Think inflation worries are over?

lostinrates

Just checked on the sun price checker for local fuel

Deisel low 99.9 av 101.3 high 106

tomterm8

Wookster wrote: »

I fail to see how this would help. House prices desperately need to drop to long term average multiples. They are stupidly overpriced. They have been since 2005.

I agree. There are three major problems with the current situation:

1. Debt to GDP is too high, making debt repayment a very significant proportion of national expenditure.

2. We still need house prices to reduce really quite sharply, by as much as 50%, since the income to price ratio is far too high and

3. Leverage in the banking system needs to be substantially reduced.

Inflation at an acceptable level doesn't help with 2, but it does give people a breathing space to repay debt and reduce leverage. In deflation, debt becomes a killer. The reason is that the paradox of thrift means that as people seek to repay debt, the overal level of indebtedness over the economy actually gets worse.

Wookster wrote: »

Which country is reporting a 30% annual drop in GDP?

Sorry, you caught me out, I was talking about industrial production - big diffierence. Very embarassing. That said, at a 10% fall in GDP latvia is already experiencing the destruction of its government. And, of course, the fall is reported in its own currency, while there has been a tendancy for

Wookster wrote: »

For inflation to really make a difference to debt we'd have to see inflation of >15% for 3 years. That would be enormously destructive to the economy.

That's not entirely true. On its own inflation isn't going to be enough, but a certain amount of inflation is necessary simply to give people the opportunity to rebuild their ballance sheet. With 6% inflation reducing the value of the debt, and a household saving rate of 5% or more, this process will be long drawn out but without the social consequences of a more severe deflationary depression.

There's nothing that can stop this recession being extremely painful, house prices must fall and incomes must rise as part of the end game. But from a policy angle, it is important that with the size of the world output gap opening up the natural deflationary tendancies are combatted.

Really2

lostinrates wrote: »

Just checked on the sun price checker for local fuel

Deisel low 99.9 av 101.3 high 106

There are some advantages not living down south.

Low 97.9 Ave 99.3 high 107.

As I said my last fill up was slightly cheaper but as we all know oil is volatile (in every sense)

Wookster

Really2 wrote: »

As I said my last fill up was slightly cheaper but as we all know oil is volatile (in every sense)

The AA have a slightly different take on matters...

http://www.theaa.com/motoring_advice/fuel/

econo_2

tomterm8 wrote: »

Because, whatever the legislation says, there are more pressing things at the moment than inflation. In fact, it would help tremendously if we could get inflation up to 6-7%.

We are in a debt-deflation scenario, and the only known cure is to inflate like crazy.

Can you please give us an insight on how the single biggest wrecking ball known to modern man and probably the single most misunderstood, will help at the levels you quote?

Rochdale_Pioneers

Wookster wrote: »

How exactly is 9% a "good headline"?

You've never written a headline have you!

Its a simple number, its easy to understand and its quite high so it grabs the attention. Much better than putting down the truth which is different rates of increase on different products

mbga9pgf

Rochdale_Pioneers wrote: »

You've never written a headline have you!

Its a simple number, its easy to understand and its quite high so it grabs the attention. Much better than putting down the truth which is different rates of increase on different products

In other words, a lot more than 9% for some essential staple goods.

Really2

Wookster wrote: »

The AA have a slightly different take on matters...

http://www.theaa.com/motoring_advice/fuel/

We are in March now but don't let facts get in the way of pretending you are right.

As I said my deisel was slightly cheaper than my last fill up is that such a problem.:rolleyes:

Also check out home energy suppliers are you disputing their prices are falling also?

Wookster

Really2 wrote: »

We are in March now but don't let facts get in the way of pretending you are right.

As I said my deisel was slightly cheaper than my last fill up is that such a problem.:rolleyes:

The article is referring to average prices. I'm sure there are anomalies between specific outlets - while on average prices have risen, no doubt there will be some that have fallen. Your experience is no indication of the behaviour of prices across the country.

I've noticed that diesel where I normally fill up has increased fwiw.

I'd be very surprised to have the March report out given that we're only the 5th of March today, unless you have a time machine of course!

Really2

Wookster wrote: »

The article is referring to average prices. I'm sure there are anomalies between specific outlets - while on average prices have risen, no doubt there will be some that have fallen. Your experience is no indication of the behaviour of prices across the country.

I've noticed that diesel where I normally fill up has increased fwiw.

I'd be very surprised to have the March report out given that we're only the 5th of March today, unless you have a time machine of course!

Look I said prices were higher in Feb. I live in an area where fuel is usually fairly cheap and reacts quiet quickly to changes.

As I said my fill up yesterday per litre was cheaper than 3 weeks ago.

Do what losinrates said go on the Sun petrol price checker.

Why would it be such a surprise the exchange rate is about the same as month ago and oil is slightly cheaper.

The main point is a lot cheaper than a year ago and home energy prices are going to fall over this month.
So yes food inflation may be 9% YOY (But is actually lower than Dec's figure) but with other items taken in to account inflation is actually falling and that is fairly indisputable.