Inflation Up (again)

Pak_Doo_Ik

Pak_Doo_Ik

Well-known member
These interest rate rises are really doing their job in stopping the continual rise in inflation. I don’t work in finance and do not have any sort of degree in economics, but I think my prediction of inflation topping 10% this year will be closer than the experts that are the BoE’s prediction of 8.5%. Remember household fuel increases have yet to take effect and the cost of the Russian invasion is also yet to be fully understood.

So expect even more hikes in interest rates as we hear the same old guff about it being done to control inflation!!!
 
Pak_Doo_Ik said:
These interest rate rises are really doing their job in stopping the continual rise in inflation. I don’t work in finance and do not have any sort of degree in economics, but I think my prediction of inflation topping 10% this year will be closer than the experts that are the BoE’s prediction of 8.5%. Remember household fuel increases have yet to take effect and the cost of the Russian invasion is also yet to be fully understood.

So expect even more hikes in interest rates as we hear the same old guff about it being done to control inflation!!!
Click to expand...

Yep, ridiculous isnt it? It doesnt matter what the rate of interest is, it wont curb inflation when its the cost of essentials caused by global inuflences that are causing it to skyrocket.
 
Pak_Doo_Ik said:
These interest rate rises are really doing their job in stopping the continual rise in inflation. I don’t work in finance and do not have any sort of degree in economics, but I think my prediction of inflation topping 10% this year will be closer than the experts that are the BoE’s prediction of 8.5%. Remember household fuel increases have yet to take effect and the cost of the Russian invasion is also yet to be fully understood.

So expect even more hikes in interest rates as we hear the same old guff about it being done to control inflation!!!
Click to expand...
Yup, energy price cap up in April, and then in October too.

Gonna be some people really struggling come winter. Going to be a lot of people in energy poverty, and having far less disposable income, so can see Christmas 22 being a bad one for spending in shops, pubs, restaurants etc.

I think they're keeping interest rates low, so people keep spending, rather than hoarding. People who are skint don't have any savings to a rate rise won't help that, but a rate rise will hurt them with their mortgages (or their landlords mortgages if renting).
 
BiggEggo said:
Going well isn't it. We would be goosed without our Brexit dividend!!
Click to expand...
I don't think you can blame all this one on Brexit although it certainly hasn't helped. The French had strikes last week due to cost of living rises and their wages not matching it.

www.france24.com

Business - French unions lead protests, strikes over cost of living

Thousands of French workers have protested across the country, calling for better wages to deal with the rising cost of living. Households' purchasing power is set to be a major issue in the upcoming…
www.france24.com www.france24.com
 
It's ok folks, Rishi Sunak will "understand" people's struggles with cost of living.

While similarly understanding that Covid fraudsters are just too hard to catch and raising tax now is an absolute necessity.
 
I'm not a pensioner but if I was I wouldn't be relying on the triple-lock being in place this Autumn (for the 2nd year running).
 
Priv said:
Yep, ridiculous isnt it? It doesnt matter what the rate of interest is, it wont curb inflation when its the cost of essentials caused by global inuflences that are causing it to skyrocket.
Click to expand...

The rises have been relatively modest thus far and aren’t designed to reverse the effects of inflation. They’re supposed to help defend the value of sterling and, therefore, mitigate against inflation becoming even higher due to imports being even more expensive.

When investors buy sterling they are actually buying government bonds that have a yield linked to the BoE base rate. When inflation is high, those bonds become less attractive as their value is eroded by inflation. Increasing the interest rate (yield) increase their attractiveness to the market and therefore defends the value of sterling.

Many of our key raw materials are imported. If the value of sterling falls they become more expensive to buy in GBP.

The most obvious/important one is crude oil which is priced in US Dollars. Whilst you’re right that the level of the interest rate isn’t going to change the situation in Ukraine, the price of oil in this country would be even higher if the value of sterling fell significantly in relation to the value of USD.

That would eventually make its way into the cost of goods and services, creating an inflationary spiral.
 
This is ultimately what happens after several heists by this Tory government.

A decade of austerity built on a deeply flawed economic approach designed only to take wealth from the people into the hands of the top 0.1%

Brexit - another heist during the race to the bottom. A route to deregulate and remove rights to once again take money out of the pocket of voters and into the top 0.1%. That’s the only Brexit dividend there was ever going to be.

And then, finally, the gift of a pandemic in which public funds were fraudulently and corruptly used to steal from the people so that the rich could get even richer.

This is where we are at now. It’s always been coming: fewer rights, low regulation, high tax, high poverty, insular and parochial Britain.

Worrying times.
 
Billy Horner said:
The rises have been relatively modest thus far and aren’t designed to reverse the effects of inflation. They’re supposed to help defend the value of sterling and, therefore, mitigate against inflation becoming even higher due to imports being even more expensive.

When investors buy sterling they are actually buying government bonds that have a yield linked to the BoE base rate. When inflation is high, those bonds become less attractive as their value is eroded by inflation. Increasing the interest rate (yield) increase their attractiveness to the market and therefore defends the value of sterling.

Many of our key raw materials are imported. If the value of sterling falls they become more expensive to buy in GBP.

The most obvious/important one is crude oil which is priced in US Dollars. Whilst you’re right that the level of the interest rate isn’t going to change the situation in Ukraine, the price of oil in this country would be even higher if the value of sterling fell significantly in relation to the value of USD.

That would eventually make its way into the cost of goods and services, creating an inflationary spiral.
Click to expand...
I put a one liner explaining that on another thread, you put it much better than I could ha
 
Poor (Rich)ie..his little head must be spinning ,what with trying to get a grip on people starving and freezing to death and then having to deal with getting permission to build a swimming pool, tennis courts and gym at his mansion near Northallerton.
Just the type of background a chancellor needs to understand people living on the breadline
 
Billy Horner said:
The rises have been relatively modest thus far and aren’t designed to reverse the effects of inflation. They’re supposed to help defend the value of sterling and, therefore, mitigate against inflation becoming even higher due to imports being even more expensive.

When investors buy sterling they are actually buying government bonds that have a yield linked to the BoE base rate. When inflation is high, those bonds become less attractive as their value is eroded by inflation. Increasing the interest rate (yield) increase their attractiveness to the market and therefore defends the value of sterling.

Many of our key raw materials are imported. If the value of sterling falls they become more expensive to buy in GBP.

The most obvious/important one is crude oil which is priced in US Dollars. Whilst you’re right that the level of the interest rate isn’t going to change the situation in Ukraine, the price of oil in this country would be even higher if the value of sterling fell significantly in relation to the value of USD.

That would eventually make its way into the cost of goods and services, creating an inflationary spiral.
Click to expand...

That makes alot more sense, i didnt realise that (y)
 
If you quantitative ease on numerous occasions to the tune of hundreds of billions then your currency naturally devalues and with that comes inflation.
 
Pak_Doo_Ik said:
These interest rate rises are really doing their job in stopping the continual rise in inflation. I don’t work in finance and do not have any sort of degree in economics, but I think my prediction of inflation topping 10% this year will be closer than the experts that are the BoE’s prediction of 8.5%. Remember household fuel increases have yet to take effect and the cost of the Russian invasion is also yet to be fully understood.

So expect even more hikes in interest rates as we hear the same old guff about it being done to control inflation!!!
Click to expand...
So I’m a former bin man who spent 5 years as a shelf stacker, yet I could predict the rise in inflation much better than the governor of the Bank of England.
 
You must log in or register to reply here.
Back
Top