Inflation to hit 15%

[onthefencesitter]

www.independent.co.uk/news/business/inflation-bank-england-cost-living-b2137311.html

www.theguardian.com/business/2022/aug/03/uk-inflation-could-reach-15-by-start-of-2023-experts-say

What do you all think?

We were going to be fucked sooner or later, a decade of QE and deliberate inflation of the housing market as a policy choice will do that to you eventually, but the Russian invasion of Ukraine has accelerated and worsened the situation.

@MarshaBradyo

I mean all salaries are lower in the UK, relatively speaking when compared to Western Europe and North America. Even Australia. Salaries are usually set from bottom up. So if the minimum wage is lower, it suppresses salaries all the way up the pay scale.

For skilled role, I will use the example of a SW engineer, as it is a highly sought after skill. Average salary for this skill in US is $110k. Switzerland pays $97k. Even Australia pays more than UK where a SW engineer earns on average just over $55k.

Lets take physical engineering - petroleum, mechanical etc. Average salary in Canada is $112k. UK pays $74k.

It makes no sense for a highly skilled immigrant to come to the UK. The brightest would opt for US, Canada, Switzerland, Germany etc. The UK is therefore a magnet for low skilled immigration. The exact opposite to what the economy needs.

100% - although I think it’s even worse than what you say in the US vs Uk comparison for a software eng. I’d earn 5x what I do here, there.

(750k vs 150k - Bay Area vs London)

Skilled IT engineers will be out in America earning nearly 1m. The salaries in modern industries in tech are, very, very low in comparison over here. Hence why there is an issue in those industries with recruitment of talent. No one wants to work here, no-one wants to stay here. The only people who tend to are those with families.

Yet whenever there's discussion of salary and expectations here, there are tons of posters whingeing that anyone who earns money comparable with the US, northern Europe, or Australia (ie £100k and upwards) is rich and should be taxed accordingly. The real problem is the tax-payer funded subsidy for low wages and short-hours contracts. It's nauseating that supermarkets only offer 16hrs a week, dodging their obligation on pension or sick pay, and expect their staff to rely on WTC and universal credit. Part of the cause is the NHS which, as one of the world's largest employers, relies on suppressing wages across the board. Our MPs are paid a pittance, so politics only attracts the third rate or the power-hungry. The UK is reaping the harvest of years of myopia.

The real problem is modern global capitalism - it keeps the easy profits for the shareholders and those at the top, and outsources the risks and difficult issues to the state. Huge bonuses are awarded to the chief executives of companies for being bad employers and bad for the environment. Companies have to be given huge incentives to even consider behaving responsibly - they can’t possibly just get on and fund their own innovation projects to tackle climate change without huge bribes and incentives (but once they can see profit in it, they can’t possibly pay the taxpayer back), they can’t possibly pay reasonable wages. Obviously, they can afford to spend lots of money covering up how much they pollute, deliberately building in early obsolescence in their products, sowing doubt in people’s minds that changes are required to the way they do business, they just can’t afford the expense of behaving in the ways the planet currently needs them to, so if the state is too poor and toothless to persuade them to, then we can all just suffer the consequences.

The real problem is modern global capitalism - it keeps the easy profits for the shareholders and those at the top, and outsources the risks and difficult issues to the state.

asbestos

or absolutely even!

Congratulations. You killed an interesting thread.

If you have nothing interesting to say, please say nothing.

Its hard to compare salaries in other countries as surely their salaries keep up cost of living

So food/ housing is more expensive on Australia.
University and healthcare make USA expensive also its disjointed depending what state or city you live in.
I was surprised to read some US states and cities are paying people to go live and work there.

This trade deal Johnson done with India does that mean more skilled indians filling the gaps in the UK?

Define skilled? I would say being a HGV driver is a big skill and there s shortage of bus and lorry drivers.
I would say train/ signal staff are important and skilled work and you wouldn't want government replace those with low paid agency workers like P & O did

I was surprise junior barristers only earn12k.

I consider teaching assistants fairly skilled and underpaid seeing the varied work some of them do from academic interventions to mental health support.

My biggest regret my 1st degree business and legal studies is it was specific or vocational enough and I fell into retail management which is not well paid.
I did consider retraining as social worker as shortage but can't afford the 9k a year tuition fees and childcare at that time as my kids were younger.
I have withdrawn from full time labour market as childcare is so expensive.
I'm sure so many talented women are the same position once you go over 1 child or have no family nearby full time nursery was £800.

So instead done various low skilled parts time work i am fortunate my husband on paper earns a decent wage but in reality nothing left end of month.
I worked throughout lockdown 1 in a supermarket whilst husband was furloughed and one of us would have to be at home as remember we told stay away from old people and we had finally home school.
Really felt for the parents who had work from home and home school.

