Prices won't be going back down again...will they?

[blahblah56]

Seems to be a lot of "grin and bear it" or "things will get better" posts around but I'm wondering if this is it now?

Our shopping has jump up so much, a lot more than the 12% or so they say shopping has gone up. I'm not going to go into Tesco one day and be surprised that my shopping is £50 cheaper am I?

Likewise my electric has gone up from £100 in a month in 2021 to £330 a month in Feb 2023. That's not ever going to go back to the lower price.

So is this it now? Is life going to be pretty shit in the long run with little chance for most people to enjoy themselves?

Google the history of the BoE base rate. That tells you all you need to know about where interest rates are likely to go. You can pull up a chart of the past 200 years of base rates. Its has averages 5.25%, and that is just the average. We are currently at 4% having experienced the longest and lowest interest rates in history. But, every single time in the past 200 years, following a dip there has been a subsequent peek of similar magnitude.
I’d be surprised if we don’t get to 10% or 12% over the next two years, which probably translates to 15% on variable rate mortgages.

Its gonna be painful for people who over extended themselves when they bought houses and never thought to check if their interest rates were realistic. How sensible is it to think that in an economy running at 10.2% inflation, that a bank should be willing to continue to lend someone half a million pounds at 6.2%, guaranteeing that they will lose 4% on the deal.

We need double digit interest rates to prevent inflation getting out of hand. I just don’t think the Government have what it takes to get the economy under control, and I think they’ll just tank the economy and hide it under a big blanket called WW3. That way it was someone else’s fault you lost your home.

But, the wealth and the money don’t get destroyed. It merely transfers from weak hands to stronger hands. So homes will be bought up by big corporations (called stakeholders in the stakeholder capitalism). You’ll get to stay in your house, but the bank will foreclose on you, and sell it to someone like Blackrock. You’ll become a renter of the home you could not afford the mortgage on. You will own nothing and you will be happy as they say.

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I’d advise people stress test their budgets and see where their breaking point is. How high can interest rates go before you can’t afford to service your mortgage? Pay down your debts? Who do you need a car loan when you can by second hand cars so cheap? Why do you continue to use your credit cards?

Because unless pay packets do go up, and your debts do not, you cannot win the game in an inflationary depression.

. . . and I’m fucked too, right there with ya’ll.

That’s what always makes my laugh when they say on the news that inflation is dropping , well it is not it’s gone up and now it’s not going up as much as it did before it never goes down. I’m still piss poor and will be properly for ever.

I saw this type of reaction at the beginning of Covid. Even before lockdowns when China locked down an area the size of Europe, people were saying it’s not going to affect us.

The point is to plan and predict what what you think is likely to happen, and if it doesn’t, you’re all the better for having prepared anyways. Being informed and being prepared also removed fear and gives you direction.

The point is we have families to navigate through tough economic times ahead. They may not get any tougher than they already are, or they may be tougher than you can imagine. But burying your head in the doesn’t help anyone, least of all our families that depend upon us.

Thinking long term, the increased cost of day to day life means many people can't afford to save anything extra for retirement. I dread to think of the future impact.

That’s because they have to dumb down the news for the masses. Most people do not know what the word ‘decelerating’ means.

Aside from that, ‘inflation’ is the increase in the money supply. It has already happened. We cannot put the genie back in the bottle. We printed trillions of pounds since 2008, and we haven’t stop inflating the money supply since.

Price increases are a consequence of inflating the money supply. Each time we increase the money supply we devalue to pound. For ten years the pound fell in value, and you thought it was staying the same, because you compared it to other currencies, and they were all losing value as well. But your pound couldn’t buy you as much house. The house didn’t become more valuable. But the amount of pounds it took to buy it changed, because they weren’t worth as much.

Now the inflation is going to show up in everyday commodities and the man on the street is going to understand. Two years from now maybe people will twig that it’s the pound that is falling, and not prices that are rising. That is something Government (either side of the isle) don’t want you to know, because when you understand the pound is losing value and prices are reaming the same, you cannot blame anyone except the Government.

Nope. This is what people wanted with the whole brexit stuff then there was the whole covid thing- which is still causing problems, and then Russia decided to invade Ukraine. None of those things have stopped and when they do it will take a looooong time to recover

Dependence on the state?
Canada are trialing euthanasia for those who cannot afford to live.

I fill up my car much less frequently than I did. When I filled it up in January it was about £20 cheaper than when I filled it up last, which was a month or so before. But car fuel is now a luxury; as are cars and all that goes with car ownership.

