Dear Listener

Gloom will probably be followed by doom. That was the message of the week from (a) the Chancellor, (b) his independent economic forecasters the OBR, and (c) the Governor of the Bank of England. But I thought I would pick out my own bit of gloomy news – the prospects for inflation.

The gap between the two measures of inflation – the RPI and the mathematically lower CPI – will be around 1 percentage point in the long run rather than 0.5 percentage points everyone used to expect. That is the conclusion of a paper by the office for Budget Responsibility. The main reason – as I have been saying for some time – is the mathematical difference in the formula.

But in the near future OBR forecasts show the gap will in fact be larger. It predicts that by the start of 2017 the RPI would have drifted up to 4% which by then will be double the forecast rate of CPI. And the same table predicts RPI will not fall below 2.8% for the entire period.

So the news is not good for people who rely on benefits or get public sector pensions whose income will rise by the much lower CPI than the RPI into the future.

And there was another blow for public sector workers today when the High Court ruled that the Government was within its rights and powers to make the change from RPI to CPI. Unions are expected to appeal.

PS We didn’t do the Thomas Cook story I promised in last week’s newsletter because the company was rescued by its 17 banks late on Friday night. But its share price is still low – 16p and falling as I write – and we have it on our ‘to watch’ list.

***IN MONEY BOX THIS WEEK***

Money Box research has established that the banks are charging the equivalent of thousands of per cent APR for lending us small amounts of money over a short period. The most expensive, Santander, charges some customers £100 extra if they go overdrawn by £100 for four weeks without permission. That is equivalent to an APR of 819,100%. Other High Street banks will charge from £26 to £88 for the same loan, which represents an APR of tens of thousands per cent in most cases.

Benefit cuts announced on Tuesday will cost low income working households around £1.25 billion in 2012/13. And some pensioners will see their weekly cash rising by barely 2%. We delve into the figures announced this week.

Millions of people will have an extra year before they are automatically enrolled into a pension scheme at work. The new auto-enrolment scheme will start as planned in October for people working for large employers. But those with fewer than 50 employees will have at least a year longer to prepare and all employers will have another year before contributions rise to their final level.

Orange has told hundreds of thousands of its customers they face a mid-contract rise in prices of more than 4% from January. Customers who have objected have been told they cannot break their contract without paying a penalty despite a term in the Ofcom licence that appears to say they can.

The BT Pension Scheme shows charges of £243 million on investment income of £918 million – apparently a fee of more than a quarter. We find out why and whether it will affect BT pensions.

It will be a tight squeeze to get all five into 24 minutes. Find out if – and how – how we do it on Radio 4, Saturday at midday. If you miss it then catch the repeat at 9pm on Sunday or of course listen online anytime www.bbc.co.uk/podcasts/series/moneybox - or download the most popular business podcast through iTunes.

There is more information on these stories on our website www.bbc.co.uk/moneybox where you can also download transcripts of past programmes and send us ideas or problems you want us to look into. And you can Have Your Say on bank overdraft charges.

This newsletter is available at bbc.co.uk/moneybox/newsletter around the time it hits your inbox (tell your friends who don’t subscribe). And you could join more than 15,600 people who follow me on Twitter to enjoy (or rant about) my random but timely thoughts on money and a few other things whenever I’m awake at twitter.com/paullewismoney.

Debt or borrowing is the topical subject for my panel of experts on Money Box Live on Wednesday at 3pm. Call with your question or just listen to the advice.

Best wishes,

Paul

PS I will be on BBC One Breakfast on Saturday trailing one of our stories. And back on Breakfast later in the week, probably on Thursday and usually around 0640 and 0820 talking about a money story and answering emails and tweets. But the time, and occasionally the day, can vary.

e-mail Paul Lewis