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Uk Inflation In Shock Jump To 4.4Pc And Borrowing Rises

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Shocking.

Revisiting my predictions for RB's Christmas 3 - not far to go on the inflation number.

Actually I think this is healthy inflation. Falling asset prices, but rises in the basics ultimately will force wage rise as per the 1970s. Hopefully property will stay stagnant.

Edited by Mikhail Liebenstein

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Revisiting my predictions for RB's Christmas 3 - not far to go on the inflation number.

Actually I think this is healthy inflation. Falling asset prices, but rises in the basics ultimately will force wage rise as per the 1970s. Hopefully property will stay stagnant.

The last thing you are going to see are wage rises like the 70's and that is why the situation we are in now is far worse than anything we had in the 70's.

When ever I speak to anyone who has a handle on how dire the situation is many that were working in the 70/80/90/00's their honest answer is that they do not know how this is all going to end up.

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Guest spp

The last thing you are going to see are wage rises like the 70's and that is why the situation we are in now is far worse than anything we had in the 70's.

When ever I speak to anyone who has a handle on how dire the situation is many that were working in the 70/80/90/00's their honest answer is that they do not know how this is all going to end up.

Maybe you should be asking Jim Rogers or Bob Chapman.

The news seems to be missing the 20 YEAR HIGH RPI!

Edited by spp

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The last thing you are going to see are wage rises like the 70's and that is why the situation we are in now is far worse than anything we had in the 70's.

The sick thing is when you get economists pontificating that this inflation is OK because we haven't got wage inflation. As if the population getting poorer were just a statistic

Some people have forgotten what the purpose of an economy is.

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The sick thing is when you get economists pontificating that this inflation is OK because we haven't got wage inflation. As if the population getting poorer were just a statistic

Some people have forgotten what the purpose of an economy is.

This is exactly what I thought when watching Sky news a few hours ago.

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The sick thing is when you get economists pontificating that this inflation is OK because we haven't got wage inflation. As if the population getting poorer were just a statistic

Some people have forgotten what the purpose of an economy is.

If you look back maybe for the last 60+ years our economy has survived on wage inflation. People always bought houses that they really could not afford , but within a few years due to wage inflation they could afford them, then they became dirt cheap compared to their ever increasing earnings. This also gave the market sentiment people were told to load up with mortgage debt and would be laughing in a few short years and this worked for most people time and time again apart from the blip at the end of the 80's start of the 90's.

When lower wage inflation kicked in so did lower interest rates and higher x earnings mortgages along with OR mortgages , this kept the whole show going .

But that has now hit the buffers. With stagnent or falling wages while costs for essentials are soaring the average persons debt is getting a bigger burden not smaller as time goes by , this just does not work. Add to that the other debts such as LOANS, CC, OVERDRATHS AND SECOND CHARGES things that were very limited years ago and we have a recipie for disaster .

As the jobs in the private sector dried up the Labour governement took many on in the public sector . Call me Dave now cutting these jobs out and saying the private sector is going to pick these people up is deluded as the guy who thinks property only ever goes up.

I see more unemployment , more people in empolyment not being able to pay their way , a bigger govenment debt , more defaults, more banks in trouble . As i said in the earlier post many people like myself do not know how this is going to end up , the figures do not add up and figures always have to add up otherwise you have caos. The figures have not added up for years but they have meddled with the figures . IF YOU LIE WITH FIGURES THEY ALWAYS CATCH YOU OUT IN THE END.

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The sick thing is when you get economists pontificating that this inflation is OK because we haven't got wage inflation. As if the population getting poorer were just a statistic

Some people have forgotten what the purpose of an economy is.

That can't last. People don;t get wage increases because someone comes up to them and says 'wow you're underpaid, have some more'.

It happens because the costs of living rise and because people take to the streets, strike, renegotiate - we haven't really felt that yet... at all... there is much of that to come as the inflation squeeze takes place.

The reality is that the government and BoE can play the fudge game for only sooo long... people are feeling the inflation pinch and the longer it goes on the worse it gets. The problem is, as i've repeated many times on many boards - the inflation gap between CPI/RPI and IR's is compounding, the longer IR are left low whilst real inflation is growing the worse the problem gets.

