Deflation Watch pt 152

Generali

michaels wrote: »

Just because I am in a minority of one doesn't necessarily mean I am wrong.

Whilst most are getting very excited about the US interest rate 'hike' and predicting the UK will rapidly follow suit I thought I would look at UK shop prices and volumes:

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/november-2015/index.html

YoY volumes up a healthy 5%...and yet value is only up 1.4% because prices are down 3.3% - to me shop prices down 3.3% in a year is getting pretty close to the level of deflation where you put off buying stuff cos it will be cheaper next year.

Still we are definitely going to see increasing interest rates to head off inflation and a note to history watchers Japan never saw any false dawns and attempts at monetary tightening that soon had to be reversed after all....

There are very few if any parallels between the UK and Japanese economies. Japan's demographics are horrible in a way that Britain's just aren't, Japan has a huge debt problem that the UK doesn't and Japan has a terrible economic structure which the UK doesn't (try exporting rice to Japan or setting up a truck delivery company there).

michaels

Generali wrote: »

There are very few if any parallels between the UK and Japanese economies. Japan's demographics are horrible in a way that Britain's just aren't, Japan has a huge debt problem that the UK doesn't and Japan has a terrible economic structure which the UK doesn't (try exporting rice to Japan or setting up a truck delivery company there).

So our demographics have been saved by migration (first and second generation) but even so we still need European labour to keep the economy expanding and Europe (well until they let in a million Syrians) looked just as bad demographically as Japan.

Generali

michaels wrote: »

So our demographics have been saved by migration (first and second generation) but even so we still need European labour to keep the economy expanding and Europe (well until they let in a million Syrians) looked just as bad demographically as Japan.

Yes, the UK's demographics have been saved by migration.

Let's see what happens to deflation once the repricing of oil passes through the numbers.