Cost of living crisis

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EvilC
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Re: Cost of living crisis

Post by EvilC »

sendô wrote: Wed May 24, 2023 4:34 pm Except inflation isn't being driven by "too much" money in the economy.

The reality is inflation is the excuse to take money from the pockets of working class people now that they're tightening their wallets by no longer gobbling up cheap debt.
Inflation isn’t an excuse for anything.

If you don’t increase rates you’ll just have prices rise further. Joe Bloggs is paying - it just depends how.
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Re: Cost of living crisis

Post by York Ham(mer) »

sendô wrote: Wed May 24, 2023 11:20 am Because further increasing the cost of paying off the mortgage for people already struggling is the way to get money flowing through the economy.
They don't want money flowing through the economy. They want people to spend less so prices are forced to rise more slowly. Cut demand, slow down price increases, lower inflation.
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Re: Cost of living crisis

Post by sendô »

EvilC wrote: Wed May 24, 2023 9:51 pm Inflation isn’t an excuse for anything.

If you don’t increase rates you’ll just have prices rise further. Joe Bloggs is paying - it just depends how.
It's absolutely an excuse. Inflation isn't being driven by too much spending, it's being driven by high food and fuel costs. Notice that they didn't cut fuel duty when fuel costs were highest. That would have helped reduce inflation, but then there was no money to be made off of the back of the forelock tugging class then, was there?

The average mortgage cost had already gone up by £481 by December according to the ONS. This is just driving those costs up further for people that can't afford it. Next comes repossessions, more money for the banks and misery for people struggling to make ends meet.
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Re: Cost of living crisis

Post by Junco Partner »

York Ham(mer) wrote: Wed May 24, 2023 11:28 pm They don't want money flowing through the economy. They want people to spend less so prices are forced to rise more slowly. Cut demand, slow down price increases, lower inflation.
That only applies when there's surplus demand IE Lots of people have too much money and this is driving up prices.

The exact opposite of the circumstances we are experiencing now.

Increasing rates is a means to do the above, a blunt, crude and half-effective way to do so when those circumstances exist. Completely wrong and counterproductive under the circumstances we are experiencing now.

The drivers of our inflation are corporate greed, thousands of companies, those with the pricing power in their sectors, have jacked up bills for many months, improving profit margins at their customers’ expense. This is true in power, fuel & food sectors.
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Re: Cost of living crisis

Post by EvilC »

sendô wrote: Thu May 25, 2023 8:52 am It's absolutely an excuse. Inflation isn't being driven by too much spending, it's being driven by high food and fuel costs. Notice that they didn't cut fuel duty when fuel costs were highest. That would have helped reduce inflation, but then there was no money to be made off of the back of the forelock tugging class then, was there?

The average mortgage cost had already gone up by £481 by December according to the ONS. This is just driving those costs up further for people that can't afford it. Next comes repossessions, more money for the banks and misery for people struggling to make ends meet.
Inflation is simply a measure of rising prices.

There are good reasons not to cut things like fuel duty - and that's because the retailer normally takes the benefit, not the consumer. Stuff like this has good intentions but bad outcomes. So no, it wouldn't help reduce inflation, it'll just make forecourt owners better off.

The government, BoE or whatever have very little ability to control food and energy costs. If they do not raise rates you'll simply have more inflation than you would have if you raised rates. This is basic economics, I suggest using Google to try and understand it. Central banks around the world are doing the same thing.

Nobody wants to raise rates - it is a case of the country having to take its medicine. The result is everyone gets poorer. If you don't do it, you'll get more inflation and it'll be worse.
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Re: Cost of living crisis

Post by sendô »

EvilC wrote: Thu May 25, 2023 10:12 am This is basic economics, I suggest using Google to try and understand it.
I suggest you give it a rest with the snide crap like this and stick to debating the point at hand.

Inflation will reduce as food and fuel prices stabilise or reduce. Interest rates have already been raised massively, they don't need to go up further. All this rise will do is put more hard working families under more stress and risk more defaults. The impact to inflation will be negligible at best.
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Re: Cost of living crisis

Post by EvilC »

sendô wrote: Thu May 25, 2023 12:04 pm I suggest you give it a rest with the snide crap like this and stick to debating the point at hand.

