Cost of Living

[Turkish]

36 minutes ago, farawaysaint said:

Our new prime minister intends to freeze energy prices which economists are saying will drop inflation back to 2% and shorten the expected recession. It will cost an eye watering 131bi of taxpayer funding though. At least it is a plan which is more than we have had for the last few months.

Liz will fix it. #inlizwetrust

[badgerx16]

50 minutes ago, farawaysaint said:

Our new prime minister intends to freeze energy prices which economists are saying will drop inflation back to 2% and shorten the expected recession. It will cost an eye watering 131bi of taxpayer funding though. At least it is a plan which is more than we have had for the last few months.

Taxpayer fiundng in the form of short term loans to energy companies based on Government borrowing, then repaid through additional charges on fuel bills in the longer term.

Edited 6 September, 2022 by badgerx16

[Weston Super Saint]

Have the bank of England got it wrong?

Traditionally, the way to combat inflation is to raise interest rates - make it more attractive to save money, less attractive to spend money / take out credit, thus the 'demand' within the economy drops and prices start to fall (houses, consumer goods etc).

However, with the current issues, inflation is largely being driven by the cost of fuel increases (some price increases as well but these are largely due to costs of production / transportation increasing due to fuel).  Raising interest rates in this instance isn't going to be anywhere near as effective as it traditionally is.  People haven't got the choice to stop paying their fuel bills (heating, cooking etc) and most won't have a huge amount of discretion when it comes to vehicle fuel (work commutes etc), so raising the interest rates isn't going to be taking money out of the economy to decrease demand and lower prices.

Very basic economics and I'm aware that it is far more 'nuanced' in the real world, but is raising the interest rates going to do more harm than good in this instance (increased mortgages, increased rent, increased repossessions)?

[whelk]

Don’t know if these figures are true but surely the Treasury could do with the future income?

 

 

[Tamesaint]

1 hour ago, Weston Super Saint said:

Have the bank of England got it wrong?

Traditionally, the way to combat inflation is to raise interest rates - make it more attractive to save money, less attractive to spend money / take out credit, thus the 'demand' within the economy drops and prices start to fall (houses, consumer goods etc).

However, with the current issues, inflation is largely being driven by the cost of fuel increases (some price increases as well but these are largely due to costs of production / transportation increasing due to fuel).  Raising interest rates in this instance isn't going to be anywhere near as effective as it traditionally is.  People haven't got the choice to stop paying their fuel bills (heating, cooking etc) and most won't have a huge amount of discretion when it comes to vehicle fuel (work commutes etc), so raising the interest rates isn't going to be taking money out of the economy to decrease demand and lower prices.

Very basic economics and I'm aware that it is far more 'nuanced' in the real world, but is raising the interest rates going to do more harm than good in this instance (increased mortgages, increased rent, increased repossessions

...and increased interest rates leads to increased mortgage rates which in turn leads to more inflation. A vicious circle!!!

[whelk]

25 minutes ago, Tamesaint said:

...and increased interest rates leads to increased mortgage rates which in turn leads to more inflation. A vicious circle!!!

But will bring house prices down significantly - good news for some, not for others.

[whelk]

Don’t know how significant but sounds it

 

[farawaysaint]

1 hour ago, whelk said:

Don’t know how significant but sounds it

 

It will be the same as their “control” of Gazprom Germany. The shares will effectively be put into trust rather than a government takeover and will likely be returned when/if this ends.

[CB Fry]

Honestly as a nation we simply must remove the cap on bankers bonuses as soon as we possibly can. Absolutely vital.

 

[whelk]

1 hour ago, CB Fry said:

Honestly as a nation we simply must remove the cap on bankers bonuses as soon as we possibly can. Absolutely vital.

 

We should show some appreciation of how the banks steered us seamlessly through the 2008 crisis and the great public sector efficiencies borne out through austerity that followed. We shouldn’t criticise wealth we should praise it.

these working class bastards holding the nation to ransom by DEMANDING better pay by striking are going to hurt these righteous, selfless market speculators if their  bonuses are restricted, They will all move to Panama leading the UK to quickly become North Korea as we no longer benefit from the trickle down boom.

[kyle04]

Am I being naive, but bonuses would be subject to tax, I would presume at the 40% rate. If so the Govt. and hence the treasury would benefit from this. This extra tax revenue would then be passed on directly to those most in need, so the "greedy" bankers are indirectly saving the poor ("Gawd bless ya sir, you're a right gent and no mistake..... wiv a little bit of bloomin' luck..."). Everyone wins?

[revolution saint]

17 minutes ago, kyle04 said:

Am I being naive, but bonuses would be subject to tax, I would presume at the 40% rate. If so the Govt. and hence the treasury would benefit from this. This extra tax revenue would then be passed on directly to those most in need, so the "greedy" bankers are indirectly saving the poor ("Gawd bless ya sir, you're a right gent and no mistake..... wiv a little bit of bloomin' luck..."). Everyone wins?