Lockdown has screwed us over financially not in 2020 we felt quite well off then but since no big tax bill as did less milage than previous years claimed for and jan screwed over as due to non essential retail being shut made April 2021 to 22 really high turnover condensed sales pushing gross pay over the 50k child benefit threshold so have to pay some child benefit back despite never earning that much before and probably won't Again.
Now the youngest starts school im returning to work but its fairly low skilled i can't afford to retrain and doubtful employers do beyond basic level NVQ which are designed people without gcses not hugh skilled quality training.

Always make s me wonder when they constantly quote high skilled high paid workers then tell everyone in every sector they can't have more pay after giving themselves a £2200 payrise plus their travel rent and energy bill is paid on top of their 80k plus salary and meals and drinks subsidised

I support the strikes because if you work full time and you can't afford basic costs of living then the UK is broken.
We should be able afford heat, transport , food and access dental/ opticians.

They really are spending so little on education think 2010 levels and we 2022.
Student debt is stupid.
Eldest starts 6th form September I said think carefully before you go to university that whatever degree guarantees a job.

Did other EU countries not lock down and pay furlough?
I know USA had stimulus cheques and even kids were sent money.
We had such obvious fraud and corrupt expenses contracts track and trace , faulty PPE as well as full on covid fraud.
I know a few self employed who got 2 bounce back loans when do they start paying these back?

I remember the god awful incompetent corrupt matt Hancock talking about skilled jobs UK science industry.
Big song and dance about vaccine innovation centre Oxford which they now sold off despite all science community saying no.

www.bmj.com/company/newsroom/governments-decision-to-sell-vital-vaccine-infrastructure-is-baffling-and-should-be-reversed-argue-experts/

Also vaccine production in the UK in Scotland with valneva then they cancelled their contract and the other vaccine name escapes me was teesside thats all gone quiet.
Since left EU scientists funding and research been screwed over surely this sector is highly skilled and part manufacturing that would help growth in GDP.
The vaccine industry does seem to have been very profitable.

I think other countries are doing more.
France has nuclear power and has just nationalised the industry thats what we need to do and sell energy at cost price not for profit and reinvest.
We need to do the same with water.
If you sorted out energy from source rather than just gave the energy companies extra money to plug the gaps.

www.france24.com/en/france/20220804-french-mps-approve-20-billion-euro-package-to-help-with-soaring-inflation?ref=tw_i

Compare with UK. France lower inflation.

We have the lowest gas storage in use EU because centrica sold it.
Australia owns national grid.
We don't rely on much Russian gas think saw 5% however we do rely on Norway which i think had agreement to prioritise EU states which may happen if we get short this winter.
National grid had to ask Belgium for help with electricity a few weeks back.
So we need EU for energy but decide to insult them and risk expensive legal action and trade war.

www.energylivenews.com/2022/07/26/uk-bought-electricity-from-belgium-at-record-prices-last-week-to-keep-the-lights-on/

As usual our government doing nothing to help us reduce energy consumption
Other countries least telling people be prepared.

www.bloomberg.com/news/articles/2022-08-04/energy-crisis-spawns-limits-on-cooling-lighting-in-eu-cities

For this reason I think truss will make UK economy worse I don't like either of them.
She wants to get rid of NI rise but then who funds nhs/ social care then.
She wants get rid if energy windfall tax but this is already funding the extra help sunack announced in May so hows all that being funded.
She wants to reduce capital gains tax o think..
Any help shes using to bribe members is small fry compared to cost of living increase.

Under truss expect high inflation, high interest rates and low growth.
Also she wants to meddle with bank of England which will ruin currency and markets.
I think we we will have blackouts so getting new torches lanterns camping stove at the ready.
Really want a solar generator but they pricy.
Cant afford a new solar roof or Woodburn right now and oven/ hob is electric.

We go from 1 crisis to another

Queues at forecourt
Queues at Dover
Pindemic

God knows which one comes next mass strikes maybe riots I guess.

We must not ignore covid is still about
And will cause absence in work place/ schools in winter as well as extraordinary pressure on NHS.
The booster will be too late and not targeted at age groups that socialise most working age and school kids.
Each varient seems to get worse yet government pretend its over.
Even the bank of England say having large affect on UK workforce.

We also worse in the UK because of brexit and leaving the single market which has created shortages of staff and shortages on shelves plus crippling costs to uk businesses.

www.standard.co.uk/news/politics/bank-england-brexit-andrew-bailey-harms-america-b1002715.html

www.bloomberg.com/news/articles/2022-04-27/brexit-explains-80-of-u-k-inflation-former-boe-official-says

www.independent.co.uk/independentpremium/business/brexit-andy-street-institute-of-directors-uk-economy-inflation-b2134169.html

Inevitable rises in energy will keep driving inflation.
They say petrol/ diesel got lower not really noticed much difference.

Rising essential living costs are why inflation is rising although QE printing money definatly did not help as we printed more than % of GDP.
We are in a energy emergency yet the government is doing nothing and will continue to do nothing.
Although be funny for sky news report I black outs as peope won't have the power to watch the news.
Which reminds me add a battery or wind up radio to my winter action list.

