Genie Posted June 22, 2023 Share Posted June 22, 2023 21 minutes ago, sidcow said: Excellent news, look forward to a big reduction in inflation next month as millions tighten their belts. That's what's happened after every other interest hike isn't it. We've seen a fall in inflation yes? We’re a few pricey barrels of oil away from seeing it going up again too. Petrol stations are itching to increase prices and they are sneaking up already. 1 Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 21 minutes ago, sidcow said: Excellent news, look forward to a big reduction in inflation next month as millions tighten their belts. That's what's happened after every other interest hike isn't it. We've seen a fall in inflation yes? It takes a lot longer for the interest rates to feed into the economy. It's not an instant reaction. Also the issue is that when inflation is double the interest rate then anyone saving money is still losing purchasing power by the difference between those rates. So why would anyone save and not spend. To have a real immediate impact interest rates should be higher, yes higher than inflation. So we should have interest rates of 8% or above. But that would cause far too much pain so they're trying to thread the eye of the needle and raise rates and hope inflation falls due to the dropping energy prices and they don't need to go further. It's not working so they need to go to 6% now and see if that works. Link to comment Share on other sites More sharing options...
Genie Posted June 22, 2023 Share Posted June 22, 2023 The government could also drop the 5% VAT on household energy bills. It would ease the cost of living and lower inflation. The 5% Boris pledged to remove once out of the EU. Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 9 minutes ago, Seat68 said: That seems to be incorrect, according to the table on this link UK is 18.3% and the EU is 15.04% https://tradingeconomics.com/country-list/food-inflation?continent=europe Mods, I cant quote as its a table. Quote UK food price inflation was among the highest across G7 economies in March 2023, second only to Germany; the high rate of annual food price inflation was in contrast with the recent decline in global food commodity prices, which likely reflected how there were lags before price shocks to filter through the supply chain. https://www.ons.gov.uk/economy/inflationandpriceindices/articles/foodandenergypriceinflationuk/2023 ONS said we're behind Germany. Anyway the point is everyone has high food price inflation. It's not down to Brexit as Germany is still at heart of EU Link to comment Share on other sites More sharing options...
sidcow Posted June 22, 2023 VT Supporter Share Posted June 22, 2023 8 minutes ago, Genie said: We’re a few pricey barrels of oil away from seeing it going up again too. Petrol stations are itching to increase prices and they are sneaking up already. Irrelevant. It's people frittering cash away willy nilly that's the problem. Not production and transport costs. 1 Link to comment Share on other sites More sharing options...
Genie Posted June 22, 2023 Share Posted June 22, 2023 4 minutes ago, CVByrne said: ONS said we're behind Germany. Anyway the point is everyone has high food price inflation. It's not down to Brexit as Germany is still at heart of EU If we joined the EU tomorrow I’m sure we’d be able to get cheaper food. Link to comment Share on other sites More sharing options...
bickster Posted June 22, 2023 Moderator Share Posted June 22, 2023 4 minutes ago, CVByrne said: ONS said we're behind Germany. Anyway the point is everyone has high food price inflation. It's not down to Brexit as Germany is still at heart of EU Nope Country Last Previous Reference Unit Turkey 52.5 53.92 May/23 % Hungary 34 39 May/23 % Serbia 23.2 23.1 May/23 % Slovakia 21.7 25.4 May/23 % Estonia 20.4 23.4 May/23 % Ukraine 20.1 22.2 May/23 % Poland 18.9 19.7 May/23 % Romania 18.73 19.84 May/23 % United Kingdom 18.3 19 May/23 % Lithuania 18.2 21.9 May/23 % Latvia 17.9 20.2 May/23 % Belgium 16.39 17.57 May/23 % Croatia 15.1 15.8 May/23 % European Union 15.04 16.41 May/23 % Slovenia 14.87 15.75 May/23 % Netherlands 14.8 15.6 May/23 % Macedonia 14.6 16.5 May/23 % Czech Republic 14.5 17.3 May/23 % Germany 14.5 16.8 May/23 % Bulgaria 14.38 15.85 May/23 % France 14.3 14.9 May/23 % Sweden 14.16 16.86 May/23 % Moldova 13.97 16.41 May/23 % Euro Area 13.7 15 May/23 % Faroe Islands 13.3 13.2 Mar/23 % Ireland 13.1 13.1 Apr/23 % Bosnia and Herzegovina 12.8 18.92 Apr/23 % Norway 12.68 10.55 May/23 % Austria 12.3 13.2 May/23 % Iceland 12.3 12.5 May/23 % Luxembourg 12.19 12.47 May/23 % Spain 12 12.94 May/23 % Italy 11.8 12.1 May/23 % Greece 11.61 11.39 May/23 % Finland 11.08 13.7 May/23 % Malta 10.9 11.4 May/23 % Montenegro 10.7 11.6 May/23 % Albania 10.6 10.1 May/23 % Denmark 10.6 13.1 May/23 % Portugal 9.42 15.41 May/23 % Kosovo 9.4 10.6 May/23 % Cyprus 8.38 6.71 May/23 % Switzerland 5.3 5.4 May/23 % Belarus 4.4 6.1 May/23 % Russia -1 -0.01 May/23 % Tradingeconomics.com 1 Link to comment Share on other sites More sharing options...
