Inflation

[Horatio Caine]

1 hour ago, Jambo-Jimbo said:

 

I read last week in one of the online taboids when they were going on about the veg shortages, that a cucumber in Tesco was 75p, in Carrefour (France) a cucumber was equivalent to £1.79, a kilo of Tomatoes was £2.75 ish in Tesco and the same in Carrefour was £3.42.

So, yes I think the UK is still a lot cheaper for a lot of food items than they pay in some places on mainland Europe, and that is part of the problem of why there are shortages, as UK supermarkets won't pay the current spike in wholesale prices but the mainland European supermarket chains will, so most of the produce is going to them, as they are willing to pay a higher premium. 

 

Don't know about 3rd cheapest in the World though.

We do great turnips...

[OBE]

22 minutes ago, Footballfirst said:

If I'm dropping off anyone at Edinburgh, I do so at the entrance to the mid-stay car park which is closer to the terminal than the long stay. It's not an official drop off point though, so it's a quick stop, get out and U-turn.

 

The long stay drop off is official. Drive in, take a ticket, get your holiday makers tae feck, drive to the barrier, enter the ticket within 30 mins, jobs a good un!

[The Real Maroonblood]

5 minutes ago, OBE said:

 

The long stay drop off is official. Drive in, take a ticket, get your holiday makers tae feck, drive to the barrier, enter the ticket within 30 mins, jobs a good un!

Good to know.

👍

[Jambo-Jimbo]

1 hour ago, John Gentleman said:

Not if you can't get it you're not. That goes to the heart of these debates. Supermarkets in the UK seem inflexible to supply/demand market forces. Not so in the EU, where prices are rising/falling with supply and demand. If prices are allowed to go up, they'll reach a "friction" point and prospective buyers won't buy, or they may choose to visit their local greengrocer and buy only 2 or 3 tomatoes, rather than a pre-packed 500g at the supermarket. Or, they may choose to go without.

The best 'cure' for high tomato and cucumber prices (and supply) is higher prices.

 

That's because they work by different systems seemingly.

 

UK supermarkets have set prices/budgets for the year/season whilst EU supermarkets have weekly/monthly prices, meaning as you say the EU supermarkets can and often do react in a much more flexable way than UK supermarkets can or are willing to.

[Jambo-Jimbo]

25 minutes ago, Horatio Caine said:

We do great turnips...

 

Do we, don't like the things, the sheep seem to like them though.

[ri Alban]

21 hours ago, Dirk McTarkin said:

 

Not a whinge, Thor, an agenda free, politically neutral, statement of fact. 

You used to know the difference, but I'm not so sure now.

 

 

Aye it's getting dearer by the day, it seems. Thing is, the cost of living across other countries is intrinsically liked to our own via a variety of economic and geographical factors. We should all be worrying about each other.

 

 

Probably just as well, tbh.

No-one gives a feck about anyone, anymore..

[Pans Jambo]

10 hours ago, OBE said:

Can drop off and pick up for free at Edinburgh long stay, 5 min walk to the terminal. In and out within 30 min, no charge. Aberdeen is the same...💡

Its a 5 minute sprint if youre Linford Christie mate 😂

[OBE]

9 hours ago, Pans Jambo said:

Its a 5 minute sprint if youre Linford Christie mate 😂

 

 

Should've been clearer, apologies. Aberdeen, eight minute walk or on-demand shuttle service.

Edited March 3, 2023 by OBE

[Diadora Van Basten]

Do you know the scene in Police Academy when the old lady asks Tackleberry to get her kitty cat out the tree.

 

Replace Tackleberry with interest rates and the kitty cat with inflation and you pretty much have the same scenario.

[jamb0_1874]

Good to see that inflation looks like its finally under control!!! 🙄It will be interesting to see what the BoE does with interest rates now..

[Montgomery Brewster]

6 minutes ago, jamb0_1874 said:

Good to see that inflation looks like its finally under control!!! 🙄It will be interesting to see what the BoE does with interest rates now..

These jokers are clueless. They are still saying inflation will be 2% by December. Walter mittys the lot of them !

[Shooter McGavin]

BoE will probably raise the interest rate to 4.5% tomorrow.

 

The 2% target seems years away, never mind this year.

[Shooter McGavin]

Just checked my savings account interest rate, seems to have increased by 0.45% overnight.

[ri Alban]

2 hours ago, Shooter McGavin said:

BoE will probably raise the interest rate to 4.5% tomorrow.

 

The 2% target seems years away, never mind this year.

This is going to bring the building sites to a close. Our sites are now on a go slow, cause they can't sell.

