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Cost of living- what’s going to happen?

spanglechick said:
Apart from those who are very well paid, there’s always this huge divide though, between people paying market rates for housing (renters and recent buyers) and those paying for their homes at the price of housing in previous times.

That’s how we don’t have a critical mass of fury. That’s how people are still able to take foreign holidays and drive cars they can replace every few years. Home ownership through the 90s and 00s was attainable for lots of people and those people, many if them working class, actually aren’t struggling in the same way as the private tenant paying market rent. (Around here that’s £1200 /month for a 1 bed flat). People might be miffed at the increases in costs, and might have to cut back a bit, but there’s a huge chasm between the desperate and the safe, and an enormous proportion of the Uk are on the safe side because they have a manageable (or paid off) home. Those people won’t riot. They won’t revolt. Solidarity is lip service when your mortgage is only a few hundred a month.
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Almost nobody under 35 is in the 'reasonable housing costs' bracket though. And as I said elsewhere, this ongoing omni-clusterfuck is going to start fucking with the middle classes in a big way. That's a pretty novel development. It's not just costs, it's basic stuff not working. Healthcare, transport, care for the parents, schools for the kids.

I'm not expecting these people to riot but the removal of their tacit support for the status quo could have bigger consequences than a couple of burnt out buildings and a load of kids getting sent to jail for 20 years a pop.
 
Thread by an accountant/economist of why Starmer's plan to deal with the cost of living crisis and the rise in energy prices in particular is flawed:

 
teqniq said:
Thread by an accountant/economist of why Starmer's plan to deal with the cost of living crisis and the rise in energy prices in particular is flawed:

Click to expand...

No idea who that guy is but I don’t give him much credibility. He’s double-counting the cost, for a start. He’s saying it will cost £53bn and then he’s saying that compensation to the energy providers hasn’t been costed. But what does he think that £53bn is for? It’s the extra cost to be paid to the energy providers!
 
teqniq said:
Thread by an accountant/economist of why Starmer's plan to deal with the cost of living crisis and the rise in energy prices in particular is flawed:

Click to expand...

Murphy is a funny one. Can be quite left on some things and sometimes worth reading him, but can also have some oddball views. Here he's worrying about helping some rich people at the same time as everyone else, when in the past I'm sure I've seen him argue against means testing on the grounds that you can tax it back from the rich.
 
Edie said:
Shouldn’t you know given you posted it :D
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I'm kinda relying on the people who produced the graph knowing what it is or what it's based on. It would be good to know what FT article it came from because that would likely explain in more detail but my previous reply is my best guess.
 
Edie said:
Just that asking people is the most accurate predictor of recession. But I fundamentally do not understand economics so.
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It's not supposed to be a predictor of a recession, it's supposed to me a measure of how confident consumers are. Not sure how you can measure that without asking people questions about their confidence.

It was Richard Murphy who said the recession thing, he's just some random accountant that people follow on twitter for some inexplicable reason, probably because he says things that people like to agree with.

Details of the actual survey are here:

www.gfk.com

Consumer Confidence Barometer

GfK Consumer Confidence Barometer provides monthly tracking of UK consumers’ views of their finances and the economy now and for the next 12 months.
www.gfk.com www.gfk.com
 
platinumsage said:
It's not supposed to be a predictor of a recession, it's supposed to me a measure of how confident consumers are. Not sure how you can measure that without asking people questions about their confidence.

It was Richard Murphy who said the recession thing, he's just some random accountant that people follow on twitter for some inexplicable reason, probably because he says things that people like to agree with.

Details of the actual survey are here:

www.gfk.com

Consumer Confidence Barometer

GfK Consumer Confidence Barometer provides monthly tracking of UK consumers’ views of their finances and the economy now and for the next 12 months.
www.gfk.com www.gfk.com
Click to expand...
Yes, I was asking teqniq why he felt Richard Murphy’s comment was important. Not whether consumer confidence measured consumer confidence, although I didn’t know what that was.
 
Edie said:
Just that asking people is the most accurate predictor of recession. But I fundamentally do not understand economics so.
Click to expand...

It certainly shouldn't be and isn't the sole indicator, but economics are built on a large proportion of public perception - by how wealthy they and their peers feel they are, rather than how wealthy they actually are, objectively speaking. It was a big factor of the boom in the Reagan/Thatcher era - financial deregulation made access to money much easier to attain, with the result that a lot of people felt richer, started taking more risks, and there was more money slushing around in the consumer capitalism space as well as the business space. Everything went brilliantly until it didn't (which is the same as seen in almost every boom/bust cycle since the middle ages, just at a faster cadence these days).

Naturally, the converse of that is that enough people are fearful of the state of the economy, cash starts getting hoarded in to the proverbial mattress by people and banks alike, when they think their usual sources of revenue might dry up. The velocity of money drops, so even if the economy is actually OK there's still going to be less money going around to what you might call fripperies (restaurants, entertainment etc) so those industries take a financial hit regardless. When there actually is less money supply (as we have now with disrupted supply chains, more and more money being spent on essentials like rent, fuel and food) the effect is magnified.

I don't really regard economics as a science, I think of it more as applied sociology/anthropology so it only has to make as much sense as glorified mob mentality in my philosophy ;)
 
The problem with asking people about things like their confidence is that the thing you are asking them is not some objective internal metric that they can just read off. They construct their understanding in the moment, which means it’s highly contextual. Ask them the same question in a different way in a different context tomorrow and you’ll get a different set of answers. That’s not a problem if it’s just noise, but the manner the survey is conducted will be a big part of the influence on how the answers are constructed, which means it is systematically biased in unpredictable ways.

It still makes for good copy, mind
 
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