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My New Economic Theory

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Hi,

This one popped into my head the other day, so I thought I'd share it with you.

In the USA, fuel has costs less and has been taxed less than in the UK. Fuel prices increase and margins are squeezed but can be absorbed. I'm thinking of some kind of fuel to wages and / or house price ratio thats higher than in the UK, i.e. there's a suggestion that either wages can increase along with inflation caused by rising fuel costs, or house prices should fall.

In the UK, fuel costs are high and are taxed to death. We're seeing the effects of increased costs and falling retail sales already with 120K+ redundancies in the last 4 months or so. There's no room for inflation as manufacturers are effectively "broke". Maybe therefore we'll get deflation instead? Afterall, house prices are added to the inflation measure this year whereas they haven't been in previous years... and there's an awful lot of unsold property stacking up out there.

I think it's been said before. USA inflation, UK deflation. Any thoughts on this?

AF

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Hi,

This one popped into my head the other day, so I thought I'd share it with you.

In the USA, fuel has costs less and has been taxed less than in the UK. Fuel prices increase and margins are squeezed but can be absorbed. I'm thinking of some kind of fuel to wages and / or house price ratio thats higher than in the UK, i.e. there's a suggestion that either wages can increase along with inflation caused by rising fuel costs, or house prices should fall.

In the UK, fuel costs are high and are taxed to death. We're seeing the effects of increased costs and falling retail sales already with 120K+ redundancies in the last 4 months or so. There's no room for inflation as manufacturers are effectively "broke". Maybe therefore we'll get deflation instead? Afterall, house prices are added to the inflation measure this year whereas they haven't been in previous years... and there's an awful lot of unsold property stacking up out there.

I think it's been said before. USA inflation, UK deflation. Any thoughts on this?

AF

Not just absorbtion of inflation, but also absorbtion of higher taxation. They have lower levels of tax, and therefore probably have more scope to raise them.

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  • 301 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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