[BlueRiver]

2% is the target that BoE looks to keep it within but I thought their end of year predictions were that it was be 4-5%? 

[jamb0_1874]

1 hour ago, ri Alban said:

This is going to bring the building sites to a close. Our sites are now on a go slow, cause they can't sell.

 

Its just a minor blip, until the rewards of the high wage economy kicks in... 

[joondalupjambo]

I thought we measured inflation rates 12 months in arrears?

So if inflation was 10.4% last April say and it is only 10 this April then will that not class as a 0.4% drop?

Then if it stays high and there are only small decreases is that not then the new normal?

What I am thinking is not a lot will reduce in price to the consumer across all the sectors they measure to get the figure, e.g. energy, drinks, food, cars, clothing etc.

Actual costs to the suppliers may well drop but price maybe retained at a higher point.

Is that not possible or will businesses all look to being more competitive to attract us in?

Supermarkets are being viewed as keeping prices high when there is possibly, for many items no need to do so.  I am sure there will be other examples, in other sectors where this maybe the case.

 

 

Edited March 22, 2023 by joondalupjambo

[scott herbertson]

5 minutes ago, joondalupjambo said:

I thought we measured inflation rates 12 months in arrears?

So if inflation was 10.4% last April say and it is only 10 this April then will that not class as a 0.4% drop?

Then if it stays high and there are only small decreases is that not then the new normal?

What I am thinking is not a lot will reduce in price to the consumer across all the sectors they measure to get the figure, e.g. energy, drinks, food, cars, clothing etc.

Actual costs to the suppliers may well drop but price maybe retained at the higher price.

Is that not possible or will businesses all look to being more competitive to attract us in?

Supermarkets I reckon are keeping prices high when there is no need to do so for all products.

 

 

 

 

It is just comparing prices now with prices a year ago. So if inflation was 10.4% last April that means prices were higher by 10.4& than they were in 2021. If prices are 10% higher now than they were last April, inflation is 10%

 

So when the government says inflation will be 'halved this year' (one of Sunak's 5 promises) that means whereas the inflation rate was 9.2% in December 2022 and 8.8% in January 2023 it should be 4.6/4.4% in December or January (not being sure which announcement date he was referring to. So if prices in January 2024are 4.4% up in December 2022 as measured by the BOE announcement then Sunak can claim he has met his target.

[scott herbertson]

A good article here

 

https://www.newstatesman.com/spotlight/cost-of-living-crisis/2023/03/rishi-sunak-pledge-tracker-update-inflation

[joondalupjambo]

4 minutes ago, scott herbertson said:

 

 

It is just comparing prices now with prices a year ago. So if inflation was 10.4% last April that means prices were higher by 10.4& than they were in 2021. If prices are 10% higher now than they were last April, inflation is 10%

 

So when the government says inflation will be 'halved this year' (one of Sunak's 5 promises) that means whereas the inflation rate was 9.2% in December 2022 and 8.8% in January 2023 it should be 4.6/4.4% in December or January (not being sure which announcement date he was referring to. So if prices in January 2024are 4.4% up in December 2022 as measured by the BOE announcement then Sunak can claim he has met his target.

OK thanks for that.

My head is probably not in the room with all this.

What I am trying to work out in my mind is if prices are being set too high and then kept higher with no need.  How can that be proved without using inflation as a measurement?

 

I just believe that we are all being "trained" to accept a new normal.

 

 

[ri Alban]

50 minutes ago, jamb0_1874 said:

 

Its just a minor blip, until the rewards of the high wage economy kicks in... 

 

 

 

 

 

[Diadora Van Basten]

I think they were expecting inflation to be 9.9% this month. I read that this is the last month we are comparing post invasion inflation figures with pre invasion inflation figures so it should drop significantly next month.

 

I think yesterday most economists had expected the BOE to hold rates this month but now with this data I think they will raise them again.

 

I know people who are due to come off their fixed rate mortgage deal soon and would have been paying an extra £500 per month now this is going to be even higher.

Edited March 22, 2023 by Diadora Van Basten

[Hungry hippo]

4.25% Base Rate looking very likely tomorrow.

[scott herbertson]

5 hours ago, joondalupjambo said:

OK thanks for that.

My head is probably not in the room with all this.

What I am trying to work out in my mind is if prices are being set too high and then kept higher with no need.  How can that be proved without using inflation as a measurement?

 

I just believe that we are all being "trained" to accept a new normal.

 

 

 

 

There is no way of proving that (under a capitalist system the 'market' is supposed to allow prices to find their level) . What you are suggesting should be dealt with legal by anti-monopoly laws which prevent 'price fixing' by cabals.