You can also use the same argument for private sector low/mid level pay increases (postman, rail workers etc) which would be subject to tax as well but the govt don't seem too keen on that.

Edited 17 September, 2022 by revolution saint

[31cc]

If you believe that the bankers will happily pay 40% tax on their bonuses rather than squirreling it away offshore (which they are able to do because of Brexit - what a coincidence) I have a bridge in NYC I can sell you...

[CB Fry]

12 hours ago, kyle04 said:

Am I being naive, but bonuses would be subject to tax, I would presume at the 40% rate. If so the Govt. and hence the treasury would benefit from this. This extra tax revenue would then be passed on directly to those most in need, so the "greedy" bankers are indirectly saving the poor ("Gawd bless ya sir, you're a right gent and no mistake..... wiv a little bit of bloomin' luck..."). Everyone wins?

Of all the choices a government can make to improve the lives of those "most in need", do you genuinely think that removing the cap on bakers bonuses is the most effective choice? Maybe there's other stuff they could do first.

As mentioned above, if you think this is all going to be subject to 40% tax like the Christmas bonus in your own pay packet then good luck to you.

[mickn]

53 minutes ago, CB Fry said:

Of all the choices a government can make to improve the lives of those "most in need", do you genuinely think that removing the cap on bakers bonuses is the most effective choice? Maybe there's other stuff they could do first.

As mentioned above, if you think this is all going to be subject to 40% tax like the Christmas bonus in your own pay packet then good luck to you.

Come on CB use your loaf

[CB Fry]

44 minutes ago, mickn said:

Come on CB use your loaf

Quite right, those guys definitely deserve a rise.

[The Kraken]

No chance, they’ve got enough dough as it is.

[Whitey Grandad]

32 minutes ago, The Kraken said:

No chance, they’ve got enough dough as it is.

But do they knead it?

[31cc]

Typical upper crust, innit? The rest of us are toast.

[egg]

This is yeasterday's news lads, time to move on. 

[whelk]

18 minutes ago, egg said:

This is yeasterday's news lads, time to move on. 

Not whilst they are still rolling in it 

[egg]

16 minutes ago, whelk said:

Not whilst they are still rolling in it 

Prove it. 

[badgerx16]

Is there a whole grain of truth in anything that the Government says ? Or are we just being seeded with half truths ? Although they haven't shown a great deal of sense yet, perhaps they are late bloomers, or maybe they are just barmy.

Edited 18 September, 2022 by badgerx16

[Holmes_and_Watson]

I'm just going to loaf around today, and try not to to let the policies of cereal losers get a rise out of me.

[skintsaint]

Surprised no one has got a cob on with these posts.

[Holmes_and_Watson]

It needs a mod to sort the wheat from the chaff.

[Highfield Saint]

Crumbs - this thread has gone a bit stale

[The Cat]

Moving to a 4 day week gets my vote.

I used to work with a few people who condensed their full time hours into 4 days and they loved it. Would happily do that myself too.

https://www.theguardian.com/business/2022/sep/19/four-day-week-could-alleviate-cost-of-living-crisis-thinktank-claims

 

[benjii]

22 hours ago, The Cat said:

Moving to a 4 day week gets my vote.

I used to work with a few people who condensed their full time hours into 4 days and they loved it. Would happily do that myself too.

https://www.theguardian.com/business/2022/sep/19/four-day-week-could-alleviate-cost-of-living-crisis-thinktank-claims

 

Roll on Thursday. 

[buctootim]

On 19/09/2022 at 11:27, The Cat said:

Moving to a 4 day week gets my vote.

I used to work with a few people who condensed their full time hours into 4 days and they loved it. Would happily do that myself too.

https://www.theguardian.com/business/2022/sep/19/four-day-week-could-alleviate-cost-of-living-crisis-thinktank-claims

 

Between A levels and Uni I used to work three 11 or 12 hour night shifts at weekends. Made really good money (extra for weekends, extra on top of extra for nights and extra extra for working more than 8 hours all combined) then four days off. Loved it. 

Edited 20 September, 2022 by buctootim

[The Cat]

6 hours ago, buctootim said:

Between A levels and Uni I used to work three 11 or 12 hour night shifts at weekends. Made really good money (extra for weekends, extra on top of extra for nights and extra extra for working more than 8 hours all combined) then four days off. Loved it. 

For a while I worked 4 on 4 off 12 hour shifts. It's great on the one hand because with holiday you work less than half the year, however it totally sucked when you had Thursday to Sunday, then Friday to Monday etc and everyone is doing stuff at weekends. Missed loads of football too.

