BOE downgrades growth and states inflation will fall next year

PaulF81

I bet those that were conned into paying ppi will just pay off credit card debt with it. Still, great way of deleveraging consumer debt no doubt.

GeorgeHowell

shortchanged wrote: »

Not really, it's all about finances so it's actually a real problem not just a confidence issue. Basically the majority of people have less money/credit than they did a few years ago therefore their spending power is greatly reduced. This is as a result of higher inflation, pay freezes/cuts etc.

There is an element of truth in that. But especially since there has not been mass unemployment this time the reduction in real income has been largely offset by very low mortgage interest rates. People have however in large part chosen to reduce debt and/or save rather than spend out on non-essentials.

shortchanged_2

GeorgeHowell wrote: »

There is an element of truth in that. But especially since there has not been mass unemployment this time the reduction in real income has been largely offset by very low mortgage interest rates. People have however in large part chosen to reduce debt and/or save rather than spend out on non-essentials.

But apparantly according to some on here, not that many people are actually on low rate mortgages.

Thrugelmir

GeorgeHowell wrote: »

But especially since there has not been mass unemployment this time the reduction in real income has been largely offset by very low mortgage interest rates.

Real income has been under squeeze for some years. If you take a profession such as accountancy and related finance activities such as credit control and purchase ledger. Salaries have fallen considerably over the past 15 years.

In the main due to technology. As processing tasks have become increasingly electronic and paper free with less and less human skill required.

This process is far from complete. So salaries certainly won't be increasing in the future.

grizzly1911

Thrugelmir wrote: »

Real income has been under squeeze for some years. If you take a profession such as accountancy and related finance activities such as credit control and purchase ledger. Salaries have fallen considerably over the past 15 years.

In the main due to technology. As processing tasks have become increasingly electronic and paper free with less and less human skill required.

This process is far from complete. So salaries certainly won't be increasing in the future.

As thrug says pay in many sectors has been squeezed for decades. There have been some niche areas and the obvious City bonuses built on hot air.

You could also look to the process driven areas such as banking, insurance where roles have been deskilled, technology has allowed self service, automated risk scoring and bulk automated processing. Call centres moved to India etc.

Many jobs have been deskilled, we have few engineers more technicians assembly "kits" built abroad.

Manufacturing under constant pressure from the far east.

Public sector pay, as a result has also been held down. The NHS were under the cosh, both from downward restructuring and pay freezes way before the current changes.

grizzly1911

nickj wrote: »

surely the last period of growth was mostly built on debt ,
the cost of living , inflation and lack of pay rises will give people even less cash to spend , govt depts are cutting back , europe is skint so where exactly is the growth going to come from , china ?

Not just one period of debt but over several cycles going back 20+ years.

The train has been rolling down hill for years the GFC was when it hit the buffers and we all fell out.

Many on here have been saying the same thing for several years, funny how our leaders only seem to be pubilicy voicing it now.

IMO recovery should be seen like an investment, long term 10years + and just like any investment it can fall and rise.

In time we will just accept it. 4 -5 years already does it matter anymore? Any improvement will be wildy seized on however transitory.

Manage expectations properly and you can easily exceed them.