 

However if you have too few people in charge of the big conglomerates they can effectively do this off the radar.

[Victorian]

No our fault... global pressures... happening everywhere... our action is reducing inflation... look at us... it's what we're doing... oops... global pressures but...

[periodictabledancer]

5 hours ago, Diadora Van Basten said:

I think they were expecting inflation to be 9.9% this month. I read that this is the last month we are comparing post invasion inflation figures with pre invasion inflation figures so it should drop significantly next month.

 

I think yesterday most economists had expected the BOE to hold rates this month but now with this data I think they will raise them again.

 

I know people who are due to come off their fixed rate mortgage deal soon and would have been paying an extra £500 per month now this is going to be even higher.

Just seen a tweet saying it's INCREASED from 10.1% to 10.4%. 

[Nucky Thompson]

40 minutes ago, periodictabledancer said:

Just seen a tweet 

Really 

 

It's only been on the news all day

[mrmarkus1981_1]

I get the principal in the BoE increasing interest rates in regards to slowing inflation. But surely pricing people out of their houses is counter productive?

 

If your mortgage goes up by £500 and you cant afford it, you are forced to sell and back to square one

[Cade]

Raising interest rates is supposed to make you spend less, so retailers drop their prices to entice you back, so inflation falls.

 

The problem with the UK (and most other Western nations) is that the entire economy is built on a giant bubble of mortgage debt, so interest rates can be a contributory factor in those bubbles bursting.

 

 

[Cade]

Bank of England sets 4.25% base rate.

[Diadora Van Basten]

I had a read online and people are getting pretty angry about this.

 

The general consensus is that inflation is due to supply side policies and raising interest rates is not working but causing a lot of pain to people who already don’t have a lot of money.

 

The BOE have previous for raising interest rates erroneously before the last recession and I think the same thing is happening here.

 

When they first started raising interest rates not a lot of people were affected as most had fixed their interest rates but as time goes the amount of people on fixed rates falls and the large mortgage payment increases kick in.

 

I think they should have been far most cautious in increasing rates from their unprecedented low levels.

 

 

[Hungry hippo]

55 minutes ago, Diadora Van Basten said:

I had a read online and people are getting pretty angry about this.

 

The general consensus is that inflation is due to supply side policies and raising interest rates is not working but causing a lot of pain to people who already don’t have a lot of money.

 

The BOE have previous for raising interest rates erroneously before the last recession and I think the same thing is happening here.

 

When they first started raising interest rates not a lot of people were affected as most had fixed their interest rates but as time goes the amount of people on fixed rates falls and the large mortgage payment increases kick in.

 

I think they should have been far most cautious in increasing rates from their unprecedented low levels.

 

 

 

If rates were very high, there would be more of an argument to support that but 4.25% is a fairly average Base Rate historically. With inflation over 10% I think it is reasonable to no longer have rates at low levels.

 

There are undoubtedly factors impacting inflation that rate rises can't solve but it will definitely help a bit.

 

I speak as someone with plenty left on my mortgage so would prefer rates to be as low as possible from a selfish perspective.

 

It looks likely this will be the last rise for a while anyway and we should start to see inflation reducing soon - although it will still be high.

[Jambo-Jimbo]

10 minutes ago, Hungry hippo said:

 

If rates were very high, there would be more of an argument to support that but 4.25% is a fairly average Base Rate historically. With inflation over 10% I think it is reasonable to no longer have rates at low levels.

 

There are undoubtedly factors impacting inflation that rate rises can't solve but it will definitely help a bit.

 

I speak as someone with plenty left on my mortgage so would prefer rates to be as low as possible from a selfish perspective.

 

It looks likely this will be the last rise for a while anyway and we should start to see inflation reducing soon - although it will still be high.

 

I seen a chart, I think it might have been on Sky News which showed that in 2004 interest rates were something like 4%, rising to almost 6% before the 2008 crash, it's only really since 2008 that the rates have been so low at under 1%.  I've heard it mentioned many a time on the news that rates had to rise at some point in time, they just could not stay at 1% or lower forever, that time has been the last year or so, it would seem.

[Hungry hippo]

19 minutes ago, Jambo-Jimbo said:

 

I seen a chart, I think it might have been on Sky News which showed that in 2004 interest rates were something like 4%, rising to almost 6% before the 2008 crash, it's only really since 2008 that the rates have been so low at under 1%.  I've heard it mentioned many a time on the news that rates had to rise at some point in time, they just could not stay at 1% or lower forever, that time has been the last year or so, it would seem.

 

Yeah, rates were only very low because of the combination of both the economy doing poorly and inflation being low.

