Cost of living squeeze in 2022
Discussion
Interesting article in the Telegraph today about Monetarism and how it predicted what we are seeing now.
Free republished version here;
https://b2bchief.com/the-monetarists-were-right-ab...
Throttlebody said:
Or start building tanks.
The UK has got used to historically continuous low base rates. Memories are short.
A potential transition to a more normalised and not unrealistic base rate of 4-5% would shock many. Even a forecast peak at circa 3% will be significant.
Memories aren't short, it's just you couldn't get on the housing ladder without taking the risk.The UK has got used to historically continuous low base rates. Memories are short.
A potential transition to a more normalised and not unrealistic base rate of 4-5% would shock many. Even a forecast peak at circa 3% will be significant.
As I mentioned above, 3% is basically the equivalent of the 17% in the past people complain about, as it means you have to have interest payments of 3x more than you did before (on a much higher total, due to low interest rates pushing prices up so much).
Saweep said:
anonymous said:
[redacted]
I think this is happening to me. Was only thinking this morning that we seem to be throwing away minimal stuff at the moment and shopping bills are marginally lower.
I guess all the constant hammering of the press about this makes you think a little more.
Luckily I have few financial worries, but it somehow seems wrong to just waste money when others are struggling. Focuses the mind a little.
En masse though, it really doesn't help the economy.
Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
oyster said:
tannhauser said:
Saweep said:
I think this is happening to me.
Was only thinking this morning that we seem to be throwing away minimal stuff at the moment and shopping bills are marginally lower.
I guess all the constant hammering of the press about this makes you think a little more.
Luckily I have few financial worries, but it somehow seems wrong to just waste money when others are struggling. Focuses the mind a little.
En masse though, it really doesn't help the economy.
fWas only thinking this morning that we seem to be throwing away minimal stuff at the moment and shopping bills are marginally lower.
I guess all the constant hammering of the press about this makes you think a little more.
Luckily I have few financial worries, but it somehow seems wrong to just waste money when others are struggling. Focuses the mind a little.
En masse though, it really doesn't help the economy.
k the economy. Excessive spending of money we collectively don’t have, is exactly why we’re in this mess.Are you not concerned about your job security and your own livelihood if the economy tanks?
Anyway, the economy needs a major reset. Perhaps then manufacturing and a more self-sufficient energy and power production may become viable once more. People will need to accept lower salaries however. As a country, we are not as affluent as we like to think.
Mr Whippy said:
But if the economy only survives as it is by waste and excess, then perhaps the pain we’re due to suffer is a much needed recalibration.
Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
Exactly my sentiments. I was going to "bold" sections of it, but I wholeheartedly agree with all of it. Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
Sway said:
Mr Whippy said:
No design? How do you correlate tens of thousands of people thinking about policy to do with Covid and Ukraine/Russia with no design?
Are they all just rolling dice?
Taxes have increased measurably. 20% VAT on fuel. 20% of the increase in fuel price is a huge amount alone. VAT on home energy prices. That's a huge amount.
Are you living in some alternate reality?
So what do you think is causing the inflation we see in the various sectors it's effecting?
No, I don't think those 'tens of thousands of people', all around the globe and with wildly differing ideologies and economic philosophies, are deliberately designing their individual responses to create massive global inflation.Are they all just rolling dice?
Taxes have increased measurably. 20% VAT on fuel. 20% of the increase in fuel price is a huge amount alone. VAT on home energy prices. That's a huge amount.
Are you living in some alternate reality?
So what do you think is causing the inflation we see in the various sectors it's effecting?
I've already said. Massive supply side shocks caused by multiple factors, combined with large scale spikes in demand that had previously been suppressed and so is hitting in a huge surge that even with normal capacities wouldn't be achievable. Combined with a fairly major war impacting some critical global supplies (exacerbating the supply side shocks).
I'm certainly not living in your world of global planning/co-ordination.
Covid created all these shocks.
Then ‘the war’ compounded then only because of the sanctions… we’ve had constant wars for decades without rampant inflation… the sanctions are what are causing the shocks. Sanctions which are created by policy makers.
China lockdowns. Policy makers.
USA stimulus. Policy makers.
Global central banking, policy makers.
Natural market forces would have managed all this as usual.
Random policy moves have exacerbated inflation.
Throwing money into supply shocks, and then taking money away into supply shocks, it’s like a huge whiplash manoeuvre.
Anyhow it’ll be deflation in 12 months.
Then everyone will be b
hing about no jobs.Thankyou4calling said:
There was a very large rise in UK retail sales in April.
None of the “Experts” forecast or expected it.
Maybe the press is making too much of this and people are just getting on with life.
Year on year (April 21 vs 22) it’s a steep decline. Good news short term, bad long term picture.None of the “Experts” forecast or expected it.
Maybe the press is making too much of this and people are just getting on with life.
Mr Whippy said:
But if the economy only survives as it is by waste and excess, then perhaps the pain we’re due to suffer is a much needed recalibration.
Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane. You do know how the stock markets actually function? There isn't a circuit breaker that operates, unless you are in a firesale - and even then the theory of that is untested.Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
The problem is, regardless we cannot deviate too much from a shallow growth trajectory; a small down swing disproportionately affects the poorest or least advantaged in society. But dropping the ceiling, rather than upping the floor is a path of complete f
king conkers.As for the bargain isle.....
stongle said:
Mr Whippy said:
But if the economy only survives as it is by waste and excess, then perhaps the pain we’re due to suffer is a much needed recalibration.
Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane. You do know how the stock markets actually function? There isn't a circuit breaker that operates, unless you are in a firesale - and even then the theory of that is untested.Sadly it won’t mean a newer better way of life, just the same levels of working misery for many but for even less in return.
The biggest issue in all this is still the working and family unit.
Expensive houses and two people working hasn’t been a positive thing.
Maybe if house prices crash enough and people get used to a cut back consumerist attitude, and less jobs out there, people might move back to that way of living.
The problem is, regardless we cannot deviate too much from a shallow growth trajectory; a small down swing disproportionately affects the poorest or least advantaged in society. But dropping the ceiling, rather than upping the floor is a path of complete f
king conkers.As for the bargain isle.....
This idea of everyone being a winner forever, and doing better than the last generation, and growing the economy forever, in a finite world, is a path of complete funking conkers too.
I agree it might be possible in an idealistic utopian world where we have leaders that are worth a toss, and plebs who care and have brains.
How the f
k, after 70 years of nuclear tech, don’t we have energy abundance and independence yet?Greedy mother f
kers and self interest, amd cretins saying “ooohhh if you crash energy prices then pensions, ooohhh pensioners won’t have money” ohhhh boo fking hooo…What do we want?
A utopia and a hard journey to it?
Or a neo-socialist hard 70s style Soviet Union across the entire world forever?
Mr Whippy said:
Well maybe pensioners can take a hit on quality of life too?
This idea of everyone being a winner forever, and doing better than the last generation, and growing the economy forever, in a finite world, is a path of complete funking conkers too.
Correct me if I'm wrong, didn't you work in pensions?This idea of everyone being a winner forever, and doing better than the last generation, and growing the economy forever, in a finite world, is a path of complete funking conkers too.
Sure, those with a million or so in a fund, and 4 or 5% drawdown can eat some s
t. But what's the UK average? 50k, max? They can't. They are dependent on state pension, the buttons the pot pays and probably working too..... you are now advocating They should get on their bike or join only fans because no one wins forever? stongle said:
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate.
Is that necessarily true? You could for example withdraw Help to Buy and implement a substantial annual property value tax, which would at a minimum discourage house price growth.xeny said:
Is that necessarily true? You could for example withdraw Help to Buy and implement a substantial annual property value tax, which would at a minimum discourage house price growth.
Property value tax won't work. Although I understand why anyone outside the SE thinks its a great idea.As for help to buy, are BTL eligible for this? Thought that was part of the ire.......
stongle said:
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane.
So what? You’re insane.anonymous said:
[redacted]
There is no ceiling on growth, that genuinely improves living standards, as long as technological progress continues. The fact we have seen little such growth over the past couple of decades, for the average worker in particular, is mainly due to policy mistakes and priorities. It does however remain possible.
tannhauser said:
stongle said:
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane.
So what? You’re insane.You must understand that nonsense you are saying? You cannot delink the general economy from house prices, well, not easily anyway.
stongle said:
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane. You do know how the stock markets actually function? There isn't a circuit breaker that operates, unless you are in a firesale - and even then the theory of that is untested.
The problem is, regardless we cannot deviate too much from a shallow growth trajectory; a small down swing disproportionately affects the poorest or least advantaged in society. But dropping the ceiling, rather than upping the floor is a path of complete fking conkers.
As for the bargain isle.....
Indeed.The problem is, regardless we cannot deviate too much from a shallow growth trajectory; a small down swing disproportionately affects the poorest or least advantaged in society. But dropping the ceiling, rather than upping the floor is a path of complete f
king conkers.As for the bargain isle.....
I'm not in the financial industry but I'm not aware of too many times when housing prices have crashed and ONLY housing prices.
Look at what most pension funds hold and there's typically a lot of property and other risk assets that will all tend to correlate when "something bad" happens to the housing market.
So that's peoples house their pension and probably any other investments they're lucky enough to have.
It's f
king odd seeing people actively wishing for this.pghstochaj said:
tannhauser said:
stongle said:
Except you can't crash house prices in isolation, everything comes down with it. The mechanism's to reverse house price growth works on all asset classes - it doesn't discriminate. You are advocating NOT only the destruction of house price values; but pensions fund too. Christ, some of you lot are completely insane.
So what? You’re insane.You must understand that nonsense you are saying? You cannot delink the general economy from house prices, well, not easily anyway.
JagLover said:
There is no ceiling on growth, that genuinely improves living standards, as long as technological progress continues.
The fact we have seen little such growth over the past couple of decades, for the average worker in particular, is mainly due to policy mistakes and priorities. It does however remain possible.
The fact we have seen little such growth over the past couple of decades, for the average worker in particular, is mainly due to policy mistakes and priorities. It does however remain possible.
what complete bullst!I think we’ve plateaued with technological progress somewhat. And there’s been a constant drive for lower costs. We can only go so far. We’ve ran out of ideas, and resources are finite.
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