Monday, Dec 11, 2006

MPC suggest rise in immigration is holding down inflation

TimesOnline: Immigrants help to hold down interest rates, report suggests

Researchers linked to the Monetary Policy Committee MPC suggest that the fourfold rise in net immigration is helping to hold down inflation but also helping to keep growth up.
The researchers suggest that successive waves of immigration may be required to support the previous wave.

Posted by denzil @ 09:39 AM (499 views)
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1. Chillilizard said...

The lower inflation and increased growth comes from a willingness of immigrants to work for very low wages. The essential point here is that these people are an 'underclass' living in crowded conditions and presenting their employers with an economic advantage that is 'abnormal'. By that I mean, in a healthy economy you would not see this.

Also in the metro this morning, 1.24 million british youngsters are a 'failed generation', can't find work and end up under-educated and on the dole.

These immigrants will establish themselves and then go on to earn much more, and become a crucial part of the economy, much like the indian people have. They work because they have to. As they work they learn and then they go on to make things better for themselves.

By contrast the lost generation will sit on the dole and complain that all these immigrants are getting everything.

What I suggest is get rid of the dole; the need for people to work will drive down wages, those providing jobs will make their business's grow which will translate into growth in the economy, which will provide more jobs. The BNP/neo nazis far right will weaken as these new workers have to associate with immigrants and as they grow smarter by dealing with life.

The only exception to this idea is the 'the phillips curve' where low unemployment leads to high wage inflation, so I'd still have the government pay some kind of unemployment benefit for people who are between jobs. If we engineer society to have a certain level of unemployment, its not fair for the unemployed to live in poverty, but there must be a strong incentive to get a job.

One final note; for those earning about 40K pa, your national insurance contributions for every extra pound earned is 1%. For those, below, its 11% or so (last time I checked). The people who are paying for the dole are not the rich.

Next lecture will be tommorrow morning at eleven. I expect all of you to have your homework done by then. :)

Monday, December 11, 2006 11:00AM Report Comment

2. Rimmer said...

Holding interst rates down - sure it is, but what about the long term costs and effects, guess the people responsible will be moved on and we will be left to clear up the mess, but at least in 2006 it help keep interest rated down - thats all that mattered !!!

Monday, December 11, 2006 11:39AM Report Comment

3. paul said...

What of the GDP per capita and average salary statistics?

They will almost certainly paint a picture of the UK shrinking into widespread poverty with plummeting average wages.

Monday, December 11, 2006 05:21PM Report Comment

4. Shanghaitim said...

Which calls into question using that as a definition of poverty.

Tuesday, December 12, 2006 04:12AM Report Comment

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