Inflation will reduce as food and fuel prices stabilise or reduce. Interest rates have already been raised massively, they don't need to go up further. All this rise will do is put more hard working families under more stress and risk more defaults. The impact to inflation will be negligible at best.
It isn't snide crap - what you are saying is contrary to standard economic thought which is why central banks around the world are doing something and you are telling them that what they are doing is wrong. Maybe you are right, but I don't see any evidence to suggest that.

Regarding your second point:
1) Yes, inflation will reduce as energy and food prices flatten or reduce. However one of the main things that concerned people yesterday was:
"core inflation – which excludes energy, food, alcohol and tobacco – actually rose by 6.8% in the 12 months to April 2023, up from 6.2% in March, which is the highest rate since March 1992. This is a closely watched measure by the Bank of England when deciding interest rates.

Jake Finney, an economist at the PwC accounting firm, said: "More troublingly, services inflation – which the Bank of England pays close attention to – rose from 6.6% to 6.9%.

Read more: Inflation: The supermarket items that have gone up in price the most

"This is its highest rate since March 1992 and is higher than the Bank of England's expectation of 6.7% earlier this month."

Amid "more persistent inflation pressures", he believes the Bank will not hit its 2% target until late 2024."

You can either have interest rates put pressure on families, or inflation.

https://uk.finance.yahoo.com/news/inter ... uC24oc3bTD
2) What is the basis for the statement "The impact to inflation will be negligible at best."
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Re: Cost of living crisis

Post by sendô »

EvilC wrote: Thu May 25, 2023 12:40 pm It isn't snide crap
Yes it is, and this isn't the first time you've done it in these threads.

You are not the sole arbiter of all that is correct economically, nor is "standard economic thought" something that must never be questioned or challenged, given that recessions are still commonplace and our own government nearly completely ****ed the economy just a few months back.
EvilC wrote: Thu May 25, 2023 12:40 pmYou can either have interest rates put pressure on families, or inflation.
Yet here we all are getting ****ed from both ends, aren't we all so lucky that we've got our lordships looking after us innumerate plebs? Are people just expected to tug their forelocks and thank our all knowing betters?
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Re: Cost of living crisis

Post by EvilC »

sendô wrote: Thu May 25, 2023 4:38 pm Yes it is, and this isn't the first time you've done it in these threads.

You are not the sole arbiter of all that is correct economically, nor is "standard economic thought" something that must never be questioned or challenged, given that recessions are still commonplace and our own government nearly completely ****ed the economy just a few months back.



Yet here we all are getting ****ed from both ends, aren't we all so lucky that we've got our lordships looking after us innumerate plebs? Are people just expected to tug their forelocks and thank our all knowing betters?
I have never set myself up as the sole arbiter of anything. However you seem to have dropped the debating and just gone onto playing the man and not the ball and some sort of rant. I never said anything couldn’t be questioned, but my post above is conventional economic thought pointing out some things your argument seems to have missed.

There isn’t a great solution here from where I am sitting, which is probably why most of the continent is ****ed.

Anyway, carry on, sorry the forelock tugging upset you.
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Re: Cost of living crisis

Post by Junco Partner »

sendô wrote: Thu May 25, 2023 12:04 pm I suggest you give it a rest with the snide crap like this and stick to debating the point at hand.

Inflation will reduce as food and fuel prices stabilise or reduce. Interest rates have already been raised massively, they don't need to go up further. All this rise will do is put more hard working families under more stress and risk more defaults. The impact to inflation will be negligible at best.
It's an odd approach at best, downright stupidity at worst.

The BoE clearly state that falling (as in rising more slowly) inflation from April onwards was inevitable. They also say that base rate hikes take a full 18 months for their full impact to be felt. We are now looking at 13 months of consecutive rate rises, so this months rise's impact will be in Nov 2024, yet they believe inflation is to be 5% before 2023 is out.

