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seb197

How Will We Not Get Wage Inflation?

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I don't know what to do. I just don't see the hpc in my area. I bid on houses I like but nothing gets accepted. (last offer 2.5% under)

I worry my deposit is getting destroyed by inflation. I can't lock it into any better rates as I need access. Got bulk of it in 2.8% savings account, minimal amount in zopa for the curiosity factor and about another 3k in silver as long term and un touched.

Can someone tell me why we won't get the wage inflation to cover the actual inflation going on? If we do won't houses just stay at their same level... I am just in such a muddle.

I guess I'm having a bit of a wobble and the fear of losing what I have saved over several years scares the shit out of me...

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Can someone tell me why we won't get the wage inflation to cover the actual inflation going on? If we do won't houses just stay at their same level... I am just in such a muddle.

1. Greater competition for jobs due to ongoing redundancies naturally leads to wage reductions as employers can advertise at low wages knowing they will still get reasonable applications

2. Unions not powerful enough to do anything about this.

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I don't know what to do. I just don't see the hpc in my area. I bid on houses I like but nothing gets accepted. (last offer 2.5% under)

I worry my deposit is getting destroyed by inflation. I can't lock it into any better rates as I need access. Got bulk of it in 2.8% savings account, minimal amount in zopa for the curiosity factor and about another 3k in silver as long term and un touched.

Can someone tell me why we won't get the wage inflation to cover the actual inflation going on? If we do won't houses just stay at their same level... I am just in such a muddle.

I guess I'm having a bit of a wobble and the fear of losing what I have saved over several years scares the shit out of me...

The businesses that I know are just struggling to keep above water. The chance of a 4%+ pay rise is just not going to happen for the foreseeable future.

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I don't know what to do. I just don't see the hpc in my area. I bid on houses I like but nothing gets accepted. (last offer 2.5% under)

I worry my deposit is getting destroyed by inflation. I can't lock it into any better rates as I need access. Got bulk of it in 2.8% savings account, minimal amount in zopa for the curiosity factor and about another 3k in silver as long term and un touched.

Can someone tell me why we won't get the wage inflation to cover the actual inflation going on? If we do won't houses just stay at their same level... I am just in such a muddle.

I guess I'm having a bit of a wobble and the fear of losing what I have saved over several years scares the shit out of me...

The question that you are asking is really about the means by which inflation leads to wage increases.

In previous instances of inflation, both goods and labour markets were quite local which gave labour pricing power when its costs rose because of inflation.

In this instance of inflation, many more goods and labour markets are global which reduces labour's pricing power when its costs rose because of inflation.

Even in labour markets which do not face global competition such as the public sector are being squeezed because of the fiscal mess that we are in.

Personally, I do not see a transmission mechanism from higher inflation to higher wages.

What I do see is stagnant to lower wages and increasing costs for labour which will squeeze household incomes in an environment where lending practices are returning to more historical norms. These factors are putting downward rather than upward pressure on house prices.

Until house prices return to more traditional affordability levels (either through lower prices or higher incomes), I do not see a rush to borrow money against a house.

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snip

Personally, I do not see a transmission mechanism from higher inflation to higher wages.

snip

Ill name one for you.

PAY SCALES.

saying that, some posters are proud they have gotten their 4% rises by negotiation...they forget, 40% of the UK are on payscales, so they get their rises AUTOMATICALLY.

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Ill name one for you.

PAY SCALES.

saying that, some posters are proud they have gotten their 4% rises by negotiation...they forget, 40% of the UK are on payscales, so they get their rises AUTOMATICALLY.

You are assuming all public sector workers are not at the top of their payscales, which is a false assumption. If they have been in their job more than a few years it is highly likely they are.

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We will.

International competition will push up wages.

If you don't raise wages for, say, fruit pickers, then the Polish fruit pickers will go elsewhere. So fruit picking wages will be up.

Pressure on the government to raise benefits and minimum wage will operate at the low end.

