Almost there! Unemployment hits 7.1%

pbouk

TheFactory wrote: »

That won't happen either, much needed wage inflation will ensure that prices continue rising. With the obvious exception of London, housing in general is already undervalued.

:rotfl:undervalued you say. And you think this "wage inflation" will come soon do you?

Tancred

cepheus wrote: »

Why Interest rates won't rise according to Jeremy Cook


Firstly, the Bank of England has been eager, in these minutes, to emphasise that productivity growth has been ‘disappointing’. Ben Broadbent, an MPC member, spoke last Friday and warned that ‘a failure of productivity to respond to stronger demand’ could easily see the recovery falter. More people have jobs, that can only be a good thing, but the economy will not strengthen in the long-term if productivity levels don’t recover too.
The second reason is wages. Despite the increases in jobs, take-home pay is still in the doldrums. Pressure has been building on wages, with inflation running above pay increases since May 2010.

We are still waiting for the 3 month average increase to get back above 1.0 per cent(currently it sits at 0.9 per cent) let alone the current inflation reading of 2.0 per cent. Interest rate hikes are unlikely to be popular in a climate of falling real wages and further pressurised wage packets, as mortgage payments for those on variable deals inch higher.
Lastly, we need to take a look at the value of our currency, the (not so) humble pound. The Bank of England has expressed concerns about the run higher in the value of sterling. A move to increase interest rates would be a shot in the arm for an already overvalued currency.

Read more: http://www.thisismoney.co.uk/money/comment/article-2544001/Opinion-There-three-good-reasons-rates-wont-going-just-yet.html#ixzz2r9GKyjTB

Growth will go up, and so will inflation, in spite of all the fiddling by the government with inflation measures. It's cyclical.

Thrugelmir

Loughton_Monkey wrote: »

Expected by analysts to drop to 7.3%, it has gone down to 7.1%, as Carney now starts coughing, spluttering, and finding reasons not to increase base rate next month.....

The benchmark is also linked to future inflation prospects. With subdued wage growth, there's no need to take any action yet. Even the previously inactive are rejoining the workforce.

Plenty of spare capacity to be absorbed as well. With those on zero hour contracts and part timers seeking additional permanent roles on increased hours.

kabayiri

Why is it such a bad thing to start increasing rates? Even if it's only a quarter of a percent at a time. People will need to adapt to higher rates and we need to rebuild the savings culture.

Fella

Carney's exact statement a few months ago was "oh sh*t, soon we won't be able to use inflation as an excuse for low rates, better say we're basing it on unemployment falling to 7%, that'll never happen".

His exact statement today was "oh !!!!!!, unemployment 7.1%? Let me be clear that when I said I'd raise rates if unemployment hit 7% I was lying because I didn't think it'd happen".

As previously mentioned, IRs will not be allowed to rise anytime soon, the MPC will just change the reason they must be kept low. As has been the case for years now.



On a different note, some splendidly unbiased reporting by the BBC yet again today. The headline story on 5 Live was the unemployment figures. How did they choose to report it? By saying what good news it was? By having a coalition MP on? Perhaps even an interview with one of the recently employed?

Nope, they reported it by interviewing some graduate who's not been able to find the job "he wants" & who therefore doesn't believe in the figures & is considering emigrating. It must be nice to be able to push your own political agenda while being funded by an audience that has no choice but to pay for your product, and no say in the matter.

TheFactory

pbouk wrote: »

:rotfl:undervalued you say. And you think this "wage inflation" will come soon do you?

Yes, undervalued.

Yes, over the next few years.

Only time will tell.

I_have_spoken

Just shows Britain can easily afford another Labour government to ensure everyone shares in the immense wealth. At least, that's what a daft leftwit said to me earlier today.

lvader

Even debt (as a % of GDP) has fallen, the Government is on a roll! Once wages start to outperform inflation Labour won't have anything left.

BillJones

lvader wrote: »

Even debt (as a % of GDP) has fallen, the Government is on a roll! Once wages start to outperform inflation Labour won't have anything left.

I think that the data suggests that we are about at that point now. All the claims that the government would tip us into recession have been proven wrong.

Thrugelmir

lvader wrote: »

Even debt (as a % of GDP) has fallen, the Government is on a roll! Once wages start to outperform inflation Labour won't have anything left.

Until the next crisis..........