Fuel in the home is not a luxury. Too early to see if prices are going to go down. But energy companies seem to be finding their profits are going up 📈

I just read an article saying inflation is expected to be 4 percent by December this year and once it starts falling it will fall quickly over the summer. I am just hoping it's true.

Well it would be nice, given how little it's now worth, if we could ever pay using £50 notes. Bit stupid given a 50 euro is bog standard means of payment and there's not much in it..

I can't see people's wages increasing enough to pay for all these increases. It's come to something when I hear of so many struggling even in a 2 parent family both earning. In this day and age it is truly depressing and worrying. No way to live either :(

Energy companies will want to keep it high as long as they can. 1 billion profit? Excellent. 3 billion? That's fantastic. Bonus, dividend, etc. Whose going to tell them to make less?

Over the next few moths we have....
5%-7% increase in Council Tax.
15% increase in mobile phone service charges.
15% increase in internet service charges.
Removal or reinstatement of the energy price cap guarantee.
BoE base rate increase/decrease.

Luckily we’ll all use less gas and electricity until October.
By then there will have been another 2, maybe 3, BoE base rate adjustments, and another energy price adjustment as well. I reckon this year is going to end with me having to find £400-£500 in my budget, and that’s gonna come from not using energy, eating less, not using a car, and maybe refusing to pay my council tax.

I’d rather we all didn’t pay council tax and they laid off a load of staff, than they bled the population to keep useless people in McJobs.

It is neoliberal 101, a simple example is that you still want your house price to go up in value, a secondary example is that you loudly campaign for higher wages and complain that automation in supermarkets is becoming default.

While I agree with you I doubt that animal welfare or payments to farmers have increased as a result of the price increases.

Energy companies need to keep their profits high and the Government know it. That was the deal they made to set the price cap artificially low at £2500. The energy companies are keeping the shortfall between what they pay and what they sell, on their books as debt. So we get artificially cheap energy, and the energy companies get to offset the debts against the tax they pay to the Government.

Its money printing but without the BoE being involved. The Government has effectively just pulled taxation from the energy companies out of the future, and used it today to reduce out energy bills. It really was a very clever move on the part of the central planners.

But for creditors (shareholders) which is most of our pension plans, the energy companies need to remain profitable in spite of the agreed upon debts on the books. So energy is bought at high prices on the international markets and sold at full price, but only partially paid for by the customer, the balance being written down as a debt underwritten by the Government. These ‘record’ profits are not entirely real. They are Potemkin profits. They only become real profits if, in the future when everyone has forgotten about this, the government does some debt restructuring. Kind of like what happened with the RBS bailout.

Energy prices have already fallen, have a look at the Octopus Tracker…

For anyone saying it’s easy to grow fruit and veg…well I’ve never had much success.

I’ve actually wasted a lot of money and time trying over the years, and I’ve never found it that worthwhile.

When you consider equipment you need, pest control, weather conditions, the time you have to put into weeding/watering etc….. it’s not that straight forward.

It’s still cheaper/necessary to buy veg in the shops, unless you have green fingers and bags of time/energy to spare. I don’t.

Yep - this is my most recent weeks usage/cost on it.
About a pound cheaper for electric and over ten pounds cheaper for gas than the SVR.

Wholesale, not retail.

Ah, you’re talking about your own consumption.
Yes. Warm winter. I’ve cut my consumption by about £150 a month.

My dh commented today on the "retail sleight of hand today"

We have as many have downgraded where they are available from branded to generic goods

Our go-to is Tesco ready made puff pastry at 350g

JusRol was more expensive but a smaller portion at 320g

Now they have given us new eco friendly wrapping (scrapping the box, just a grease proof wrapper) but it's 320g for the same price as the 350g used to be

It's the kind of shrinkflation where they change something so you don't notice

My usual toothpaste is 75g instead of 100g with a slightly different trio of blues on it

It's all deeply depressing

I honestly can't see how we are going to get out of it all

A simple rule is that a large majority of those complaining about the cost of living crisis are also expecting by default houesprices to continually rise, complaining that cheap veg is not in readily supply and yet unironically being a champion of the working class and not realising why said working class don't want to work the fields or serve them coffee.

If that's in reply to me, I'm literally comparing the Feb amount to the gas debited on 7 Jan/electric on 14 Jan - 7 day periods with almost identical consumption to the 21 Feb pic I posted, but billed before I switched over to tracker.

Nothing to do with reducing my consumption.