The question is - will houses fall faster than inflation?

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Yes payscales for senior public sector are all but exhausted. The clamp down on promotion will stop moving onto different grades. A good friend of mine is a civil servant and hes not had a pay rise in years and years. And I believe hes dedicated to his work. PS Hes a cop so its not a non job. I myself have not had a payrise in years either. We just released or results, and our share price rose over 20% on the back. We then get told as a company the next day - no pay rises for anyone. They do this because they can.

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I don't know what to do. I just don't see the hpc in my area. I bid on houses I like but nothing gets accepted. (last offer 2.5% under)

I worry my deposit is getting destroyed by inflation. I can't lock it into any better rates as I need access. Got bulk of it in 2.8% savings account, minimal amount in zopa for the curiosity factor and about another 3k in silver as long term and un touched.

Can someone tell me why we won't get the wage inflation to cover the actual inflation going on? If we do won't houses just stay at their same level... I am just in such a muddle.

I guess I'm having a bit of a wobble and the fear of losing what I have saved over several years scares the shit out of me...

House prices are starting to go down, they're just sticking a bit longer in some places. So if your deposit is going to be used for a house then inflation isn't eating it away for that purpose.

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The businesses that I know are just struggling to keep above water. The chance of a 4%+ pay rise is just not going to happen for the foreseeable future.

There are always winners and losers. Just because we're in sh1t street as a nation doesn't mean every individual is suffering, and those that aren't are sat wondering what all the fuss is about.. and they're the ones buying houses.

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The question that you are asking is really about the means by which inflation leads to wage increases.

In previous instances of inflation, both goods and labour markets were quite local which gave labour pricing power when its costs rose because of inflation.

In this instance of inflation, many more goods and labour markets are global which reduces labour's pricing power when its costs rose because of inflation.

Even in labour markets which do not face global competition such as the public sector are being squeezed because of the fiscal mess that we are in.

Personally, I do not see a transmission mechanism from higher inflation to higher wages.

What I do see is stagnant to lower wages and increasing costs for labour which will squeeze household incomes in an environment where lending practices are returning to more historical norms. These factors are putting downward rather than upward pressure on house prices.

Until house prices return to more traditional affordability levels (either through lower prices or higher incomes), I do not see a rush to borrow money against a house.

Good post. To top it all the companies that have feasted on the inflation already in the pipe will find it acts increasingly negatively in regards their trading postion as their customers get crushed under inflation and their own input costs continue to soar - with the backdrop of already levitated costs they will be forced to shed more employees and offshore more, not increase employment and wages.

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House prices are starting to go down, they're just sticking a bit longer in some places. So if your deposit is going to be used for a house then inflation isn't eating it away for that purpose.

I have seen a change in sentiment in the last six months,and the downward spiral in price has started ,it may be slow at the the moment but I still think it will be greater than the rate of inflation

A bit of topic but to me it looks like the writing is on the wall for the EA and they are the one`s who are trying to put a floor under ,over priced bricks, it`s sink or swim time for them

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Because we aren't all bankers? It would appear Mystic Merv isn't too bothered about wage inflation of the top banking executives.

Merv's been quite upfront about it - food and fuel inflation running at 10% he's not concerned about, it's just wage inflation for non-banksters that worries the elite.

Considering unemployment is increasing, how many workers will be demanding inflation busting pay rises? Exactly. Given the precarious nature people's personal finances, I reckon firms can just freeze wages and there'll be barely a murmur of discontent. One reason why I think deflation will be coming to the UK soon (bar non-discretionary items).

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There was no wage inflation in the boom, why would we get it in the bust? Because things cost more so we need it? Does that mean we get it? Go to the owner of your company and tell them you need more money because the cost of everything has gone up. He wont say sure fair enough. He will say 'the cost of everything hasn't just gone up for you, it's gone up for the company as well. And business has slowed as well. I was considering if we can afford you at all actually, at your present level. A rise? Furthest thing from my mind son.'

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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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