Deflation Watch pt 152

carolt

kennyboy66 wrote: »

As much of the increase in M4 effectively found its way into house prices /asset prices over the last decade, rather than general prices, maybe thats were the contraction will be felt as well. Or rather thats were it may first appear.

Let's hope so.

lemonjelly

Gen, if you read this, what effect would the anticipated VAT rise have? I assume that'd be an inflationary pressure?

kennyboy66_2

lemonjelly wrote: »

Gen, if you read this, what effect would the anticipated VAT rise have? I assume that'd be an inflationary pressure?

it does increase the RPI rate (as do excise duties etc).

Probably more relevant will be the Chinese letting the RMB appreciate (I'll believe it when I see it.)

sabretoothtigger

It counts but since its a one off Im not sure if its as important. If price of food or oil goes up there is no limit, it could rise 4% every year forever but taxes cant exceed 100%

lvader wrote: »

Bring it on, I'd love a bit of deflation for a few years. :beer:

of wages ? thats the only likely occurrence, wheres the excess supply most apparent

Generali

The new Bank of England lending survery is out:

http://www.bankofengland.co.uk/publications/other/monetary/TrendsJune10.pdf

Unsecured consumer credit is down 0.1% year on year (it was rising on average at 6.1% pa in 2007), secured lending is up 0.9% (vs 11% in 2007) and lending to businesses is down a whopping 8.5% in a year (was up 16.7% in 2007). Reading between the lines, credit is available but people and especially businesses just aren't interested in taking it up. Deleveraging continues and I expect to see another round of QE before long.

Really2

Generali wrote: »

Reading between the lines, credit is available but people and especially businesses just aren't interested in taking it up. Deleveraging continues and I expect to see another round of QE before long.

Businesses are not going to invest when they have spare capacity, it is unlikely we will see any meaningfull investment in business until GDP was near where it was pre-crash.
Lots of companies can hire without expansion at the moment (not that many are) and that is likely to be the case for a couple of years.
But it would be interesting to see what start up lending was like (can any one get that info?). You would think that would be increasing, if not banks are not supporting them or unemployment must be comfortable for some.:eek:

chucky

is there such a measurement as personal M4 and corporate M4?

if so - are they telling us the same story?

Generali

chucky wrote: »

is there such a measurement as personal M4 and corporate M4?

if so - are they telling us the same story?

M4 lending is broken into sectors. I think the numbers are out later today.

purch

http://www.bankofengland.co.uk/statistics/m4/current/index.htm#tables

The June estimates of M4 and M4 Lending are here.

The Tables in PDF format are broken down into lots of crazy items :eek:

foreversummer

Thanks Purch.

Don't suppose Generali is around to interpret them for us?