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UK Wage Growth inflation going through the roof... Bank of England asleep at the wheel


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"The ONS estimated underlying wage growth, excluding distortions caused by the pandemic, was between 3.9% and 5.1% for average weekly earnings." https://www.reuters.com/world/uk/uk-hiring-surged-june-economy-reopened-ons-2021-07-15/

"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" - Hays Recruitment warning on wage growth... 

Hays warns on wage inflation: https://www.ft.com/content/51a36b50-1ee0-4d6e-9c56-320b3c8dc7b9

and on and on... 

Meanwhile the Bank of England says it's waiting for signs of wage growth... oh, I see. They could try speaking to the ONS! Talk about asleep at the wheel! 

Here's Bloomberg leading on UK wage inflation: https://www.bloomberg.com/news/articles/2021-07-08/u-k-wage-inflation-emerges-with-post-lockdown-staff-shortages

Edited by gruffydd
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  • gruffydd changed the title to UK Wage Growth inflation going through the roof... Bank of England asleep at the wheel

"Warning"? As if wage inflation is or has ever been a bad thing. It's always been a good thing historically.

In a time when everybody is being screwed up the bum without lube, wage inflation is at at least some small consolation. Even if you cannot afford the basics...

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Yea, da wage inflation is good, more shiny stuff for monkey, monkey like. Monkey not like long line at McDonald’s, monkey think other smelly monkeys should not be getting more shiny stuff too.  Monkey not care too much as monkey buy new car with shiny paint to sit in while waiting for burger and do online shiny stuff shopping from de car.   Monkey hear the pretty nurse monkeys getting pay rise, monkey like nurse as dey good monkeys.  
 

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Hilarious though when you think about it, printy printy brings higher prices, people go daft buying it’s the extra money.  Everyone gets a pay rise (hopefully) what’s not to like? Just stick a few zeros on everything and say in an authoritative voice that it’s realignment or something.  Find an economic expert to stand up and talk about it.  Job done.  Average house prices 500k and round we go to 2030 and the next crises!!  

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19 minutes ago, satsuma said:

Hilarious though when you think about it, printy printy brings higher prices, people go daft buying it’s the extra money.  Everyone gets a pay rise (hopefully) what’s not to like? Just stick a few zeros on everything and say in an authoritative voice that it’s realignment or something.  Find an economic expert to stand up and talk about it.  Job done.  Average house prices 500k and round we go to 2030 and the next crises!!  

The game is rigged. You decide, red or black?

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To be honest we are just seeing what played out before, we all know how this goes down.

Hoping for high interest rates and a massive HPC is absurd.

For obvious reasons, landlords in Parliament, capitalism etc etc... just a scent of a possible hpc will soon be met with props galore.

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Does anyone know where I can find a definitive wage inflation, preferably presented between two dates please?

After just over two years without a pay review my employer just handed out a wonderful 5%... I'm not convinced how happy we should be about that.

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1 minute ago, btd1981 said:

Does anyone know where I can find a definitive wage inflation, preferably presented between two dates please?

After just over two years without a pay review my employer just handed out a wonderful 5%... I'm not convinced how happy we should be about that.

Dats a pay cut my dear boy, basically you were asked to suck **** and then patted on the head for swallowing 

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33 minutes ago, Speed1987 said:

To be honest we are just seeing what played out before, we all know how this goes down.

Hoping for high interest rates and a massive HPC is absurd.

For obvious reasons, landlords in Parliament, capitalism etc etc... just a scent of a possible hpc will soon be met with props galore.

More props and natty government wheezes to come, “step right up and get you freebies” they will cry.  “None of your inflation nonsense, we are fighting covid “.  

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11 hours ago, phantominvestor said:

"Warning"? As if wage inflation is or has ever been a bad thing. It's always been a good thing historically.

In a time when everybody is being screwed up the bum without lube, wage inflation is at at least some small consolation. Even if you cannot afford the basics...

This will be the key driver of inflation concerns and interest rate rises... hence it's a bad thing for those worried about IR rises (and the impact on mortgages... the wider property market). 

