Thursday, Aug 17, 2006

I'm not surprised

Guardian: Surprise fall in spending

Why is it that when consumer spending was flying, no-one considered it a reason for a rate hike, but now it's fallen off a bit lazy journalist retards are spouting that it means the bank won't be able to raise rates again?

Posted by inbreda @ 01:40 PM (2825 views)
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3 Comments

1. paul said...

There will be another rate rise don't worry.

Powergen just announced a massive price hike and remember these energy companies supply businesses too. Don't underestimate the potency of energy price rises to fuel inflation. It's a race against time for the MPC too, because if people start demanding higher wages (as they are doing in the public sector right now), we'll get secondary inflation which the MPC will have to work extremely hard to curtail.

Real inflation for the elderly is soaring too. Because they don't consume the same amount of DVD players and champagne as the rest of us (joke), inflation for them is more like 4 or 5% on the governments measures. If they don't stop that too, they'll be heading for trouble.

Agreed, the MPC could just ignore those things and think about their house values plummeting but it'd be at the expense of the soaring inflation.

Thursday, August 17, 2006 02:38PM Report Comment
 

2. inbreda said...

True. Wasn't there strike action at post office sorting centres a few days ago? Although I don't think it was purely about wages, it's a good first sign.

Do we start blaming the unions now or just when the neu labour party tell us to?

Thursday, August 17, 2006 03:29PM Report Comment
 

3. P. O. O. R said...

Surely people only have so much money they can afford to spend each month, so as the utility bills, petrol etc etc increase each month there is less money to spend on the luxury goods in the high street. Unless people burden themselves with credit card debt and loans - Oh I forgot, they have already done that, and are now paying more interest every month. As all this starts people want more money, so the push for higher increases in wages and everything starts to go round in circles. The next 6 months are going to be very interesting.

Thursday, August 17, 2006 07:03PM Report Comment
 

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