I heard it on the Today programme. He’s saying that bringing inflation down is a “moral duty@.
How is raising interest rates supposed to help with the kind of inflation we are having now?
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gosub
~#
When this kicked off last year the bears were saying you need intrest rates above inflation....which makes sense when you think about it....if you are lucky to to have cash. ..if you leave it in the bank @2% when inflation is 10% you are burning money. Better off spending it on stuff that will hold value inline with inflationary rises. Though as rates rise and those who bought whatever with borrowed money get burned by it. Prices dip from the firesales.
Nice to see mainstream media waking up to notion recessing economy IS the idea when taking inflation. Though now sceptical of Sunaks promising to halve inflation by end of year...which is a no brainer in reality. Around about November the massive hikes in energy become last years inflation and fall out of the numbers
Nice to see mainstream media waking up to notion recessing economy IS the idea when taking inflation. Though now sceptical of Sunaks promising to halve inflation by end of year...which is a no brainer in reality. Around about November the massive hikes in energy become last years inflation and fall out of the numbers
ska invita
back on the other side
Its not the medias own conclusion, its literally what the Tories and BofE are saying they want to happen!
ska invita
back on the other side
mind blown by this...people who believe that you shouldnt meddle in the market and that the market is always right have decided to break that principle on this occassion so as to deliberately immiserate the public by getting them to give more of their money to bankers, as a way to hopefully reduce prices overall via the mechanism that soon people will be even more unable to buy any luxuries such as food, so retailers will have to try and drop their prices a bit if they want to sell anything? Fuck me...imagine the meetings when they talked this through
gosub
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Cos they are doing Phillip's curve and been for the past year (BofE anyway) whilst the Beeb during that year were earnestly reporting how raising interest rates might slow the economy. I don't think I heard anyone on the beeb that got that tilafter they interviewed Lord Lamont (in Number11 last inflationary headache)
Smokeandsteam
Working Class First
Until 1979 inflation wasn’t even the key metric used to measure economic performance or to direct economic policy. Now, in 2023, inflation control (rather than the economic factors that cause inflation) not only dictates what passes for the government, Treasury and BoE economic plan but it’s has now acquired a liminal spiritual property.
All of this is, incredibly, reported by the media in serious tones.
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Smokeandsteam
Working Class First
It shouldn’t be. Remember Norman Lamont boldly making clear that unemployment and recession were a price well worth paying to bring inflation down? For younger readers:
Bloomberg – 1990s Lesson: Recession is the Price of Curbing UK Inflation - CEBR
“Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying.” It was May 16, 1991 when Norman Lamont, then finance minister in John Major’s Conservative government, uttered his infamous words as the consumer prices...
cebr.com
gosub
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I think it is a moral duty There's moral hazard on borrowing money AND debt write offs. Fixed income is fixed income and there the ones most screwed by inflation coz they can't do anything about it.
House prices are ridiculous and thats where trickle down economics ended up...Their base will never forgive them but they've got to break it.
The whole thing is rotten anyway, there was a mortgage broker on news at ten last night saying he'd been 'helping' people by tweaking mortgages so that had payments due til the age of 80...that ain't helping that's painting yourself into a corner of being destitue in your declining years. Yet this fucker gets to paint himself as a good guy on national telly and pick up a commision
House prices are ridiculous and thats where trickle down economics ended up...Their base will never forgive them but they've got to break it.
The whole thing is rotten anyway, there was a mortgage broker on news at ten last night saying he'd been 'helping' people by tweaking mortgages so that had payments due til the age of 80...that ain't helping that's painting yourself into a corner of being destitue in your declining years. Yet this fucker gets to paint himself as a good guy on national telly and pick up a commision
ska invita
back on the other side
I am a younger reader
It’s the same mindset as working out how many dead makes it worth calling a lockdown, doing a product recall etc
Smokeandsteam
Working Class First
I am a younger reader
Ah, fair enough. Anyway, the point stands: the Tories have been here before.
Recession, immiseration, fear, repossessions and forcing people to go without food are all acceptable measures in the fight against rising inflation (which is caused by the rich engaged in price gouging and by rising supply side costs).
The big news today is that they have felt bold enough to spell it all out again for those who’ve lost their memory of the last time they did it.
Cat Fan
Cats and stats
It's worth questioning who are the winners and losers from persistent inflation.
Winners: people in paid employment or in receipt of inflation linked income (e.g. state pension, UC, rental income). People with significant debts.
Losers: people with lots of wealth and savings. People receiving fixed income (e.g. some occupational pensions)
So why is the govt. so desperate to bring inflation down to 2%?
A bit of inflation might actually be healthy for the economy since many UK households (and the government) are so deeply in debt. Inflation is debt eroding.
Winners: people in paid employment or in receipt of inflation linked income (e.g. state pension, UC, rental income). People with significant debts.
