks. That looks like a steady long-term decline. You can also see what seem to be a step-change as a result of Brexit in 2016. Nothing (?) particularly dramatic since then though.

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 artif 21 Sep 2022
In reply to The New NickB:

Rolex etc are used as investments. Rolex are very good at limiting supply, keeping prices and demand high. A colleague was told two months ago that the waiting list for the Rolex watch in the window of the shop, was at least two years. The Omega I should have bought 10 years ago is more than six times the price now. 

A lot of the luxury market has been driven by the Chinese who now seem to be off loading luxury goods, as the prices are dropping over there.

 spenser 21 Sep 2022
In reply to Siward:

Furlough only covered the first 2 grand though and only 80% of the person's salary, admittedly people had massively reduced transport costs but being furloughed didn't free up large amounts of money for well off people, not least as the well off were probably much more able to WFH. 


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