Speak to any banker re: inflation... the issue that keeps them awake at night is wage inflation. It is with us. 

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2 hours ago, Speed1987 said:

To be honest we are just seeing what played out before, we all know how this goes down.

Hoping for high interest rates and a massive HPC is absurd.

For obvious reasons, landlords in Parliament, capitalism etc etc... just a scent of a possible hpc will soon be met with props galore.

With high wage inflation comes high IRs... so there we have it. It really is that simple. 

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2 hours ago, satsuma said:

Hilarious though when you think about it, printy printy brings higher prices, people go daft buying it’s the extra money.  Everyone gets a pay rise (hopefully) what’s not to like? Just stick a few zeros on everything and say in an authoritative voice that it’s realignment or something.  Find an economic expert to stand up and talk about it.  Job done.  Average house prices 500k and round we go to 2030 and the next crises!!  

Sadly there is no alignment re: productivity increases. Oh dear... they've missed the key aspect. 

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Everyone's getting pay rises, so those with mortgages can afford an increase in monthly payments if IRs go up. More income can also be used to pay any extra taxes needed to cover an increase in the govt's debt repayment bills.... So what's the problem?

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Posted (edited)
2 minutes ago, rantnrave said:

Everyone's getting pay rises, so those with mortgages can afford an increase in monthly payments if IRs go up. More income can also be used to pay any extra taxes needed to cover an increase in the govt's debt repayment bills.... So what's the problem?

Rather more complex of course... 5% wage inflation will be in part offset by higher taxes re: Covid... then there's wider inflation that erodes the value of that wage inflation... and so on. Just two of several issues... 

Wider inflationary pressures erode mortgage affordability... wider inflation will feed through to IR increases... reducing housing affordability, and so on, too. 

Edited by gruffydd
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1 hour ago, gruffydd said:

With high wage inflation comes high IRs... so there we have it. It really is that simple. 

And many will have fixed for 5+ years..

I also really doubt that they'll push interest rates up, the last thing they want is lost confidence in the housing market.

They've proven, throughout the pandemic, they'll do anything to protect house prices.

If interest rates, were to go up, they'd find some way to support the housing market. Otherwise it would be defaults galore.

 

Edited by Speed1987
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41 minutes ago, Speed1987 said:

And many will have fixed for 5+ years..

I also really doubt that they'll push interest rates up, the last thing they want is lost confidence in the housing market.

They've proven, throughout the pandemic, they'll do anything to protect house prices.

If interest rates, were to go up, they'd find some way to support the housing market. Otherwise it would be defaults galore.

 

This Covid end-game challenge is deeply systemic... they won't have a choice. 

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7 hours ago, gruffydd said:

This will be the key driver of inflation concerns and interest rate rises... hence it's a bad thing for those worried about IR rises (and the impact on mortgages... the wider property market). 

Speak to any banker re: inflation... the issue that keeps them awake at night is wage inflation. It is with us. 

 

Wage inflation is only considered to be bad thing if the proles are enjoying it. See the unions and the 1970s.

Presently, they're not.

Quote

Annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate; compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs so increasing average earnings; and base effects where the latest months are now compared with the start of the coronavirus (COVID-19) pandemic when earnings were first affected and pushed down.

 

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5 hours ago, zugzwang said:

 

Wage inflation is only considered to be bad thing if the proles are enjoying it. See the unions and the 1970s.

Presently, they're not.

 

The new proles are people working in IT, etc. - they are. 

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Posted (edited)

Broadbent confirmed the Bank's existing projections - for inflation to peak at 3% - are now way off the mark.

"The MPC expects inflation to rise significantly further, to well over 3%, over the next six months," said Broadbent

...and on it goes. People don't want to see it but it is certain to crash the housing market, and much else. 

https://www.poundsterlinglive.com/economics/15711-broadbent-warns-of-significant-inflation-but-is-coy-on-need-for-interest-rate-rises

https://www.bankofengland.co.uk/speech/2021/july/speech-given-by-ben-broadbent-mismatch

Edited by gruffydd
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