Omg 18%

zagfles

NedS said:

zagfles said:

ussdave said:

SouthCoastBoy said:

sevenhills said:

SouthCoastBoy said:

 From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

I have not seen anything that states benefits will increase with inflation, the state pension yes.
Poor people are getting hundreds £££s towards their energy bills, they won't get an inflation increase too.
More likely nothing or an increase to match wage increases.
The minimum wage could increase by 10+%

State benefits are currently linked to the sept inflation figure, this needs to be severed, totally unfair for benefits to increase with inflation when workers who pay for the benefits will most probably be receiving less than cpi in annual pay review.

I would much prefer that we argue for higher wages for workers rather than a race to the bottom for benefits claimants.  

And an inflation spiral like in the 1970's where higher wages lead to higher inflation which leads to higher wage demands which lead to higher inflation...

Totally agree. The most effective way to combat high inflation is a good old fashioned recession where businesses go bust and people lose their jobs.

Either we increase earnings, giving people the spending power to keep fueling rising prices and we keep high inflation (which ends up costing us all), or those unfortunate to lose their jobs (and businesses) in a recession pay the price for getting inflation down again.

The BoE have already stated their (only) priority is inflation, as that is their remit. That will mean more interest rate rises and almost certainly a recession. The BoE do not care about that as that is not part of their remit. As long as inflation can be brought back down to the 2% range, all will be good in the BoE world. Those in secure jobs with no debt will pay a lower price than those who lose their jobs and/or have high amounts of debt to service.

Although I'm not sure the normal rules apply. Effectively we currently have full employment, in that there are more vacancies than job seekers. So "loss of jobs" might just mean less vacancies, which employers are having difficulty filling anyway.

Also the inflationary causes are blatently obvious and narrow, ie fuel prices (and their knock-on to other stuff).

Plus increasing interest rates could benefit young people by reducing house prices, something that could lower the amount they end up paying for their biggest debt over their lifetime.

Albermarle

Although I'm not sure the normal rules apply. 

I know it is a cliche, but I think you are right in that 'this time it will be different', and because of that quite unpredictable. 

[Deleted User]

zagfles said:

Deleted_User said:

This is one prediction from an analyst at Citibank. Look at the accuracy of talking heads’ past predictions. E.g. “inflation will be easing” in November 2021. https://www.reuters.com/world/uk/uk-inflation-expectations-fall-first-time-6-months-citiyougov-2021-11-26/

Talking heads are there to give predictions.  We are here to ignore talking heads and their predictions.   

That was well before all the Ukraine stuff kicked off though.

True. And Citi’s forecast was made well before smth else happened.

NedS

Albermarle said:

Although I'm not sure the normal rules apply. 

I know it is a cliche, but I think you are right in that 'this time it will be different', and because of that quite unpredictable. 

I can accept that. Though interest rates will rise, we will still have a recession and inflation will then fall, so I'm not sure how different

SouthCoastBoy

zagfles said:

NedS said:

zagfles said:

ussdave said:

SouthCoastBoy said:

sevenhills said:

SouthCoastBoy said:

 From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

I have not seen anything that states benefits will increase with inflation, the state pension yes.
Poor people are getting hundreds £££s towards their energy bills, they won't get an inflation increase too.
More likely nothing or an increase to match wage increases.
The minimum wage could increase by 10+%

State benefits are currently linked to the sept inflation figure, this needs to be severed, totally unfair for benefits to increase with inflation when workers who pay for the benefits will most probably be receiving less than cpi in annual pay review.

I would much prefer that we argue for higher wages for workers rather than a race to the bottom for benefits claimants.  

And an inflation spiral like in the 1970's where higher wages lead to higher inflation which leads to higher wage demands which lead to higher inflation...

Totally agree. The most effective way to combat high inflation is a good old fashioned recession where businesses go bust and people lose their jobs.

Either we increase earnings, giving people the spending power to keep fueling rising prices and we keep high inflation (which ends up costing us all), or those unfortunate to lose their jobs (and businesses) in a recession pay the price for getting inflation down again.