This is how you control inflation in a stagflationary environment, and unfortunately, it’s pretty brutal (attached is an excerpt from Paul Volckers memoirs).

in the second picture, look at this graph of the BOE’s predictions. It’s more than a little ridiculous, no matter how high it goes, somehow they think they’ll always get it back down to 2% in Q2 2024. But they are just fettling around the edges of the problem….. cheap money.

Does anyone else think that the UK is basically fucked? In layman’s terms I mean.

Brexit, an ageing population, less people of working age, a pandemic, generation rent, cost of living. I could go on.

Bit if the energy problem is global why is fence only having a 4% increase, and us 200/300 % ?

Can anyone explain why we’re getting hammered yet France isn’t?

France not Fence

@Sporty2022 Our inflation and energy costs are higher than in France for a few reasons. A) energy companies - historically when EU made its member states privatize their utilities, all EU countries privatized but ensured the state remained the largest shareholders, except for the UK. In the UK e.g. BP or Shell are companies, state has no control. Since Ukraine war, French govt has the power to tell their energy companies what to do and effectively nationalized them back and told them i.e. subsidize what French customers pay. The British government can't do that. But thats not EU's problem. Its only the Brits that went for full on privatization at the bemusement of other EU countries.

B) nuclear power - UK is very dependent on gas for it energy. It doesn't import Russian gas but isn't gas self sufficient and has weak storage facilities. Its therefore very dependent on global gas market i.e. when global gas is expensive, its expensive for Brits. The French rely more on nuclear power for their energy.

Both these things mean - Brits end up with expensive energy and French don't. Not sure why the British government didn't plan for it. I suspect Boris either forgot or simply didn't care that Russia's war in Ukraine will having very real impact on the British public.

Their energy companies are nationalized. So basically the taxpayer is absorbing the energy price rise.

That’s ok in the short term, but damaging in long term. If you rely on the state to correct the market, it never does. France imports roughly 45%, and their taxpayer is subsidizing keeping prices high to fill the coffers of exporting nations. Germany even more more so.

UK imports about 36% of its energy and is rightly or wrongly letting the consumer foot the bill. We could also tax people more but the cause of this mess is lack of energy self sufficiency. Therefore the answer is to be energy self sufficient. Nulcear, fracking and renewables - all of it. But who is going to tell it to the self righteous brigade stopping any of it from happening.

@sst1234 but the subtlety here is the French companies were not nationalised prior to this war. Most countries in Europe kept the state as the main shareholder of their core utilities - telecoms, energy, water, utilities, trains etc etc etc. In the UK - it was full on privatisation.

In the UK - the reality is the Tories (and to a large extent Labour) believe you privatise and let the market work through the system. Well it has - this is literally what it looks like. Energy security i.e. self-sufficiency is something the government does not companies who naturally dont care about whether the British state is energy self-sufficient. But the problem is the same - British govt didnt care in the 90s and privatised - they also dont care about energy self-sufficiency. A small state cant do energy security when their energy/utilities are being sold by global (in reality often American and French) companies.

If the British state could do proper governance they wouldnt have privatised in the 90s and would have ensured energy security in the 00s/10s but they didnt

@SwanBuster actually in a stagflation - you focus on what creates your inflation - here energy. The government should step up and gain control of the market. Either you bring in the levy on energy companies and redistribute or you force them to lower their prices and suck it up. When inflationary pressures are external to the system - go external when it comes to measures.

Does anyone else think that the UK is basically fucked? In layman’s terms I mean.

I think we are moving to become more like the US - very good standard of living at the top, lots of poverty at the bottom, and a smaller and more precarious middle class.

No but huge events are hitting globally will be felt especially if one after another

Many countries more worrying - climate, more uninhabitable, dependence on grain shipments

Although glad to hear ten shipments iirc have left now

@cuddlybear21

Nationalised industries don’t guarantee security and availability. Or low pricing. Quite the opposite in fact. Let’s not conflate cause and effect.

The problem with this country, as I think we both agree, is short termism and lack of forward planning. The Government could of course have granted the licences for fracking by legislating for this and ignoring the handful of banner waving unwashed. After all, it somehow found its backbone to push for HS2. Equally the government could have moved faster with Hinckley point and Sizewell C.

Nationalization is not the answer. You can’t give governments that generally fail at stuff, more power and more resources and more taxes and expect them to do a better job. They’ll do just as bad a job with nationalised energy, but wasting even more than they do now.

Don’t kid yourself. Becoming like the US. Chance’d be a fine thing. The US economy still continues to be strong, with lower inflation and higher productivity. Of course the policy makers over there are doing their utmost to change that.

I agree we need to, and already should have, move to self sufficiency but at every turn there are people trying to stop long term, large infrastructure projects