Alternative action to tackle the actual cause of the continuing inflation, unjustified price increases, is noticeable for its absence. Now that is beyond the BoE's remit, but we'd be waiting for hell to freeze over before our government ever dared question their corporate paymasters greed.

The problem is that if the only tool you have is a hammer, everything looks like a nail. US Federal Reserve has signalled a pause in rate hikes, French & other Euro governments have implemented price controls of varying type, our lot just keep banging the same old hammer desperate to be seen to be doing something. BoE's Huw Pill - “People just have to get used to being poor”.

The million+ coming off fixed rates before the end of 2023 are in for a large reduction in disposable income, which spells recession for our overly fragile and spending dependent economy. The higher rates go the bigger the risk that the economy will at some point crack under the strain.
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Re: Cost of living crisis

Post by sendô »

EvilC wrote: Thu May 25, 2023 4:56 pm However you seem to have dropped the debating and just gone onto playing the man and not the ball and some sort of rant.
You did that with your “ This is basic economics, I suggest using Google to try and understand it.” comment.
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Re: Cost of living crisis

Post by EvilC »

sendô wrote: Thu May 25, 2023 7:48 pm You did that with your “ This is basic economics, I suggest using Google to try and understand it.” comment.
On reflection that was out of order. I apologise.
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Re: Cost of living crisis

Post by sendô »

In which case I’ll wind my neck in, put my abacus down, and apologise too. :thup:
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Re: Cost of living crisis

Post by The Old Man of Storr »

Johnny Byrne's Boots wrote: Wed May 24, 2023 7:24 pm But but but you must be rich, your house is worth a million. You need to be taxed on this made-up valuation. Tax the rich.

Welcome aboard , Comrade - you line them up against the wall while I reload the Maxim .


On second thoughts , cancel that , I've decided this Cost Of Living Crisis is bollox and I'm wealthy enough to cope with it .

Stick another 50p on a tin of beans for all I care , I can cope .
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Re: Cost of living crisis

Post by RichieRiv »

You know what they say, economists know how to make love to a woman in 314 different positions. They just don't know any women.

The laws of econimics are just the and the seqaon for high inflation is not exclusive to just fuel prices and Russia invading Ukraine. They play a big part but its on the whole these current woes have been caused by shutting the global.economy down, especially in the West. Taking that mich money out of the system abd then injecting it back in such a short period of time is what caused the trigger.
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Re: Cost of living crisis

Post by wolf359 »

Mortgage rates rise after inflation surprise

https://www.bbc.co.uk/news/business-65713905


To those who know about all this stuff, interest rates could go to 5.5% which is a 'surprise'

Why is it a surprise?, these people are paid huge amounts of money and to an outsider they are just 'guessing' (and getting paid for it.) So why are they wrong (again) or it the article nonsense?

Either way these rises in interest rates are killing me (and 100,000s of others.) .. I can't see how it is helping anybody.
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Re: Cost of living crisis

Post by EvilC »

They aren’t guessing - they gather a load of information and put together and make a forecast. You then try and change your interest rate to control inflation according to whatever your target is.

Nobody wants their mortgage to cost more. They are clearly worried about non-core inflation now. If you don’t put your rates up you will face other unpleasant economic consequences, they are trying to avoid these by jacking rates up.
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Re: Cost of living crisis

Post by Johnny Byrne's Boots »

wolf359 wrote: Fri May 26, 2023 10:56 am Mortgage rates rise after inflation surprise

..............
In other news, savings rates are still expected to stay microscopically low.
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Re: Cost of living crisis

Post by SammyLeeWasOffside »

Johnny Byrne's Boots wrote: Fri May 26, 2023 12:00 pm In other news, savings rates are still expected to stay microscopically low.
If it's to save there are a couple of accounts offering 4.25 and a bit higher.

Use your ISA allowance and there are some 1 year fixes at around 4.5.
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Re: Cost of living crisis

Post by mumbles87 »

Johnny Byrne's Boots wrote: Fri May 26, 2023 12:00 pm In other news, savings rates are still expected to stay microscopically low.
Get onto raisen (saving platform) managed to get fixed of 4.5% for 7 years for the kids money

Edit looks like I went early it's now 5%
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