 

Once that changed significantly with really high inflation, a return to medium level interest rates was inevitable.

[Jambo-Jimbo]

19 minutes ago, Hungry hippo said:

 

Yeah, rates were only very low because of the combination of both the economy doing poorly and inflation being low.

 

Once that changed significantly with really high inflation, a return to medium level interest rates was inevitable.

 

I think part of the problem is that for some people, ultra low interest rates are all they've ever known and for many they just never thought rates would rise to 4% or so.  I can well remember interest rates of 8%, 9%, 10%, even 15%, I had a mate who was taking a mortage out and was told to budget for rates of 12% interest, I think the rate was something like 8 or 9% at the time, such was the crazy world of the '80's.

[BlueRiver]

1 hour ago, Jambo-Jimbo said:

 

I think part of the problem is that for some people, ultra low interest rates are all they've ever known and for many they just never thought rates would rise to 4% or so.  I can well remember interest rates of 8%, 9%, 10%, even 15%, I had a mate who was taking a mortage out and was told to budget for rates of 12% interest, I think the rate was something like 8 or 9% at the time, such was the crazy world of the '80's.

 

Definitely not wrong. I've been boring the tits off my mates for about 5 years warning about getting too used to credit at low rates and that it's not the historical norm. 

 

[Pans Jambo]

Trouble is, folks have maxed out their credit limits with £400,000 new build shoe box lego houses then maxed out their credit cards decorating them like a tarts palace then coated themselves in Channel clobber to make themselves look rich and then taken finance on a BMW X5 whilst booking a fortnight in ‘Marbs’. 
 

ALL on low interest rates. 
 

It’s all they know. It’s normal behavior for them. It’ll end in tears. 

[Cade]

Exactly the same as happens before every major crash.

 

Every Western economy is built on debt. Whether that be National, Corporate or Personal debt. 

Everybody is encouraged to borrow to the hilt and spend, spend, spend when interest rates are low, so the economy looks good.

 

Then rates go up and nobody can pay back the loans.

 

Happens every 10-15 years or so and we never seem to learn anything.

[theshed]

14 minutes ago, Pans Jambo said:

Trouble is, folks have maxed out their credit limits with £400,000 new build shoe box lego houses then maxed out their credit cards decorating them like a tarts palace then coated themselves in Channel clobber to make themselves look rich and then taken finance on a BMW X5 whilst booking a fortnight in ‘Marbs’. 
 

ALL on low interest rates. 
 

It’s all they know. It’s normal behavior for them. It’ll end in tears. 

The amount of people I see in their 20s driving around in cars that must be valued at over 50k is unbelievable.  
I know they are leased ect but some cars must cost £500 a month minimum 

 

I would say I’ve got a good job but could never afford some of these cars you see youngsters driving around in nowadays. 
 

By the time they pay the car, new house, council tax then have to heat the house I honestly don’t know how some of them sleep at night 

[BlueRiver]

31 minutes ago, Pans Jambo said:

Trouble is, folks have maxed out their credit limits with £400,000 new build shoe box lego houses then maxed out their credit cards decorating them like a tarts palace then coated themselves in Channel clobber to make themselves look rich and then taken finance on a BMW X5 whilst booking a fortnight in ‘Marbs’. 
 

ALL on low interest rates. 
 

It’s all they know. It’s normal behavior for them. It’ll end in tears. 

 

 

and honestly I'll find it hard to have too much sympathy when it does. 

[Shooter McGavin]

25 minutes ago, theshed said:

The amount of people I see in their 20s driving around in cars that must be valued at over 50k is unbelievable.  
I know they are leased ect but some cars must cost £500 a month minimum 

 

I would say I’ve got a good job but could never afford some of these cars you see youngsters driving around in nowadays. 
 

By the time they pay the car, new house, council tax then have to heat the house I honestly don’t know how some of them sleep at night 

Me too, and it makes me cringe to be honest.

 

£50k car on finance parked outside a rented council house, just doesn’t make any sense.

[Jambo-Jimbo]

14 hours ago, Pans Jambo said:

Trouble is, folks have maxed out their credit limits with £400,000 new build shoe box lego houses then maxed out their credit cards decorating them like a tarts palace then coated themselves in Channel clobber to make themselves look rich and then taken finance on a BMW X5 whilst booking a fortnight in ‘Marbs’. 
 

ALL on low interest rates. 
 

It’s all they know. It’s normal behavior for them. It’ll end in tears. 

