Things are worse than the headline… Core CPI actually went **UP** again.
Things are going to have to get rather ugly before they get better I fear.
Rates will be going up and up on this news.
In before Rishi’s pledge gets quietly dropped all of a sudden.
What is driving it now? We know energy prices have fallen a bit and we’re seeing softness in house prices, fuel and some supermarkets have committed to reducing prices.
I assume this is still a high figure because it is a year on year comparison?
When you have a regulated annual increase of services of 3.7% + inflation (10%) every April given to companies for no reason backed by OFCOM, OFWAT and OFGEM don’t expect inflation to go down, the regulators themselves have been captured by big business they don’t compete anymore.
– Inflation up; bad for us.
– BoE rates up > lending rates up; bad for us with mortgages and debt
– BoE rates up > investing rates up, but even less than expected; bad for us with anything left to gain interest on
I’m (and largely, we, are) continually worse off.
Core CPI up. Looks like inflation is becoming embedded. You can actually blame Brexit.
Now I’m convinced tomorrow will be a 50bp rise. And no way the peak is 6% lol
Can someone without Partisan tendencies explain how a change of government could change this?
At this point much more is needed than just the bank of England’s blunt tool of interest rate rises. The government have to be coming up with new ideas
Still on track for inflation to balance out later this year? That’s what we were told right?
But Rishi promised to bring it down, how can this be?
“Experts wrong again,” I’m utterly shocked. Unbelievable people get paid handsomely to just be wrong, every, single, time.
Media and Reddit focus on CPI but really important that PPI is now [meaningfully surprising to the downside](https://i.imgur.com/jmu3bmy.jpg). Producer price inflation is a lead indicator, CPI is a lagging indicator as input costs of materials, energy etc. are fed into pricing for goods with a lag.
The fact PPI (output/factory gate prices) is now +3% y/y vs +12% 3 months ago suggests some optimism for a CPIH of around 2.6% in August based on the historical regression (CPIH vs. PPI 3 months ago has a 92% r-squared). To not try and be too gloomy!
The fixed rate on my parents business mortgage just ended, I’m so worried about them.
They will get their new rate in the comming days and I have no idea where theor going to find the extra cash but I have a feeling I’m not going to see them very often and theor quality of life is going to crash as they have to work more.
This would decrease if they chanted how energy prices are calculated. Why this isn’t getting more traction makes me think both sides are as bad as each other.
‘Supply chain issues linked with COVID’
Such duplicitous crap. How about “Supply chain issues due to Brexit, exacerbated by COVID”?
I’m so sick of this doublespeak in the press.
Trying to sell. No mortgage, don’t have to move so OK. Prosperous town. House priced about ‘right. Lots of viewings but definite sense of cold feet I think. Problem is lots of inflation is supply side- we import too much of our food and we don’t make enough stuff inside the UK I think.
Getting rid of the Tories with higher taxes on the rich should sort out all of this. Once this happens, welfare spending will also be increased to reverse the evil Tory cuts.
It’s absolutely insane, I still see so many people out spending in high streets consistently wherever I go.
Genuine question: if the aim of raising rates is to bring down inflation, what is the benefit of doing it slowly, rather than just changing it to, say, 6% to begin with? Surely a quick, sharp shock would be more effective at reducing inflation?
Mofo’s here discussing 0.5 point rate hikes when companies are price gouging the fuck out of us. Record profits all around while they shrink the amounts and raise the prices.
SMH
Its a complete different world now to what it was back then. Interest rates high, house values low. Both high house values & high interest rates will stifle the economy.
Kinda hilarious that Rishi’s ridiculous grift of a pledge will come back to bite him
but apparently we shouldn’t rise interest rates any further
That’s because prices fall like a feather. It’s these greedy pigs that keeps rising prices despite commodities, transport falling (company i work for rising yet again despite this)
Serious question – can anyone explain a credible theory for how we get out of this? I see catch-22s around every option:
* Can’t leave interest rates low or inflation will cripple us, can’t raise them or homeowners will go bankrupt.
* Our deficit is ~5% of GDP, even on a great year our growth is ~2%. We can’t grow our way out of this.
* We’re already in deficit and the situation is worsening, and public services barely work. THe interest rates on our own debt are skyrocketing. Seems like we can’t borrow our way out of this either.
* We’re expecting a ~33% increase in the number of boomers drawing upon state pensions, NHS care and social care. Meanwhile the ratio of taxpayers to non-working people is expected to worsen, even if we allow high levels of immigration. So our tax receipts are gonna go down, and our bills are gonna go up. We won’t even be able to maintain the shit standard of medical and social care we have now.
* We’re a significant net importer, if our economy worsens then life gets more expensive in general, which worsens the economy again. That’s a positive feedback loop.
So genuinely, can anyone propose an economic model that would turn things around for us?
The only responses I ever get to this question are “cheer up” and “it’ll be ok, trust me”, but I’m looking for actual maths and economics, not blind optimism.
26 comments
Things are worse than the headline… Core CPI actually went **UP** again.