The BoE have already stated their (only) priority is inflation, as that is their remit. That will mean more interest rate rises and almost certainly a recession. The BoE do not care about that as that is not part of their remit. As long as inflation can be brought back down to the 2% range, all will be good in the BoE world. Those in secure jobs with no debt will pay a lower price than those who lose their jobs and/or have high amounts of debt to service.

Although I'm not sure the normal rules apply. Effectively we currently have full employment, in that there are more vacancies than job seekers. So "loss of jobs" might just mean less vacancies, which employers are having difficulty filling anyway.

Also the inflationary causes are blatently obvious and narrow, ie fuel prices (and their knock-on to other stuff).

Plus increasing interest rates could benefit young people by reducing house prices, something that could lower the amount they end up paying for their biggest debt over their lifetime.

The problem we currently have, due to govt intervention, is a massive transfer of wealth from workers to pensioners and people on benefits, we don't have full employment, we have people not economically active as it is not cost effective. Govt policy needs to change otherwise we could see uk sliding into a crisis with higher and higher inflation. Not sure the politicians are aware of the risk to the UK, by giving more money to non producers it is creating an ever bigger inflation cycle.

MiserlyMartin

cfw1994 said:

sgx2000 said:

I am 62
Was potentially looking at retirement in 2 years....
But god only kmows when now....

Whats next?  The Russians turning all the gas off to europe?

Very possibly.
Shows what a terrorist state Herr Putin’s Russia has become.
Buckle up, wrap up, and do your best to keep warm…..

And meanwhile Boris is jetting off to Ukraine while there is an crisis at home and he has the cheek to tell us that these high prices is a price worth paying for the Ukraine war! The UK has a high level of debt but Boris sees fit to load billions after billions of fresh spending on weapons for that war, which we will have to pay for alongside energy rises. The solution seems to be keep fighting - not sit down at the peacetable, without all these weapons the war would have been over by now and our energy prices back down. Not to mention the lives saved by the war ending. They are prolonging it by sending these weapons. I don't think the policy has public support.

Greylocks

Pat38493 said:

saucer said:

SouthCoastBoy said:

Moby said:

I wonder whether we'll get matching increases in our ndex linked LGPS pensions this Sept. Wouldn't be surprised if the Govmt capped them!
I reckon I'll still get a larger increase than the pay increase I'd have got if I'd continued working though. 

People with public sector pensions are the lucky ones they are protected by inflation. From what the government is saying it also looks like people receiving benefits are also protected, it's the workers and people with private pensions that are going to take the hit

Of course people with public sector pensions who are still working are less well protected than those in payment. For people with ‘gilt edge’ final salary schemes inflation is of little benefit if the salary is lagging it. Wage inflation significantly lower than in private sector on average. 

There is a discussion currently on NHS pension forums where some posters are considering retiring earlier than planned as they will get larger increases on their pension than on their income.

Pat: which forum is this please? 

Thank you,
G

indiasign

“without all these weapons the war would have been over by now and our energy prices back down”

Yeah, because us having cheap energy is far more important than Ukrainian independence.

SMH! 

sevenhills

SouthCoastBoy said:

The problem we currently have, due to govt intervention, is a massive transfer of wealth from workers to pensioners and people on benefits, we don't have full employment, we have people not economically active as it is not cost effective. Govt policy needs to change otherwise we could see uk sliding into a crisis with higher and higher inflation. Not sure the politicians are aware of the risk to the UK, by giving more money to non producers it is creating an ever bigger inflation cycle.

The party of the rich and business has been in power since 2010, how can that be the case and which party will sort the problem?
How much above earnings have pensions increased?
Giving money to pensioners and the economically inactive hasn't caused inflation, that is down to worldwide issues and printing money.

sgx2000

Wow...

I wasnt expecting this to turn into a political debate.....

All i was just expecting was some wise words from the most financially astute ....

Perhaps some financial reassurance for, us, the financial novices.