 

I've told the story of my son being friends with someone whose parents were like that, fancy new build 3/4 bedroom, 2 flashy BMW's or Mercs in the drive, skiing holidays, other expensive holidays, designer clothes, you name it, but that was mainly just for the mum & dad, the kids often went hungry, we used to feed our laddies friend every now and then, anyway the mother lost her job and within a few months the whole house of cards came crashing down and they lost everything and I mean everything, probably the shirt on their backs as well, the whole thing was built on debt, that they just couldn't pay if either one of them feel ill or lost their job. 

 

[Pans Jambo]

32 minutes ago, Jambo-Jimbo said:

 

I've told the story of my son being friends with someone whose parents were like that, fancy new build 3/4 bedroom, 2 flashy BMW's or Mercs in the drive, skiing holidays, other expensive holidays, designer clothes, you name it, but that was mainly just for the mum & dad, the kids often went hungry, we used to feed our laddies friend every now and then, anyway the mother lost her job and within a few months the whole house of cards came crashing down and they lost everything and I mean everything, probably the shirt on their backs as well, the whole thing was built on debt, that they just couldn't pay if either one of them feel ill or lost their job. 

 

That story will be fairly common if the interest rates keep going up I would think.

[Diadora Van Basten]

I think the BOE and Fed have raised interest rates far too fast.

 

For example if a bottle of wine goes up in September 22 from £7 to £7.75 then that it an increase of 10.71%.
 

The inflation rate for that bottle of wine will be 10.71% for an entire year whether the BOE raise interest rates to 1000% or lower them to 0% during that year.
 

In October 2023 assuming no further price increases then the inflation rate on that bottle of wine will be 0%.

 

The Bank of England seem to be raising interest rates each month then scratching their head why the inflation rate hasn’t fallen. What they should be doing is increasing rates every three months and monitoring the results.
 

 

[Jambo-Jimbo]

2 hours ago, Pans Jambo said:

That story will be fairly common if the interest rates keep going up I would think.

 

More than likely.

 

P.S. What is it they say, near enough everybody are only 2 or 3 pay checks away from poverty or something like that.

Edited March 24, 2023 by Jambo-Jimbo

[joondalupjambo]

It is funny many folk have been saying for years about all these folk living on debt yet all we see is more houses, more lease cars, more bling and just generally more.  If high levels of debt is being used for so many then why has the house of cards not crashed already?  It does not seem to add up because this cost of living crisis on top of Covid should have wiped out a lot more money wise than it appears to have done.  

[BlueRiver]

24 minutes ago, joondalupjambo said:

It is funny many folk have been saying for years about all these folk living on debt yet all we see is more houses, more lease cars, more bling and just generally more.  If high levels of debt is being used for so many then why has the house of cards not crashed already?  It does not seem to add up because this cost of living crisis on top of Covid should have wiped out a lot more money wise than it appears to have done.  

 

Because they can still afford the repayment at the low rates offered. The interest rates increasing on those loans and finance arrangements coupled with high inflation will certainly put a few to the sword. 

 

 

[periodictabledancer]

34 minutes ago, joondalupjambo said:

It is funny many folk have been saying for years about all these folk living on debt yet all we see is more houses, more lease cars, more bling and just generally more.  If high levels of debt is being used for so many then why has the house of cards not crashed already?  It does not seem to add up because this cost of living crisis on top of Covid should have wiped out a lot more money wise than it appears to have done.  

My missus work for a mortgage advice company and she told me lenders are MUCH more switched on to risky lending now. Borrowers have to submit a precise income/spending plan and there are more than a few that don't "pass" meaning they can't get the full amount or they might be rejected completely. Its over a year since she told me lenders expect borrowers to be able to absorb increased rates to some degree, almost as if they were expecting rates to rise (significantly) eventually . 

[Lovecraft]

19 hours ago, Cade said:

Exactly the same as happens before every major crash.

 

Every Western economy is built on debt. Whether that be National, Corporate or Personal debt. 

Everybody is encouraged to borrow to the hilt and spend, spend, spend when interest rates are low, so the economy looks good.

 

Then rates go up and nobody can pay back the loans.

 

Happens every 10-15 years or so and we never seem to learn anything.

[Diadora Van Basten]

17 hours ago, periodictabledancer said:

My missus work for a mortgage advice company and she told me lenders are MUCH more switched on to risky lending now. Borrowers have to submit a precise income/spending plan and there are more than a few that don't "pass" meaning they can't get the full amount or they might be rejected completely. Its over a year since she told me lenders expect borrowers to be able to absorb increased rates to some degree, almost as if they were expecting rates to rise (significantly) eventually . 

I think they stress test to see if you can afford an interest rate of 5%. For those coming off a fixed rate the banks SVR will now be close to 7%.