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?

Hope the government will be forthcoming with more help. Due to the much higher expected price cap since the £400 etc was announced, this is a possibility and something Rishi Sunak has pledged if he becomes PM.

Try to use less, so your bills don't get that high. There's loads of resources online about cutting down without suffering too much.

See if you or your partner can earn more, get a pay rise, a second or better paid job. If you have teens/older DC, can they get jobs so they can pay for their own tech, clothes, leisure activities etc?

See what other savings you can make to free up more to pay your energy bills. Sadly this will be the main solution for many, at the expense of their financial security, other essentials or non essential spending.

Never vote conservative.

Wages are a bit like tax in a global capitalist system - expect a fair amount and your employer looks overseas to source cheaper labour/tax havens (unless you have good infrastructure, education, healthcare, highly trained, specialist workforce, don’t clog up your borders with lorry parks and make importing and exporting difficult, etc, etc).

There is nothing we can do about it so I am focusing on keeping a positive attitude, living in today and buying extra/making savings wherever I can.
Yes, be sensible and forward plan where possible, but ruminating and stressing about what might happen tomorrow is exceptionally bad for your mental health.

Also, don't forget that alarming headlines is how the papers make their money. The more alarming or shocking it is, the more people read and share. The higher readership results in papers being able to sell crazy amounts of advertising. If you work in media, bad news is exceptionally good news.

That's not to say it isn't true, but there is more at play here than many realise. So for us, we will live in the 'now', prep and help our neighbours where we can and we'll deal with trouble when it arrives.

@sst1234 None of what you have written is an argument against paying wages at market rate rather than subsidizing them to keep pay artificially low

what do you mean? employers are paying the market rate, its just not enough.

There is no direct subsidy

BUT now we are seeing employees striking for higher pay, the employers and the Govt refusing to pay more.
the latest is RM and NHS workers - who dam well should go on strike, any poor patient care should be laid firmly at the door of the Govt.

You talk about arguing with oneself but you are refusing to accept the reality of the situation.

Its your party of choice that has bought about very low pay and employees reliance on working benefits - have look at the growth of WTC over the last 12 years.

But many people earn us less than us and we’re a low income family.
No one else I speak to seems over concerned about energy bills. Are many people just being naive?

We know from examples like P&O ferries that global capitalism has a complete disregard for humanity and fair practice. The markets don’t care about people, or the environment, or the long term, only about immediate profit for the financial benefit of shareholders and board members. Employees are just an aggravating expense, so the fewer and cheaper the better. Governments are expected to provide the leadership to enforce standards and expectations and support longer-term goals, but only if they put up a good fight to do so, because they will be resisted at every turn, as having to consider anything other than profit and short-termism actually requires skills that appear to be severely lacking in most of the millionnaires and billionaires making the corporate decisions in the world. UK plc has been saying corporate greed is good for decades. It turns out greed is very short-sighted and ultimately self-destructive, but we still reward those at the top incredibly generously for it. The result is, it doesn’t pay well to be employed.

Money earns you money. Work doesn’t earn you much at all.

Employers are subsidised through the benefits system

No family with 2 parents in work should need any benefits

But corporations profit and business is supported by citizens rather than the other way around

Well the fact is that, come January, typical bills will have risen from around £100 pm to £350 pm in 2 years, or £50 pm to £175 pm or £200 pm to £700 pm depending on how much you use, and anyone who pays quarterly will be facing a bill into 4 figures in the New Year and those on prepay will be finding that their £50 weekly top up only lasts 3 days or whatever, so those are enormous increases for anyone on low to middle incomes, so if they're not concerned about it now, they will be in a few months time and I think we will be seeing/hearing a lot of comments early next year about how did the bill get so high, I can't pay this bill.

But knowing about it now means that you might be able to put measures in place to reduce your usage so the bill isn't as high as it could be, rearrange your finances to free up money towards bigger bills or don't buy a load of overpriced crap that no-one wants or needs for Christmas.

forewarned is forearmed and all that.

Could be be going by the principle of not worrying too much before something you have no control over anyway actually happens, as that ruins the present as well as the future. If you have no further capacity to make changes to help prepare, why waste emotional energy focusing on anything other than the present?

Yeah, there's probably more truth to this than some people realise.

Boris has given up hasn’t he? We’re now wasting precious time waiting for a new PM , whilst nothing is being done.
There needs to be urgent meetings

saylordotorg.github.io/text_microeconomics-theory-through-applications/s14-02-the-effects-of-a-minimum-wage.html

'Markets are based on voluntary trades. In Figure 10.6 "Labor Market with a Minimum Wage", we see that sellers (the workers who supply labor) would like to sell 50,000 hours of labor to the market at the set minimum wage—that is, 250 more people would like to have a 40-hour-a-week job when the wage increases from $4 to $5. But firms wish to purchase only 32,000 hours of labor—firms want to hire 200 fewer workers (8,000 fewer hours)'.

