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UK 2.2% June CPI inflation expectations - a total farce!


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27 minutes ago, gruffydd said:

There were two quoted in the article. One currently on the MPC, one due to join in Sep. The vigilence is strong with Mann already - she'll fit right in:

Quote

Haskel’s cautious comments on monetary policy were echoed by Catherine Mann, a former chief economist of the Organisation for Economic Co-operation and Development who is due to join the MPC in September.

At a hearing of the Commons Treasury select committee to confirm her appointment, Mann told MPs the recent rise in inflation was likely to prove temporary.

“I have a lot of different ways of evaluating whether or not that surge appears to be continuing, transitory, or whether it appears to be a spiral. I don’t see it becoming a spiral. I am on the lookout for it but I don’t see it becoming a spiral,” she said.

 

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Posted (edited)
35 minutes ago, Quicken said:

There were two quoted in the article. One currently on the MPC, one due to join in Sep. The vigilence is strong with Mann already - she'll fit right in:

 

I wonder what ways those might be... jeepers these people aren't terribly bright... either that or they have an agenda. Mann seems to have moved around institutes of various types and universities, with the odd year or two working for banks. 

For the life of me I can't even begin to comprehend how someone goes from a PhD to advisor to the World Bank's chief economist. 

She was economic advisor to George Bush in the run-up to his defeat by Clinton (that interlude didn't last long). 

Did she go on to detail her methods, I wonder. 

Edited by gruffydd
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I don't think markets fear inflation - what they fear is interest rate rises.

We've had interest rates too low for at least two decades now. Result - misallocation of capital, zombies everywhere, flatlining productivity, desperate yield hunting, asset price booms, generational inequality.

 

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4 hours ago, Flat Bear said:

One of Ambrose's better articles

Markets fear inflation much more than the delta variant

If central banks don't lance the QE boil now they probably never will, risking soaring inflation that takes the world back to the 1970s

AMBROSE EVANS-PRITCHARD20 July 2021 • 4:51pm

I'll give you a hint... they never will.

Get out of fiat in any way possible.

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Just been in a pub in Otley West Yorkshire nice venue  by the river you still wasnt allowed to go to the bar so ordered 2 pints of lager at the table price was £3.95p each suppose average price for the area, when they came they were 2/3rds of a pint I questioned this was told that they are now a standard offering and that is all I could order(no halfs or pints) when the bill came it also had added 10% service charge. Wonder if things like this are included in the CPI rubbish :(

Edited by papag
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3 hours ago, papag said:

Just been in a pub in Otley West Yorkshire nice venue  by the river you still wasnt allowed to go to the bar so ordered 2 pints of lager at the table price was £3.95p each suppose average price for the area, when they came they were 2/3rds of a pint I questioned this was told that they are now a standard offering and that is all I could order(no halfs or pints) when the bill came it also had added 10% service charge. Wonder if things like this are included in the CPI rubbish :(

I trust you sent them back, or paid around £2.66 a pint? And told them to f**k off re: the service charge?

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5 hours ago, papag said:

Just been in a pub in Otley West Yorkshire nice venue  by the river you still wasnt allowed to go to the bar so ordered 2 pints of lager at the table price was £3.95p each suppose average price for the area, when they came they were 2/3rds of a pint I questioned this was told that they are now a standard offering and that is all I could order(no halfs or pints) when the bill came it also had added 10% service charge. Wonder if things like this are included in the CPI rubbish :(

It should be caught because they will have a price for a pint of beer; not just “a beer”

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Covid will see more people than usual will now not want to go out if they don't have to....they will therefore be spending less, working from home or working local, getting stuff delivered.....people will start to avoid places if they think the prices are too high or they feel unsafe, and if they themselves can do what is on offer for less, similar or better.....technology sees everything now is available from one location, with a local community around.....going forwards but at the same time backwards......good thing or a bad thing?;)

 

Edit to say, if vaccine passports become obligatory it will see many will avoid entering, even those that have been vaccinated twice.

Edited by winkie
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FT: Unilever faces biggest cost rises in a decade, warns chief executive

Quote

The chief executive of Unilever said the consumer goods maker is facing its fiercest inflationary pressures in a decade as the cost of raw materials, packaging and transport soars.

The warning from Alan Jope came as the maker of Domestos bleach, Hellmann’s mayonnaise and Magnum ice cream reported that its underlying operating margin in the six months to June dropped 100 basis points to 18.8 per cent after cost inflation sped up in the second quarter.

 

On the same day:

FT: UK inflation risk hinges on wage growth, warns BoE official

Quote

Rapid price rises for consumer goods are unlikely to last, but UK rate setters will have to watch out for signs of wages increasing at a pace that could lead to more persistent inflation, a senior Bank of England official said on Thursday.

Ben Broadbent, deputy governor for monetary policy, acknowledged that the extent of the rise in UK inflation was hard to explain. Averaged over the past 18 months, it has been only slightly lower than before the pandemic, even though gross domestic product is still well below its pre-crisis level.

There was a good case to argue that some of the contributing factors would be temporary, he said. In particular, the global surge in goods price inflation should slacken as consumers switch back to spending on services and supply bottlenecks ease.

 

So they are 'looking through it' unless we get wage inflation

Edited by stuckinlimbo
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Posted (edited)
33 minutes ago, stuckinlimbo said:

FT: Unilever faces biggest cost rises in a decade, warns chief executive

 

On the same day:

FT: UK inflation risk hinges on wage growth, warns BoE official

 

So they are 'looking through it' unless we get wage inflation

Wage growth is already at 4%+... does the "official" even know. 

As Hays put it (the rec firm): "You’re seeing big opportunities for tech specialists or those in life sciences — they’ve been moving for a 10 per cent [salary increase] before, but now they’re able to get 15 or 20 per cent,” he added.

Repeat for hospitality, catering, etc., etc. Wage growth is on steroids right now. The BoE will be looking at lagging data... not the sharpest bunch. 

Edited by gruffydd
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8 minutes ago, gruffydd said:

Rather interesting because this will erode real incomes... if they don't... that said, their hand will be forced. Wage inflation is already running at 4%+

If their hand will be "forced" it is clear it will only be forced when every other possible avenue has been totally exhausted. 

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1 minute ago, simon99 said:

If their hand will be "forced" it is clear it will only be forced when every other possible avenue has been totally exhausted. 

Close to that point already, hence the pressure from Mervyn King and others. 

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1 minute ago, gruffydd said:

Close to that point already, hence the pressure from Mervyn King and others. 

I expect years more of this "temporary" inflation yet, before they do anything. I'd have sacked the entire MPC years ago if it was up to me by the way.

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16 hours ago, simon99 said:

I expect years more of this "temporary" inflation yet, before they do anything. I'd have sacked the entire MPC years ago if it was up to me by the way.

We expect their hand to be forced before year end (at least, in my office we do). The data may well finish off the current set-up. 

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23 minutes ago, gruffydd said:

We expect their hand to be forced before year end (at least, in my office we do). The data may well finish off the current set-up. 

We'll see. None of them want to be the party poopers in the modern media age.

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17 minutes ago, simon99 said:

We'll see. None of them want to be the party poopers in the modern media age.

God yes, the media really has turned into everyone's worst nightmare... the level of intelligence even from formerly respectable media outlets, like the Daily Telegraph... is at the level of primary school kids, or worse. No doubt there's a reason for that... heaven knows where to start with what's gone wrong with the media. 

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