Things are going to have to get rather ugly before they get better I fear.
Rates will be going up and up on this news.
In before Rishi’s pledge gets quietly dropped all of a sudden.
What is driving it now? We know energy prices have fallen a bit and we’re seeing softness in house prices, fuel and some supermarkets have committed to reducing prices.
I assume this is still a high figure because it is a year on year comparison?
When you have a regulated annual increase of services of 3.7% + inflation (10%) every April given to companies for no reason backed by OFCOM, OFWAT and OFGEM don’t expect inflation to go down, the regulators themselves have been captured by big business they don’t compete anymore.
– Inflation up; bad for us.
– BoE rates up > lending rates up; bad for us with mortgages and debt
– BoE rates up > investing rates up, but even less than expected; bad for us with anything left to gain interest on
I’m (and largely, we, are) continually worse off.
Core CPI up. Looks like inflation is becoming embedded. You can actually blame Brexit.
Now I’m convinced tomorrow will be a 50bp rise. And no way the peak is 6% lol
Can someone without Partisan tendencies explain how a change of government could change this?
At this point much more is needed than just the bank of England’s blunt tool of interest rate rises. The government have to be coming up with new ideas
Still on track for inflation to balance out later this year? That’s what we were told right?
But Rishi promised to bring it down, how can this be?
“Experts wrong again,” I’m utterly shocked. Unbelievable people get paid handsomely to just be wrong, every, single, time.
Media and Reddit focus on CPI but really important that PPI is now [meaningfully surprising to the downside](https://i.imgur.com/jmu3bmy.jpg). Producer price inflation is a lead indicator, CPI is a lagging indicator as input costs of materials, energy etc. are fed into pricing for goods with a lag.
The fact PPI (output/factory gate prices) is now +3% y/y vs +12% 3 months ago suggests some optimism for a CPIH of around 2.6% in August based on the historical regression (CPIH vs. PPI 3 months ago has a 92% r-squared). To not try and be too gloomy!
[PPI evolution](https://i.imgur.com/cxx76M6.png)
The fixed rate on my parents business mortgage just ended, I’m so worried about them.
They will get their new rate in the comming days and I have no idea where theor going to find the extra cash but I have a feeling I’m not going to see them very often and theor quality of life is going to crash as they have to work more.
This would decrease if they chanted how energy prices are calculated. Why this isn’t getting more traction makes me think both sides are as bad as each other.
‘Supply chain issues linked with COVID’
Such duplicitous crap. How about “Supply chain issues due to Brexit, exacerbated by COVID”?
I’m so sick of this doublespeak in the press.
Trying to sell. No mortgage, don’t have to move so OK. Prosperous town. House priced about ‘right. Lots of viewings but definite sense of cold feet I think. Problem is lots of inflation is supply side- we import too much of our food and we don’t make enough stuff inside the UK I think.
Getting rid of the Tories with higher taxes on the rich should sort out all of this. Once this happens, welfare spending will also be increased to reverse the evil Tory cuts.
It’s absolutely insane, I still see so many people out spending in high streets consistently wherever I go.
Genuine question: if the aim of raising rates is to bring down inflation, what is the benefit of doing it slowly, rather than just changing it to, say, 6% to begin with? Surely a quick, sharp shock would be more effective at reducing inflation?
Mofo’s here discussing 0.5 point rate hikes when companies are price gouging the fuck out of us. Record profits all around while they shrink the amounts and raise the prices.
SMH
Its a complete different world now to what it was back then. Interest rates high, house values low. Both high house values & high interest rates will stifle the economy.
Kinda hilarious that Rishi’s ridiculous grift of a pledge will come back to bite him
but apparently we shouldn’t rise interest rates any further
That’s because prices fall like a feather. It’s these greedy pigs that keeps rising prices despite commodities, transport falling (company i work for rising yet again despite this)
Serious question – can anyone explain a credible theory for how we get out of this? I see catch-22s around every option:
* Can’t leave interest rates low or inflation will cripple us, can’t raise them or homeowners will go bankrupt.
* Our deficit is ~5% of GDP, even on a great year our growth is ~2%. We can’t grow our way out of this.
* We’re already in deficit and the situation is worsening, and public services barely work. THe interest rates on our own debt are skyrocketing. Seems like we can’t borrow our way out of this either.
* We’re expecting a ~33% increase in the number of boomers drawing upon state pensions, NHS care and social care. Meanwhile the ratio of taxpayers to non-working people is expected to worsen, even if we allow high levels of immigration. So our tax receipts are gonna go down, and our bills are gonna go up. We won’t even be able to maintain the shit standard of medical and social care we have now.
* We’re a significant net importer, if our economy worsens then life gets more expensive in general, which worsens the economy again. That’s a positive feedback loop.
So genuinely, can anyone propose an economic model that would turn things around for us?
The only responses I ever get to this question are “cheer up” and “it’ll be ok, trust me”, but I’m looking for actual maths and economics, not blind optimism.