'Another possibility is that everyone who wants a job is able to get one, but the number of hours worked by each individual decreases'.

'Because there are 32,000 hours of work demanded and 1,250 people who want jobs, each worker would work 25.6 hours a week. In this situation, we say that there is underemployment rather than unemployment. Yet another possibility is that, after the introduction of the minimum wage, the number of people employed stays the same as before (1,000), but those individuals are allowed to work only 32 hours per week. In this case, we have both underemployment (of the previously employed) and unemployment (of the extra workers who want a job at a higher wage). In real-life situations, there may be both unemployment and underemployment'.

ZERO HOURS CONTRACTS are this economic theory in action. Employment for all but fewer hours.
'The most obvious cost of the minimum wage is this loss of surplus. But there may be other hidden costs as well. Whenever people are prevented from carrying out mutually beneficial trades, they have an incentive to try to get around these restrictions. Firms and workers may try to “cheat,” conducting hidden transactions below the minimum wage. For example, a firm might pay a worker for fewer hours than he or she actually worked. Alternatively, a firm might reduce other benefits of the job. (Zero Hours again).
Such cheating not only subverts the minimum wage law but also uses up resources because the firm and the worker must devote effort to devising ways around the law and ensuring that they do not get caught'.
The rest of the article goes on to explain price inflation mitigating the min wage.
The term real min wage has now been replaced by the term living wage.

Min wage was always a mistake,
'The hidden hand will always do its work but it may work by strangulation.”Joan Robinson.'

A quick Google suggests that at its peak 9 million were furloughed. So nowhere near all of them could have found alternative work if there were a million or so jobs available.

@Arbitrage Lewis didn't call for bounce back loans, MSE is for consumers.

Furlough was used all over the world, in places that had never heard of Lewis.

QA has been used since 2008.

Its not credible to argue that all this would have happened (to this extent) without Putins invasion of Ukraine, as can be seen by limiting bills for consumers (only) via cap freeze inflation falls by 4%.

However, we need a much more targeted scheme, i fail to see why anyone should have a price cap freeze if they can afford the extra, its crazy.

I know people who attended the LSE and read geography - they still get to put BSEcon after their names, if they wish - in far they aren't that pratty.

There is no one reason for the present state of inflation. There are a number of factors: the income to house price ratio, printing money for furlough, at present and especially in the SE There are more jobs than people so wages are rising, cheap labour is less plentiful, partly due to Brexit and partly because covid displaced people back to other countries, the energy price cap which was put on in 2016 has made things worse than otherwise as has the over-reliance on energy imports together with anti franking and power station closure, the unnatural hold on interest rates until now, and printing money ad nauseum.

There has been a long period where a huge raft of people, particularly the skilled trades, have enjoyed a standard of living far higher than they did a couple of generations ago. That will come to an end and then the pain will be doubly felt as restaurants, beauty parlours, soft play areas, gyms all have fewer customers and feel the pinch or close and car dealers become swamped with the contract cars handed back upon bankruptcy. It will be a tough five years but a correction v cheap goods and proportionate income is long overdue.

The correction should have started in 2015 but we have had populist Conservative governments behaving like socialists since then who have acted for votes rather than the economy. It would have been no better under Blair or Brown. Diesel soup Mr Brown?

Truss will
Be a huge mistake.

I'd
Much rather rishi even if he is loaded.

Trusses ideas are ridiculous

who is you?

Did the furloughed have the option to not sit at home?

From what I read people who furloughed still received payment via their employers?

My dh is a high earner. I'm part time
In a minimum wage job and do it for fun rather than need.

I'm
Lucky

I said the whole
Time Furlough was a mistake for people Like me I didn't need it.

I have saved it for my
Kids to help get a house deposit. Or
Pay for uni Christ knows they will need it more than me.

how much furlough did you get that could pay for uni from a mimimim wage part time job?

Also I would say the majority that of people who were furloughed weren't in jobs they do for fun.

You could have donated it to charity of it was such a mistake

@Arbitrage Inflation in the 12 months up to Jan 2022 was 4.9%, avg pump prices in jan 2022 was £1.45 litre.

What changed in Feb 2022?
What was driving energy prices in late 2021? Covid LDs in China and Russia's build up of forces.

We 'd be in a totally different place without these factors and better again without Brexit.