billsballs Posted August 18, 2009 Share Posted August 18, 2009 ...and that is wage inflation and where that is headed. The majority of wages are fixed using RPI and with that negative it suggests stagnant wages at best for the foreseeable. That means less money in peoples back pockets, which leads to less demand for goods, which isn't going to be helped by the banks as credit has dried up. People's hard earned isn't going to go as far if other things are costing more money. Apart from some city spivs and premiership footballers i don't see much wage inflation. I see four day weeks, unpaid holidays, pay freezes and salary reductions all around me. The next leg of this is the public sector, after the election that gravy train will judder to a halt. Without wage inflation or free flowing credit to act as a substitute for it nothings going to go back to how it was. We may get inflation but in my opinion it will come with a lowering in living standards as essentials become more expensive but wages can't keep up. Stagflation - not good for house price growth. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 18, 2009 Share Posted August 18, 2009 ...and that is wage inflation and where that is headed.The majority of wages are fixed using RPI and with that negative it suggests stagnant wages at best for the foreseeable. That means less money in peoples back pockets, which leads to less demand for goods, which isn't going to be helped by the banks as credit has dried up. People's hard earned isn't going to go as far if other things are costing more money. Apart from some city spivs and premiership footballers i don't see much wage inflation. I see four day weeks, unpaid holidays, pay freezes and salary reductions all around me. The next leg of this is the public sector, after the election that gravy train will judder to a halt. Without wage inflation or free flowing credit to act as a substitute for it nothings going to go back to how it was. We may get inflation but in my opinion it will come with a lowering in living standards as essentials become more expensive but wages can't keep up. Stagflation - not good for house price growth. er RPI will be 4->6% by next year... the only reason RPI is low is because it includes mortgage costs, and the VAT discount. House prices are down, and we had a massive cut in IRs, houseprices have been rising for a couple of months now, by Xmas we will have had 12 months since the IR cuts RPI will recover nice and quickly, the figures from today show this has already started. Quote Link to comment Share on other sites More sharing options...
squire Posted August 18, 2009 Share Posted August 18, 2009 (edited) ...and that is wage inflation and where that is headed.The majority of wages are fixed using RPI and with that negative it suggests stagnant wages at best for the foreseeable. That means less money in peoples back pockets, which leads to less demand for goods, which isn't going to be helped by the banks as credit has dried up. People's hard earned isn't going to go as far if other things are costing more money. Apart from some city spivs and premiership footballers i don't see much wage inflation. I see four day weeks, unpaid holidays, pay freezes and salary reductions all around me. The next leg of this is the public sector, after the election that gravy train will judder to a halt. Without wage inflation or free flowing credit to act as a substitute for it nothings going to go back to how it was. We may get inflation but in my opinion it will come with a lowering in living standards as essentials become more expensive but wages can't keep up. Stagflation - not good for house price growth. I disagree. Others are important too. if food and energy prices etc fall then wages don't really need to go up. Wage inflation is interlinked or should be with other inflationary measures. Edited August 18, 2009 by squire Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted August 18, 2009 Share Posted August 18, 2009 er RPI will be 4->6% by next year... the only reason RPI is low is because it includes mortgage costs, and the VAT discount. You forgot that fact that oil was $150 a barrel last july and was only $60 a barrel this July. Oil prices bottomed out last chistmas at around $30. Come christmas the infaltion oil effect will be a 100% rise rather than a 75% fall. Any one of a dozen things could push RPI above 5%. There is nothing left to push it down bar open and undenyable manipulation. Between VAT, Oil and mortgage costs I expect RPI to hit around 10% by christmas. Time to add house prices to RPI maybe??? Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 18, 2009 Share Posted August 18, 2009 (edited) Time to add house prices to RPI maybe??? RPI adjusted for inverted pirates? (RPIIP) Edited August 18, 2009 by moosetea Quote Link to comment Share on other sites More sharing options...
Dorkins Posted August 18, 2009 Share Posted August 18, 2009 Apart from some city spivs and premiership footballers i don't see much wage inflation. I think the silly money days are over for both. The banks are losing money hand over fist despite massive government support (which will not last forever), and eventually losses will lead to wage cuts. Tickets to football matches, merchandise, Sky Sports subscription etc are luxuries that hard-pressed consumers can cut back on when times are hard, and advertising revenues have fallen through the floor. These people are rich, but they are no more immune to all of this than anybody else. They may even suffer more since their takings went up so much in the boom and presumably they are most exposed to the bust. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted August 18, 2009 Share Posted August 18, 2009 I think the silly money days are over for both. The banks are losing money hand over fist despite massive government support (which will not last forever), and eventually losses will lead to wage cuts. You must live on a different planet to me. What exactly has changed to make banks cut wages? Quote Link to comment Share on other sites More sharing options...
Angelfish Posted August 18, 2009 Share Posted August 18, 2009 You lot obviously work under a different contract to me. Wage rises: CPI one year, RPI another year, Chicken Price Index another year, obviously whichever works out the cheapest Lucky for me a pay freeze this year. No negative pay rises......... yet! Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted August 18, 2009 Share Posted August 18, 2009 er RPI will be 4->6% by next year... the only reason RPI is low is because it includes mortgage costs, and the VAT discount. I also think, aside from VAT INCREASING TO 20% the govt will use falling house prices as an excuse for REDUCING THE STAMP DUTY THRESHOLD TO £100,000 OR LESS. Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted August 18, 2009 Share Posted August 18, 2009 I thought it was all about the money supply. The price of chips will increase a bit. The price of houses will plunge. The price of fuel may rocket, but that's down to £ basket case + green taxes. Already happening in cement products. Quote Link to comment Share on other sites More sharing options...
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