The Energy Crisis

[westham,eggyandchips]

Just seen unleaded at Morrisons Witham for £169.9

[smuts]

https://www.bbc.co.uk/news/business-62408869

Might as well just delete the words "and fall" from the headline.

[EvilC]

Prices rising quicker makes price shocks worse, not better. Amazing stuff.

[delbert]

I agree. More piss poor planning. They go ape **** building offshore wind farms then forget about creating capacity on the grid.

I'm not going to be impacted too heavily as it will pass about a mile to my right. But if you want clean energy there is always going to be a compromise.

Joined up thinking would see the pylons running (or buried) alongside dual carriageways/railway lines.......

[smuts]

Interest rate up 0.5% and 1990 type recession predicted.

[sendô]

Joined up thinking would see the pylons running (or buried) alongside dual carriageways/railway lines.......

Running electrical cables at transmission voltages underground is astronomically expensive, which is why everything is on overhead pylons. The networks underground are typically 11,000V or 33,000V. You can install this underground in relatively small single or multi core cables.

Transmission is typically 132,000V, 275,000V or 400,000V. I've seen what a 400,000V insulated cable looks like, even a single core is ****ing huge and astronomically expensive. If large sections of national grid are installed like this, energy prices will only rise.

[RichieRiv]

Despite rate hikes having very little impact on inflation.

This is the problem is economists. It's all theory, which is fine when the theory works, but as soon as we encounter a situation where it doesn't like this one, they apply the same theory in the vain hope that it will work.

All sticking up rates is doing is putting people's homes in jeopardy.

[smuts]

Despite rate hikes having very little impact on inflation.

This is the problem is economists. It's all theory, which is fine when the theory works, but as soon as we encounter a situation where it doesn't like this one, they apply the same theory in the vain hope that it will work.

All sticking up rates is doing is putting people's homes in jeopardy.

And the genius that is Suella Braverman is caning the BOE for not putting up them quick and high enough. She'll probably be the Chancellor next month.

People are tightening their belts naturally at the moment, we've wrote off going away next year, are reducing our shopping bills and so on. The last thing people need is worrying about their mortgage payments when they are getting hit by all sides.

[Johnny Byrne's Boots]

I can understand raising interest rates when there's too much money chasing too few goods, it takes money out of the system and helps balance demand and supply. Raising them when people are already struggling to pay for essential goods and services and the supply/demand imbalance is largely due to force majeure, I'm struggling to see how it helps. It could be argued that high fuel prices have taken the place of raised interest rates in removing money from circulation, could it not?

[smuts]

Doesn't make sense to me at all. Perhaps they think by a few more people starving or freezing in the winter will take the sting out of it.

Ofgem have also made sure that their paymasters get their price increases quicker so it's a great day all round for the British public...

[Junco Partner]

BoE seem intent on punishing the 'have-nots' and protecting the 'haves' more, or making the classic generals error of fighting the last war not this one. This inflation has its roots in environmental scarcity, not due to people having too much money to spend.

A Chancellor can instruct them not to raise rates if he wants, but who is even our chancellor these days? And where's the Prime Minister....ah on holiday, from his holiday in Chequers....that figures.

Meanwhile we're fast reaching the point where the bulk of people in the UK do not have enough money to pay basic bills like mortgage, rent, gas, electricity, water, council tax, weekly food and broadband.....And that's a recipe for economic calamity.

[EvilC]

Rate rises are one of these oil tanker turning things. It takes time for the impact to feed through. The outlook is ugly though.

[Johnny Byrne's Boots]

^^^Do you think this rate rise will take effect somewhat more quickly, considering many are already strapped for cash and are having to make quite severe choices in basic essentials?

[EvilC]

^^^Do you think this rate rise will take effect somewhat more quickly, considering many are already strapped for cash and are having to make quite severe choices in basic essentials?

I'd be guessing if I gave an answer. Although may would say "why break the habit of a lifetime?".

[RichieRiv]

I can understand raising interest rates when there's too much money chasing too few goods, it takes money out of the system and helps balance demand and supply. Raising them when people are already struggling to pay for essential goods and services and the supply/demand imbalance is largely due to force majeure, I'm struggling to see how it helps. It could be argued that high fuel prices have taken the place of raised interest rates in removing money from circulation, could it not?

This is exactly the problem.

BoE seem intent on punishing the 'have-nots' and protecting the 'haves' more,

I think you would be surprised. Those "haves" living in million-pound houses or those who have brought buy-to-lets for their pensions are getting kicked squarely in the b*llocks every time rates are increased. Whether you like it or not the housing market from the very largest to the very smallest is intrinsically linked.

The Bank of England are a couple of rate rises away from collapsing the housing market and therefore the entire economy.

[RichieRiv]

Interest rate up 0.5% and 1990 type recession predicted.

Let's be careful about what was actually said. The reduction in output is compatible with the 1990 slump, not the recession itself.

[bubbles1966]

Doesn't the interest rate have an impact on the exchange rate?

If the currency weakens, the cost of imports increase. So oil (priced in dollars like most commodities) etc. will just keep getting dearer, and any economy that is excessively dependent on foreign trade will be paying more for everything it brings in if it's currency depreciates.

It's the whole argument for creating an economy that is as self-sustaining as possible, so we are less subject to the whims and problems of others.

Relying on the middle east or the Russians for energy, creates the same problem as relying on the Chinese for PPE. When the **** hits the fan you going to wish you had control and the means of production yourself.

[RichieRiv]

Wrong way round Bubs.

In the traditional economy in a less globalised world increasing base rates causes your currency to get stronger as it is more attractive for overseas investors who wish to buy UK Bonds (guilts). These are obviously sold only in sterling so investors have to go out and buy sterling on the forex markets, increasing demand and increasing the cost of sterling.

That's the theory and the reality if we were in 1990.

In 2022 we have a situation where western economies are so much more linked than ever before. It used to be a question of America sneezes the rest of the world catches a cold, which is still somewhat true, but it just happens a lot quicker. Also, inflation is rampant across Europe and the US so respective central banks of hiking rates, so the difference is negligible.

You will also note that the USD is kicking the **** out of all major currencies. That's nothing to do with rates. That's people buying up USD because they know the **** is going to hit the fan.

On a side note, you will notice the media flip flop with sterling rates.

Sterling = strong - terrible for exporters, terrible for foreign tourists visiting the UK
Sterling = weak - terrible for consumers buying goods for overseas, terrible for holiday makers.

As night follows day.

[Samba]

Running electrical cables at transmission voltages underground is astronomically expensive, which is why everything is on overhead pylons. The networks underground are typically 11,000V or 33,000V. You can install this underground in relatively small single or multi core cables.

Transmission is typically 132,000V, 275,000V or 400,000V. I've seen what a 400,000V insulated cable looks like, even a single core is ****ing huge and astronomically expensive. If large sections of national grid are installed like this, energy prices will only rise.

I can imagine, sendo.
A few years before the London Olympics, I remember the view from Canning Town flyover, looking north to Stratford. A horizon of pylons.
All moved underground, come the Olympics.
Of course, if you're preparing to host an Olympic Games, finding money for doing stuff is usually, not much of a problem..
The view north looks great now!

[Samba]

A Chancellor can instruct them not to raise rates if he wants, but who is even our chancellor these days? And where's the Prime Minister....ah on holiday, from his holiday in Chequers....that figures.

Nadhim Zahawi, also on holiday at the moment, but still hard at work apparently..