Losers: people with lots of wealth and savings. People receiving fixed income (e.g. some occupational pensions)
So why is the govt. so desperate to bring inflation down to 2%?
A bit of inflation might actually be healthy for the economy since many UK households (and the government) are so deeply in debt. Inflation is debt eroding.
gosub
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Short hand. Look at hospitality employment or even more so the likes of deliveroo..whilst there's viable business in servicing thems that can't actually be arsed to pick up there own McDonalds probably too much disposable income about
ska invita
back on the other side
this is a good point and i heard economists on the left saying at the start of the pandemic that the state should spend big (furlough + healthcare) and let inflation reduce the bill
Bollocks. There are millions using food banks, including a large contingent of public sector workers whose pay has lagged 60% behind inflation since 2010.
What’s your next point, lattes, Netflix and avocado toast mean millennials can’t buy a house?
brogdale
Coming to terms with late onset Anarchism
So you've not moved on from the austerity-justifying narrative of the poor having booze/fags/smartphones/flat-screen-TVs ?
FFS
brogdale
Coming to terms with late onset Anarchism
This is exactly it.
And when your asset-managed holdings make returns all around the globe, why would these monsters worry about economic pain in one polity?
brogdale
Coming to terms with late onset Anarchism
and there being no effective social care anymore.
gosub
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My next point is to point out I am aware of the fact people are suffering even pointed out how tone deaf Truss budget was , but it's fuck all to do with me I ain't in the MPC...Thems that are though...ARE looking for signs of diminished non essential spending and thats the mother fucking tell tail.
Millennials can't buy houses coz they propped up the markets post 2008
ska invita
back on the other side
What this is all about
Also presumes everyone has had a big pay increase!
Also presumes everyone has had a big pay increase!
smmudge
i know the smudge is true
It shouldn’t be. Remember Norman Lamont boldly making clear that unemployment and recession were a price well worth paying to bring inflation down? For younger readers:
Bloomberg – 1990s Lesson: Recession is the Price of Curbing UK Inflation - CEBR
“Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying.” It was May 16, 1991 when Norman Lamont, then finance minister in John Major’s Conservative government, uttered his infamous words as the consumer prices...
Someone at work was explaining (to clients) that a recession was a good thing to raise unemployment and help businesses "flush out the dead wood".
And I thought.....yeah that's you you fucking prick.
Anyway my favourite line from politician this week, can't remember who said it but that it was imperative to bring inflation down so that costs of goods/services will come down.
gosub
~#
Reminds me of an arsehole used to work with, who went to Shell to be Chief Pilot. Put in 2 reports first called for savings by not going to airshow jollys..turned out he was the only one who did go to them...they listened to him and cut that perk. Next report which was in writing and to the CEO recommended a practice involving fuel which is illegal , they fired him.Someone at work was explaining (to clients) that a recession was a good thing to raise unemployment and help businesses "flush out the dead wood".
And I thought.....yeah that's you you fucking prick.
Anyway my favourite line from politician this week, can't remember who said it but that it was imperative to bring inflation down so that costs of goods/services will come down.
Ming
I shot a man in Reno...
agricola
a genuine importer of owls
I doubt that very much - maybe for the supermarket deliveries, but the rest is the delivery of overpriced meals.
All it does is provide a service for those who can afford it, and I think we would be in a better (and safer, given all the electric bike batteries on charge) place if the thousands of people who currently do those deliveries instead were made available to take the many vacancies that exist in areas of greater social need.
SpookyFrank
A cheap source of teeth for aquarium gravel
How many grey-suited ghouls has the bank of England got on six figure salaries and all they can come up with is a way of making everything worse. Over and over again.
It's like if instead of firefighters you have a bloke rolls up in an Audi Q8, looks at the fire for a bit, scratches his arse thoughtfully and then tips a gallon of petrol onto it. And then he goes on the news and says people expecting not to be on fire is the real problem here.
It's like if instead of firefighters you have a bloke rolls up in an Audi Q8, looks at the fire for a bit, scratches his arse thoughtfully and then tips a gallon of petrol onto it. And then he goes on the news and says people expecting not to be on fire is the real problem here.
ska invita
back on the other side
If you reject the genius Lest Have a Recession plan, and within the confines of the current political system, what would you want the government to do in this short term situation? Let state sector wages where the government has veto rise with inflation a given, but beyond that.
Smokeandsteam
Working Class First
1. Raise incomes - wages, pensions etc
2. Price controls on energy, rent & mortgages and food
3. Tax the super rich and excess profits.
ska invita
back on the other side
i dont know much about economics and tbf i thought of those too - even without high inflation seems like a plan - but would that necessarily stop inflation? 1 + 2 for sure help. 3 would corporations not just gouge more? are there any other short term levers?
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