I believe there is a protest this weekend at the cuts - that i expect will be relatively benign... the ones that come when people have been out of work for many years and can;t afford to feed their kids or pay for their homes any longer leave the potential serious civil unrest.

This is a shell game... we're running out of shells...

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That can't last. People don;t get wage increases because someone comes up to them and says 'wow you're underpaid, have some more'.

It happens because the costs of living rise and because people take to the streets, strike, renegotiate - we haven't really felt that yet... at all... there is much of that to come as the inflation squeeze takes place.

But that is the big difference now to the 70's. Back then we had far less unempolyment and big strong unionised industries. The Big unions got the rises and other companies followed suit ( so yes in theroy someone did come up and just give you a rise ) If you did not have a union fighting for you . In the public sector the miners set the bench mark and the private sector was led by the big car giants like fords and vauxhall. That is all gone people work within smaller companies and there is very little union impact. With 20 people queuing up for every job there will not be wage rises unless someone is in a very specialized field.

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Another aspect on the wage front is that in many jobs the wages have been falling for years. As people have left or retired new entrants have been bought in under different contracts with less money and benefits , more people are temps earning less money on short term contracts and/or do not work for the actual company where they are employed but for an outside contractor again on less money. This has happened in both the public and private sector . Looks all good for the companies that get the cheaper labour but now we are finding that the cheaper labour cannot sustain an active growing economy.

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The sick thing is when you get economists pontificating that this inflation is OK because we haven't got wage inflation. As if the population getting poorer were just a statistic

Some people have forgotten what the purpose of an economy is.

Any more of that and you'll be called a socialist.....the population are units of labour....the purpose of the economy is to make those pulling the levers as much money as possible. There was never any other purpose.

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Another aspect on the wage front is that in many jobs the wages have been falling for years. As people have left or retired new entrants have been bought in under different contracts with less money and benefits , more people are temps earning less money on short term contracts and/or do not work for the actual company where they are employed but for an outside contractor again on less money. This has happened in both the public and private sector . Looks all good for the companies that get the cheaper labour but now we are finding that the cheaper labour cannot sustain an active growing economy.

The mass of people are going to get hold of the printing press - one way or another. They might vote for it, they might seize it in a revolution, they might burn stuff until it prints for them, but they will acquire it.

That's how all these stories end.

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Another aspect on the wage front is that in many jobs the wages have been falling for years. As people have left or retired new entrants have been bought in under different contracts with less money and benefits , more people are temps earning less money on short term contracts and/or do not work for the actual company where they are employed but for an outside contractor again on less money. This has happened in both the public and private sector . Looks all good for the companies that get the cheaper labour but now we are finding that the cheaper labour cannot sustain an active growing economy.

Great point Miko. That is the big reason people don't see that there have been wage cuts.

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Its a big reason this inflation seems more painful than in the 70's, even though the 70's inflation was higher. In the 70's most people were getting wage increases to go along with the inflation. And as Miko pointed out their mortgage was in nominal terms. So in time their mortgage was small.

Today inflation is less, say 3% for arguments sake. But if that goes along with a 2% wage reduction(say a wage freeze and reduction in overtime hours), that 3% feels a lot higher.

In the first 2 years of the economic crisis this burden was somewhat reduced by lowering interest rates and people refinancing into variable rates.

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Merv has no need to hike as inflation is having zero impact on the 2 key fundamentals:

1. Bonds--Fitch have reiterated our AAA rating which gives us favourable borrowing rates

2. Sterling--a negative fundamental such ass inflation is good news for currency strength

thus:

3. Unemployment is worsening and eventually will drag down prices as unemployed people spend less

4. A hike in IR will make all the above that much worse.

inflation is the LEAST of Merv's concerns. An impending HPC will destroy the banks again requiring another massive bailout. Higher IR and a devalued currency will hit the banksters bonuses unless they can find a way to skim and convert to CHF or some other currency.

Edited by Realistbear

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  • 311 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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