Interest rates 'may hit 8pc' in two years

Graham_Devon

Really2 wrote: »

Also do wage increases need to match inflation for people to be better off in real terms?
It depends on what you spend, a 1% pay rise could beat general inflation of 3%+ as longs as your increase in wages in nominal term is higher than you increase in inflation in nominal terms.

And I'm confusing things.

Good lord.

:wall::wall::wall::wall:

ILW

chucky wrote: »

don't try and deliberately confuse things.

external inflation can be reduced or increased by exchange rates

if we have internal inflation it's due to growth and if we have grwoth it means that we have wage increases and which means asset prices are most likely going to increase.

you've tried to deliveratly confuse it - better luck next time or do we have to explain the different types of inflation to you again?

it was only last week that it was explained to you

Exchange rates are generally dictated by the markets. (in the UK anyway)

chucky

Graham_Devon wrote: »

You talk of me confusing things, but STILL won't tell us what you mean by wage inflation.

i though that was pretty obvious - wage inflation is when wages increase.

Really2

ILW wrote: »

Exchange rates are generally dictated by the markets. (in the UK anyway)

Do the markets not react to BOE base rate changes?

ILW

Really2 wrote: »

Do the markets not react to BOE base rate changes?

Not always as the Boe would wish.
Especially if the currency speculators get a whiff of something.

Really2

Graham_Devon wrote: »

And I'm confusing things.

Good lord.

:wall::wall::wall::wall:

It is simple maths GD.

If you earn £25K and get a wage increase of 1% you earn £250 extra.

Providing what you spend your money on over the year has not increased by over £250 you are better off.

Fairly simple, but you could argue you £25K has devalued over the year. Depends on how you look at it.

chucky

ILW wrote: »

Exchange rates are generally dictated by the markets. (in the UK anyway)

what do you think the bank of england foreign currency reserves are used for?

in the early 1990s that BoE constantly used the foreign currency reserves to assist the exchange rate - if the time arises that you reckon are a possibility; they will have to do the same again.

Really2

ILW wrote: »

Not always as the Boe would wish.

What, so most of the time then. If not why do the BOE use monetary policy to target inflation?

Sounds like a pointless remit if it does nothing.

ILW

Really2 wrote: »

Sounds like a pointless remit if it does nothing.

Think you may have a very good point there. It does keep a lot of people in very highly paid jobs though.

Graham_Devon

chucky wrote: »

i though that was pretty obvious - wage inflation is when wages increase.

Which obviously isn't my question.

It's also obvious why you won't give a straight answer. You want to talk about wage inflation in a way you will always be right.

We will pretty much always have wage inflation....not many will see their hourly pay actually cut.

As I said earlier on this thread, wage inflation keeping up with inflation is a completely different thing. You know it, I know it.

Yet you'll simply pass me off as Mr Muddle for picking you up on it and asking you to describe what you are talking about.

Wage inflation at 1% when general inflation is 5%, is what most regard as falling wages, less income etc.