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Snugglybear

Profit Warnings, Number Of Workers On Low Pay, Both Up

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Both from the BBC

http://www.bbc.co.uk/news/uk-politics-29771470

Those earning less than two thirds of median hourly pay - equivalent to £7.69 an hour - rose by 250,000 to 5.2m last year, the Resolution Foundation said.

http://www.bbc.co.uk/news/uk-29771754

Profit warnings by UK-listed firms have risen to their highest summer level in six years, according to a new report.

The report, by the consultancy firm EY, said quoted firms issued 69 profit warnings in the third quarter of 2014, up from 56 in the same period in 2013.

It is the highest level for the three-month period to 30 September since 2008, the forecaster added.

Supermarket giant Tesco and retailer Next were among the companies to issue profit warnings during the period.

Profit warnings are issued by companies quoted on a stock market to alert investors that profits will be lower than in the previous year.

The survey said that despite a rise in economic input, firms were facing crowded and competitive markets.

It also said bargain-hunting customers, rapid structural change and, until recently, a strong pound had hampered progress.

My bolding. Bargain-hunting - or borassic?

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They have tried forcing wages down, replacing lost earnings with increased debt and tax credits+benefits and now those are not enough to sustain the monster. Where next or has it run it's course? One thing is for sure and that is the last thing that is needed is lower wages but in a race to the bottom, that is where all roads will lead.

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If houses devour every spare penny in the economy, then the investment-starved remainder tends inevitably towards third-world. Meaning the only way to compete is on price. So of course wages have to fall.

We're not there yet, and people do still invest in productive industry. But HPI is a downward spiral, and a round of profit warnings is another blow to confidence and investment in the productive economy.

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If houses devour every spare penny in the economy, then the investment-starved remainder tends inevitably towards third-world. Meaning the only way to compete is on price. So of course wages have to fall.

We're not there yet, and people do still invest in productive industry. But HPI is a downward spiral, and a round of profit warnings is another blow to confidence and investment in the productive economy.

Exactly.

It is so obvious yet nobody in government seems to get it.

At the moment I live in a bog average house - it is fine and I could live here long term with wife and 2 kids but it is small. To get anything even approaching a nice family house I'd be having to pay well in excess of £500k. Here is what almost £500k buys you now http://www.rightmove.co.uk/property-for-sale/property-30677535.html

Were nice family homes "only" £300k like they were 10 years ago (when earnings were the same) then I could use all my savings to set up a business or spend on consumer goods/services.

Surely it is massively harming the economy to have us live in hugely expensive houses and have no other income to circulate?

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Can't pay, won't pay....can't pay, can't borrow...can't pay or can't borrow, can't spend......

You either filter money to the top that invest into investing, to grow more for themselves off the back of the low paid or filter some back into the pockets of the lower paid workers, the few rich don't spend and the growing poor can't spend = stalemate. ;)

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Exactly.

It is so obvious yet nobody in government seems to get it.

At the moment I live in a bog average house - it is fine and I could live here long term with wife and 2 kids but it is small. To get anything even approaching a nice family house I'd be having to pay well in excess of £500k. Here is what almost £500k buys you now http://www.rightmove.co.uk/property-for-sale/property-30677535.html

Were nice family homes "only" £300k like they were 10 years ago (when earnings were the same) then I could use all my savings to set up a business or spend on consumer goods/services.

Surely it is massively harming the economy to have us live in hugely expensive houses and have no other income to circulate?

Of course they get it, but no government has ever won an election with policies that benefit the nation in the long-term. It's all put it on the nation's credit card and pray that they win the global lottery or some technological innovation that will magically boost growth.

There is a reason that we get the government we deserve. Once the current situation affects the majority then we might hear some serious talk and no later.

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Every successful party since the mixed economy was invented has won by credit expansion. All money is credit and all increases in the money supply involves projections about future demand that are not certain but a guess. No Government can be prudent as no Government can predict future demand and productivity growth. But they must win elections. No British Cabinet has ever said no to the city or tried to reduce dependency on finance, nor will they.

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