Thursday, January 3, 2008

This will probably be fully offset by the plunging price of Foot Spas from Argos!!!

Npower to increase energy prices

Npower is to increase both its gas and electricity prices, the UK's fourth largest energy supplier has confirmed. The company, which has four million customers, said it would provide exact details on Friday. Its move comes on the back of higher wholesale energy bills, lifted by crude oil hitting a record $100 a barrel in New York earlier this week. Analysts predict that other UK energy providers are now likely to announce price rises.

Posted by tyrellcorporation @ 10:15 PM (606 views)
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6 thoughts on “This will probably be fully offset by the plunging price of Foot Spas from Argos!!!

  • new user 2007 says:

    Refridgerators, freezers, washing machines etc i.e. white goods, have not moved much in nominal terms for many years. I have noticed that in the last year the same static has happened for quality level DVD recorders (not the £20 throwaway from supermarkets), mobile phones etc. These have stopped falling in price even as few new features have been added (quality improvements are the part we dim-witted mortals do not notice that the BoE does)….I am excluding the sales period.

    The new generation of DVD players, games machines etc are in fact more expensive. The only thing that was falling were digital TVs, but these also seem to be stabilising. Yet somehow these will. allegedly, offset all the food, utility bill, petrol, travel prices etc. Even as raw material prices have risen and firms can no longer contain costs (move to China or outsource) to maintain profits…there will be a temporary weakening of inflation in December as sales started early BUT Currys has already announced a sharp fall in profits. This is a no brainer…cutting prices in the main shopping month of course will hit profits. If no other alternative is available, does this mean store closures and job cuts to support profits?

    The main thing is that the BoE does not care about inflation anymore. It is using up its goodwill among consumers (part of the reason for low prices has also been low inflation expectations that then feed into wage demands etc…this is about to change). Lets see what happens as this goodwill is all gone in 2008. For wage growth to remain low in 2008 it implies a weak labour market (read as a shock to the housing market?).

    Meanwhile, VIs seem to see the best of both worlds…the economy is about to go under and so there will be a fall in interest rates BUT if the economy starts to suffer unemployment will not rise so house prices will be ok… there will be no economic shock.

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  • little professor says:

    Up 17% Yikes, that’s gotta hurt. Time to take it out of the CPI basket of goods.

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  • @ new user 2007: With lower IR the likely effect that Sterling will nosedive even more, the UK DIYSS and chainstores (who import a lot of goods) will have to either lift prices, lose margins or beat up suppliers – or all three. If people aren’t there to buy, there will be spring sales like you’ve never seen to clear stock. Lovely mess.

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  • new user 2007 – “BUT if the economy starts to suffer unemployment will not rise so house prices will be ok… there will be no economic shock.”

    I don’t get this?

    The economy is about to suffer and BoE interest rate cuts will make little or no difference as worldwide banks are still not lending to each other. The economy will suffer, unemployment will rise and this will affect house prices.

    The economic shock happened on August 9th 2007 and we still haven’t seen the real fall out from it yet.

    Either way, we’re all pretty screwed in the short term as everything’s getting much more expensive and our 2008 pay rises won’t counteract this.

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  • new user 2007 says:

    Have to read it with a bit of context and tone (sarcasm and ridicule) i.e. the best of both worlds argument the VIs are implying has a built in inconsistency…on the one hand they are saying that the economy will slow (as you say, in the REAL world this implies higher unemployment) SO the BoE will cut interest rates, BUT in THEIR world the slowing economy will not lead to a rise in unemployment (I am saying this is an odd logic).

    Regarding ridiculing of the BoE. We know that falling rates will weaken the £ and so result in imported inflation, even while world raw material and food prices are hitting record highs. The problem is that the BoE seems to have decided that inflation is not an issue and so can concentrate on house prices. My pet irritation of the BoE is that when house prices were rocketing and debt excessively cheap it said there was no inflationary effect from this (so never bothered raising rates)…

    BUT when house prices start falling and getting debt becomes harder it says there will be deflation and so justifies interest rate cuts. It is a one sided interest rate policy i.e. asset prices are more important than real inflation.

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  • Gertcha!

    … interesting aricles re: pay rises this morning

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