Genie Posted June 22, 2023 Share Posted June 22, 2023 20 minutes ago, bickster said: Nope Country Last Previous Reference Unit Turkey 52.5 53.92 May/23 % Hungary 34 39 May/23 % Serbia 23.2 23.1 May/23 % Slovakia 21.7 25.4 May/23 % Estonia 20.4 23.4 May/23 % Ukraine 20.1 22.2 May/23 % Poland 18.9 19.7 May/23 % Romania 18.73 19.84 May/23 % United Kingdom 18.3 19 May/23 % Lithuania 18.2 21.9 May/23 % Latvia 17.9 20.2 May/23 % Belgium 16.39 17.57 May/23 % Croatia 15.1 15.8 May/23 % European Union 15.04 16.41 May/23 % Slovenia 14.87 15.75 May/23 % Netherlands 14.8 15.6 May/23 % Macedonia 14.6 16.5 May/23 % Czech Republic 14.5 17.3 May/23 % Germany 14.5 16.8 May/23 % Bulgaria 14.38 15.85 May/23 % France 14.3 14.9 May/23 % Sweden 14.16 16.86 May/23 % Moldova 13.97 16.41 May/23 % Euro Area 13.7 15 May/23 % Faroe Islands 13.3 13.2 Mar/23 % Ireland 13.1 13.1 Apr/23 % Bosnia and Herzegovina 12.8 18.92 Apr/23 % Norway 12.68 10.55 May/23 % Austria 12.3 13.2 May/23 % Iceland 12.3 12.5 May/23 % Luxembourg 12.19 12.47 May/23 % Spain 12 12.94 May/23 % Italy 11.8 12.1 May/23 % Greece 11.61 11.39 May/23 % Finland 11.08 13.7 May/23 % Malta 10.9 11.4 May/23 % Montenegro 10.7 11.6 May/23 % Albania 10.6 10.1 May/23 % Denmark 10.6 13.1 May/23 % Portugal 9.42 15.41 May/23 % Kosovo 9.4 10.6 May/23 % Cyprus 8.38 6.71 May/23 % Switzerland 5.3 5.4 May/23 % Belarus 4.4 6.1 May/23 % Russia -1 -0.01 May/23 % Tradingeconomics.com LOL at the Russian numbers Just like their economy and currency data. 1 Link to comment Share on other sites More sharing options...
