Interest rates to stay below 1% for 5 years?

sandiep

Harry_Powell wrote: »

There are two ways to control inflation, interest rates and taxes. As we're already set to be hit by a wide range of tax hikes (NI rise already decided) there is no need to raise interest rates. They're giving with one hand and taking away with the other, anyone who thinks this is a good thing is a fool.

There USED to be 2 ways to control inflation. (A generation ago).

However, now we live in a global ecomony and have no oil of our own. So realistically, if the rest of the world starts growing faster than us, and the price of oil goes up faster than GDP (what's that, it's happening already??), then inflation is going to go whooshing up, and any attempts to fix that with interest rates or taxes is just going be surface level tinkering that will do the UK even more harm than good.

Harry_Powell

sandiep wrote: »

There USED to be 2 ways to control inflation. (A generation ago).

However, now we live in a global ecomony and have no oil of our own. So realistically, if the rest of the world starts growing faster than us, and the price of oil goes up faster than GDP (what's that, it's happening already??), then inflation is going to go whooshing up, and any attempts to fix that with interest rates or taxes is just going be surface level tinkering that will do the UK even more harm than good.

Actually we have plenty of oil, just not enough to fulfull 100% of our needs. When oil prices rise, it also means that a lot of the deeper and lower grade oil fields that are not cost effective currently to exploit suddenly become financially viable.

To a certain extent, oil and natural gas are self-limiting, when prices shoot up (as they did 18 months ago) people start selling their gas gussling off roaders and buy more economical cars, or stop making trips altogether. Rightly or wrongly, Petrol is just one item in the 'basket' of items that measure inflation.

sandiep

Harry_Powell wrote: »

Petrol is just one item in the 'basket' of items that measure inflation.

Yes, petrol is one item, but the price of oil is about more than the price of petrol. And too frequently everyone only looks at this issue from the petrol consumers point of view.

It's the price of all products made from oil, and all products made using oil. and the price of EVERYTHING that's delivered to us by air, road and sea. and if you assume that the "transportation" element of the cost of the retail price that you pay equates to around 1/3 - then you see that oil prices are about more than petrol.

40% of the cost of a plant sold at a garden centre is "transportation".
It is a major element of the cost of every single product sold in the UK.

sandiep

Harry_Powell wrote: »

Actually we have plenty of oil, just not enough to fulfull 100% of our needs. When oil prices rise, it also means that a lot of the deeper and lower grade oil fields that are not cost effective currently to exploit suddenly become financially viable.

.

Agree. Unfortunately "suddenly" isn't overnight, and will be long enough to send UK economy into the wobblies again.

And those sites are a lot more expensive to run and extract from. So overall, the price will still be long term higher.

Harry_Powell

I'd be happy for oil to be expensive TBH, I'm tick and tired of the roads being clogged with cars, it's a denger to cycle almost anywhere in the Uk these days. Not to mention the pollution and CO2 emmisions. If we go back to the 1970s or even 80s where cars were a luxury item I'd be very happy.

Spartacus_Mills

Harry_Powell wrote: »

I'd be happy for oil to be expensive TBH, I'm tick and tired of the roads being clogged with cars, it's a denger to cycle almost anywhere in the Uk these days. Not to mention the pollution and CO2 emmisions. If we go back to the 1970s or even 80s where cars were a luxury item I'd be very happy.

:rolleyes:

The danger is to pedestrians like me when cyclists run red lights, as has happened to me when crossing the road at least half a dozen times this year - I always try to make contact with them to knock them off their bikes - and cyclists seeming to think they own the pavements. I walk at least an hour every day. Cyclists are a menace.

StevieJ

Spartacus_Mills wrote: »

:rolleyes:

The danger is to pedestrians like me when cyclists run red lights, as has happened to me when crossing the road at least half a dozen times this year - I always try to make contact with them to knock them off their bikes - and cyclists seeming to think they own the pavements. I walk at least an hour every day. Cyclists are a menace.

I think it is you who are the menace :eek: the bike need not be on the pavement if proper provision was made for them.

Spartacus_Mills

StevieJ wrote: »

I think it is you who are the menace :eek: the bike need not be on the pavement if proper provision was made for them.

A cyclist jumps a red light, as happened to me at least half a dozen times this year, and nearly knocks me over simply because they think red lights do not apply to them and I am the menace.

Errr, okay !!!!!!

Proper provision is made. They can cycle on the road or on cycle ways. Where I go for a walk the pavement is split between pedestrians and cyclists. Fair enough. Still get cyclists cycling on the pedestrianised side though.

sandiep

Harry_Powell wrote: »

I'd be happy for oil to be expensive TBH, I'm tick and tired of the roads being clogged with cars, it's a denger to cycle almost anywhere in the Uk these days. Not to mention the pollution and CO2 emmisions. If we go back to the 1970s or even 80s where cars were a luxury item I'd be very happy.

Would you be happy to see your food bill increase by 25%?
People have such short memories - doesn't anyone remember what happened to the price of rice last year??

Harry_Powell

sandiep wrote: »

Would you be happy to see your food bill increase by 25%?
People have such short memories - doesn't anyone remember what happened to the price of rice last year??

I'd be happy for goods not be transported all over the world and back before they hit our shops. Are you so indoctrinated by globalisation that you can't imagine a world where food is grown locally?

We have the technology to grow everything in the UK, whether outdoors or within greenhouses. Once it becomes cheaper to use these technologies, than to transport food globally then that's what we'll do - leaving the supplier nations to use their arable land to produce varied crops for their own population instead of acres and acres of coffee, tea, tobacco, etc.

So, in short, yet I would like to see food prices rise.