[badgerx16]

"The Treasury is refusing to publish a forecast of the UK's economic outlook alongside this Friday's mini-Budget. "

https://www.bbc.co.uk/news/business-62970803

[buctootim]

1 hour ago, The Cat said:

For a while I worked 4 on 4 off 12 hour shifts. It's great on the one hand because with holiday you work less than half the year, however it totally sucked when you had Thursday to Sunday, then Friday to Monday etc and everyone is doing stuff at weekends. Missed loads of football too.

Yep I do get that. I knew I was only doing it for about 9 months to bank some money. Hard to do on a long term basis  

[farawaysaint]

Interest rates set to increase to 14 year high of 2.25%

[whelk]

No doubt the banks will be notifying me of all the great interest rates I can get on my savings now?

[whelk]

Although I don’t have too much sympathy for people who have over stretched themselves with a mortgage based on interest rates of 1% and struggle to pay when it’s not that. Although obviously energy and food is making it hard for so many. But regarding borrowing rates had  far too good for too long so has become the expectation.

[buctootim]

What kind of cost of living pay rises are people getting? (excluding any individual award or progression).

I’ve just been notified we’re getting 5% compared with inflation of 9.9%. Not sure if that’s typical or not 

[farawaysaint]

Just now, buctootim said:

What kind of cost of living pay rises are people getting? (excluding any individual award or progression).

I’ve just been notified we’re getting 5% compared with inflation of 9.9%. Not sure if that’s typical or not 

Fairly typical from what I have seen. Companies just aren’t used to hiking salaries by 10% and 5% “feels” generous even though it’s a real decrease in spending power.

[whelk]

I know some places are giving fixed lump sums so obviously lower as % the more you earn. Fairer in many ways though. 

[revolution saint]

1 hour ago, buctootim said:

What kind of cost of living pay rises are people getting? (excluding any individual award or progression).

I’ve just been notified we’re getting 5% compared with inflation of 9.9%. Not sure if that’s typical or not 

3%

[LGTL]

Hiking interest rates when inflation is caused by non-discretionary spending is just bonkers IMO. I don’t know of anyone who isn’t cutting back and we’re all middle earners, what exactly do the BoE think we’re spending all this non-existent extra money on?

They feel compelled because of the Fed and are trying to save the pound. 

[Lord Duckhunter]

36 minutes ago, LGTL said:

Hiking interest rates when inflation is caused by non-discretionary spending is just bonkers IMO. 

 

[Tamesaint]

37 minutes ago, Lord Duckhunter said:

 

It's a pity that Wooden Lizzie doesn't have control of interest rates. She doesn't believe in traditional economic theory.🙄

[whelk]

1 hour ago, LGTL said:

Hiking interest rates when inflation is caused by non-discretionary spending is just bonkers IMO. I don’t know of anyone who isn’t cutting back and we’re all middle earners, what exactly do the BoE think we’re spending all this non-existent extra money on?

They feel compelled because of the Fed and are trying to save the pound. 

2.25% isn’t mad high rate

[egg]

14 hours ago, LGTL said:

Hiking interest rates when inflation is caused by non-discretionary spending is just bonkers IMO. I don’t know of anyone who isn’t cutting back and we’re all middle earners, what exactly do the BoE think we’re spending all this non-existent extra money on?

They feel compelled because of the Fed and are trying to save the pound. 

You partly answer your own question at the end. A tanking pound in our import led economy means we're importing inflation. If oil prices were frozen tomorrow, and the pound drops another 10% on the dollar, that's another 10% oil inflation right there. We need to stop the pound falling otherwise the inflation fight becomes more difficult. 

[Lord Duckhunter]

16 hours ago, LGTL said:

Hiking interest rates when inflation is caused by non-discretionary spending is just bonkers IMO. I don’t know of anyone who isn’t cutting back and we’re all middle earners, what exactly do the BoE think we’re spending all this non-existent extra money on?

They feel compelled because of the Fed and are trying to save the pound. 

They moved too late and too slowly. If you think continuing with historically low interest rates is the way to combat inflation, than it’s you that’s bonkers.  

[egg]

16 hours ago, whelk said:

2.25% isn’t mad high rate

Nope, it's very low. People need to appreciate that it's going to go much higher. 

[Wade Garrett]

On 19/09/2022 at 11:27, The Cat said:

Moving to a 4 day week gets my vote.

I used to work with a few people who condensed their full time hours into 4 days and they loved it. Would happily do that myself too.

https://www.theguardian.com/business/2022/sep/19/four-day-week-could-alleviate-cost-of-living-crisis-thinktank-claims

 

I do.  It's great.  

[Klaus Schwab]

2 hours ago, egg said:

Nope, it's very low. People need to appreciate that it's going to go much higher. 

Probably ~4% by end of spring next year. 

[egg]

1 minute ago, Klaus Schwab said:

Probably ~4% by end of spring next year. 

I doubt that very much. Inflation ain't going down after that budget today. Unless she takes rate control back from the BOE, they'll push rates up until they see inflation where they want it to be. I'd hazard a guess we'll see 5% + before spring. In reality, that's still a low rate.