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?

The energy crisis, the thing people are actually worried about, is going to make current inflation look like peanuts and that’s down to Ukraine. So unless you predicted that I’d cool it on the I told you so’s.

Yes, £22 a month is a decent proportion of summer bills.

Even cutting useage doesn't affect the extremely high standing charges.

Nah, energy was rising steeply before Ukraine. There was a large rise in the latter half of 2021.

There are several increases that are linked to inflation - such as the increase in train fares, pensions, mobile / internet contracts (RPI plus 3.9%)

So the high rate in inflation means that these will automatically go up.

Just making things more expensive.

You can disagree, but you can’t change facts. BofE print £445 billion between 2008 and 2020. How much did it print to pay for Covid? £450 billion.

Printing money when you are not producing goods to match it is bad enough. Printing money when you actually stop ALL production, as during lockdowns, is a recipe for disaster.

But hey, lockdowns were crucial. That banana bread would not bake itself and all that Netflix content had to be watched.

Not to 3.5 grand there wasn’t.

not any time soon - to much of the economy is tied up in housing assets and we will likely see measures to keep prices growing even if slowly. Eventually it will get to a tipping point, but expect to see new house developments slow or grind to a halt, and schemes brought in to get people on the ladder at the bottom end to keep it moving. Schemes which wont lower the price, just spread the pain. Similar to the equity loan scheme the government did.

If the housing prices drop the conservatives are finished regardless of what peoples views on Starmer are as a credible alternative.

I dont think it will crash but it may slow down, however crashes are not good for people wanting to get on the ladder, as per the 2008 crash institutional investors hoover up property, and reduce overall stock which then drives the prices back up, but with lower stock of housing and more people trapped in rent.

Anyone who is paying nics is paying more than the last tax year because it’s equivalent to 10% more.
I'm paying less because of the threshold rise

Id think its already at 20% as utilities is already at 200% for this winter

Im seeing prices on goods being priced much higher than a 10 or 15% raise

@MarshaBradyo you are still confusing me. I haven't said pre covid was the same level of crisis. I simply said the economy hadn't recovered from 08 hence the over reliance on QE but the war & covid & Brexit has exacerbated it.

There has been plenty of commentary on here & other sources about high house prices & low wages which of course are legacies of 08 but this has disproportionately affected the young so I guess it depends on age

Yes

But hey, lockdowns were crucial. That banana bread would not bake itself and all that Netflix content had to be watched.

Grow up.

If you don’t understand how the economy works, that’s up to you.

That's inaccurate. NI has increased by 10%, but the income you pay it on has changed, so the effect for many people is they pay less overall. There's a useful chart at section 3 of this doc which demonstrates the impact for different salaries: ifs.org.uk/publications/15929

I agree, I don't see why they don't just combine it with income tax, and raise the threshold to 15k or something while they're at it.

Lockdowns weren't done for the economy. I know it galls some people that it was a popular policy (as if Johnson would have one it otherwise) but pretending to be the smartest person in the room about it over a year later isn't fooling anyone.

Thing is - for the most part, even if they do drop slightly - house prices have risen so astronomically in the past few years that I think people would still be happy to take the hit. Where I am, house prices have increased 30% in 3 years - I can't see a 5% drop putting people off. (obviously, it's not the same rise across the country but you get my drift)

Because it would mean admitting that the tax rate is far higher than the headline rate, and that's never going to be a good move politically.

Don't forget the suggestion of 50 yr mortgages! Honestly if I was young I'd be getting out of this country

I recall saying in covid to those who were bleating that the economy had to stay closed and they on furlough that I did not wish to see any bleating or whining about interest rates/inflation/difficult times ahead. What the chuff did people expect?

So true, yet the absolute abuse one was given for pointing it out...

The poor are going to find out what being poor really means unfortunately. Gone are the days of getting by with a few small luxuries for those on low incomes.

Something needs to be done desperately.

So your measure of success for economic impact is ‘it was popular’? Well that’s ok then. Problem sorted.

But why do you think that unprecedented levels of QE and a stalled economy did not lead to inflation? What new economic theory do you have to back this?

yep I agree - if you look at how much people are waiting for a crash to buy, i think any drop off will be small, as there is still a level of demand for property.

my caveat to it not crashing is if the economy starts to see a significant number of companies going under with people as over leveraged as they are already, and a good chunk of people who took mortgage holidays (some unnecessarily) any crash will be driven by recession and job losses not just by a 'market correction' which at that point the hordes of people lining up to buy will be in the same predicament which will cool demand. This is where institutions buy up property and we all lose

So your measure of success for economic impact is ‘it was popular’? Well that’s ok then. Problem sorted.

No, I said exactly what I meant: lockdown wasn't done for the economy. It was done to stop the NHS cratering and buy time for vaccines.

You can argue how effective it was at both those things, but arguing that 'it was bad for the economy' is stating the bloody obvious and also missing the point.