blandy Posted June 22, 2023 Moderator Share Posted June 22, 2023 1 hour ago, CVByrne said: Well that's not totally the case. There are 4 key factors at play in this 1) The supply chain shock due to covid 2) The mass printing of money for covid relief and stimulus. (20% of all money in existence was printed into existence in space of 18 months in 20/21) 3) Ukraine war impact to energy and food prices 4) Brexit impact What is driving a lot of inflation now is a lot of the demand side. Demand for airline flights, demand for restaurants and hotels, for recreation etc.. The supply of restaurants and hotels and airlines and recreation are not variable things they're relatively static in their supply. What's driving a lot of the cost is two things the demand for these items as too many people are not feeling much pain and are going on holiday, eating out etc.. The other side is cost for these. Wages have gone up and they immediately feed into the cost of the items and services. Energy prices have been falling which are no longer a factor in these prices. This is the issue at present, the core inflation which is demand side inflation and the tool available is take money out of the system by raising interest rates so the demand drops. When it drops enough and we have the essentially static supply the price rises will stop. It is the only effective tool available to do this. Raise interest rates. While wages and incomes have risen, it’s by less than inflation so overall people have less spending power. Fuel and energy cost more than 12 months ago so are still feeding in to inflation. Energy use to produce goods has led to fewer goods being produced. It costs more to import them via shipping etc. There’s the post Brexit bureaucracy adding costs, there’s labour shortages- all leading to supply side problems which will be worsened by higher interest rates. The BoE only has one tool. When you’ve only got a hammer every thing looks like a nail. 2 Link to comment Share on other sites More sharing options...
rjw63 Posted June 22, 2023 Share Posted June 22, 2023 1 hour ago, Genie said: We’re a few pricey barrels of oil away from seeing it going up again too. Petrol stations are itching to increase prices and they are sneaking up already. Yes. Tesco have put diesel up 1p after keeping it at 141.9 for about five weeks. Strangely they've left unleaded at the same as last few weeks, also 141.9. All a bunch of robbing words removed. Link to comment Share on other sites More sharing options...
bickster Posted June 22, 2023 Moderator Share Posted June 22, 2023 No change at my local unmanned petrol stations £1.33.9 (D) / £1.34.9 (U) not changed in a good number of weeks Link to comment Share on other sites More sharing options...
Genie Posted June 22, 2023 Share Posted June 22, 2023 3 minutes ago, rjw63 said: Yes. Tesco have put diesel up 1p after keeping it at 141.9 for about five weeks. Strangely they've left unleaded at the same as last few weeks, also 141.9. All a bunch of robbing words removed. When the government were talking about an enquiry into supermarket fuel prices they suddenly dropped near me. They cut the margin between petrol and diesel to 4 or 5 pence. Now they are opening it up again. Link to comment Share on other sites More sharing options...
Mozzavfc Posted June 22, 2023 Share Posted June 22, 2023 20 hours ago, ender4 said: Really? Mine was a 2 year fixed so I was paying 3p gas and 18p electricity. Now they are offering 8p gas and 29p electricity. Basically the price cap. Yeah they're bringing you in line with market, as you fixed in those glorious pre-russian war prices. I fixed last year at 9p gas and 26p electric and now it's 8p gas and 29p electric with OVO Link to comment Share on other sites More sharing options...
Mozzavfc Posted June 22, 2023 Share Posted June 22, 2023 Until energy prices come down I can't see any way for inflation to lower. Everything costs so much more the create now. We should be windfall taxing energy generators, and redistributing it back to people. We have another winter of people not being able to pay their electricity and heating up ahead Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 (edited) 2 hours ago, bickster said: Nope Country Last Previous Reference Unit Turkey 52.5 53.92 May/23 % Hungary 34 39 May/23 % Serbia 23.2 23.1 May/23 % Slovakia 21.7 25.4 May/23 % Estonia 20.4 23.4 May/23 % Ukraine 20.1 22.2 May/23 % Poland 18.9 19.7 May/23 % Romania 18.73 19.84 May/23 % United Kingdom 18.3 19 May/23 % Lithuania 18.2 21.9 May/23 % Latvia 17.9 20.2 May/23 % Belgium 16.39 17.57 May/23 % Croatia 15.1 15.8 May/23 % European Union 15.04 16.41 May/23 % Slovenia 14.87 15.75 May/23 % Netherlands 14.8 15.6 May/23 % Macedonia 14.6 16.5 May/23 % Czech Republic 14.5 17.3 May/23 % Germany 14.5 16.8 May/23 % Bulgaria 14.38 15.85 May/23 % France 14.3 14.9 May/23 % Sweden 14.16 16.86 May/23 % Moldova 13.97 16.41 May/23 % Euro Area 13.7 15 May/23 % Faroe Islands 13.3 13.2 Mar/23 % Ireland 13.1 13.1 Apr/23 % Bosnia and Herzegovina 12.8 18.92 Apr/23 % Norway 12.68 10.55 May/23 % Austria 12.3 13.2 May/23 % Iceland 12.3 12.5 May/23 % Luxembourg 12.19 12.47 May/23 % Spain 12 12.94 May/23 % Italy 11.8 12.1 May/23 % Greece 11.61 11.39 May/23 % Finland 11.08 13.7 May/23 % Malta 10.9 11.4 May/23 % Montenegro 10.7 11.6 May/23 % Albania 10.6 10.1 May/23 % Denmark 10.6 13.1 May/23 % Portugal 9.42 15.41 May/23 % Kosovo 9.4 10.6 May/23 % Cyprus 8.38 6.71 May/23 % Switzerland 5.3 5.4 May/23 % Belarus 4.4 6.1 May/23 % Russia -1 -0.01 May/23 % Tradingeconomics.com You cited that I cited ONS. What the data shows is we're pretty much in the same thick of it as other countries in terms of food price inflation. It's clear it's not down to Brexit otherwise we'd have significantly higher the rates of inflation than other countries, not very marginal differences. If you wanted to put the 18% Vs 15% as the 3% is down to Brexit that's fine. The Office for National Statistics said UK is 2nd to Germany in the G7 for food price inflation. Edited June 22, 2023 by CVByrne Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 1 hour ago, blandy said: While wages and incomes have risen, it’s by less than inflation so overall people have less spending power. Yes but by less than a % so people have less than a % less spending power than they did a year ago in real terms at a national level Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 2 hours ago, blandy said: While wages and incomes have risen, it’s by less than inflation so overall people have less spending power. Fuel and energy cost more than 12 months ago so are still feeding in to inflation. Energy use to produce goods has led to fewer goods being produced. It costs more to import them via shipping etc. There’s the post Brexit bureaucracy adding costs, there’s labour shortages- all leading to supply side problems which will be worsened by higher interest rates. The BoE only has one tool. When you’ve only got a hammer every thing looks like a nail. So are you trying to make a case that interest rate rises are contributing to inflation? I agree energy prices are a driver across inflation as energy is an input into all production. It has different levels of impact in different industries. Labour shortages as I pointed out in my post are a key driver of inflation as it is a driver for higher costs on companies who pass those costs on to customers Brexit has been a key driver of labour shortages for sure. the BoE indeed only has one tool to solve core inflation. It has really no tools to impact Food and Energy prices however. Inflation is an incredibly difficult thing to solve once it has taken hold as inflation expectations feed on itself. Everyone can demand an inflation level wage increase and companies are giving pretty much close to it because they can just pass on the cost. If they can't pass on the cost because the demand has declined we'll reach an end to it. Link to comment Share on other sites More sharing options...
CVByrne Posted June 22, 2023 Share Posted June 22, 2023 2 hours ago, Mozzavfc said: Until energy prices come down I can't see any way for inflation to lower. Everything costs so much more the create now. We should be windfall taxing energy generators, and redistributing it back to people. We have another winter of people not being able to pay their electricity and heating up ahead Energy prices are coming down. My energy prices came down last month and I'm with E.On Oil prices have been dropping for a long time. Peaked half a year ago I think. Lower energy prices have been offset by higher prices elsewhere in the inflation however Link to comment Share on other sites More sharing options...
blandy Posted June 22, 2023 Moderator Share Posted June 22, 2023 34 minutes ago, CVByrne said: So are you trying to make a case that interest rate rises are contributing to inflation? Yep. Mortgage costs are in the basket, as are rental costs and loan / debt repayments are another issue pushing up goods prices. agree with much of the rest, but wages are nowhere near keeping up with inflation. Private sector is around 6.5% and public sector less than that. Disposable income is falling for most people. 1 Link to comment Share on other sites More sharing options...
sidcow Posted June 22, 2023 VT Supporter Share Posted June 22, 2023 46 minutes ago, CVByrne said: Labour shortages as I pointed out in my post are a key driver of inflation as it is a driver for higher costs on companies who pass those costs on to customers Brexit has been a key driver of labour shortages for sure. A message for all you brexiteers out there. Suck up your higher mortgage and rent costs. Link to comment Share on other sites More sharing options...
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