Is inflation becoming sticky?

handful

I think the issue is we are in uncharted territory with the current "cost push" rather than "demand fed" inflation and the tools for the latter don't appear to be working for the former. By the time we find out if it will work (I don't think it will) we could be into a deep recession.

RogerPensionGuy

I think the government and Bank of England have probably decided amongst themselves it's better they plan the least painful(long-term) recession and get it over and done with rather than kicking cans up and the streets and not being able to control it.

That old phrase comes to mind, not planning is normally planning to fail.

https://www.standard.co.uk/business/high-street-lenders-lift-mortgage-rates-halifax-santander-tsb-lloyds-interest-rates-fixed-tracker-b1092308.html

Universidad

SouthCoastBoy said:

Benefits are a big issue, it should be a last resort, not a lifestyle choice, working has to pay

I don't really agree with the problem you've put out there, but I do agree with the solution.

There's a strain of puritanism that suggests hard work is not only rewarding, but that you should do it anyway because it's the mark of a good person.

But hard work has rarely been less rewarding than it is now.

People see the current generation "quiet quitting" and think they're feckless, but honestly they've got it figured out.

RogerPensionGuy

Water bill inflation is certainly looking horrible the next few years, a mixture of climate change, greedy inept water company management and then the regulatory being asleep. 

https://www.express.co.uk/finance/personalfinance/1785304/martin-lewis-water-bill-ofwat-smart-meter

Malthusian

Universidad said:

People see the current generation "quiet quitting" and think they're feckless, but honestly they've got it figured out.

"Quiet quitting" means "fulfilling your job description to the letter and no more, not doing unpaid overtime, etc". (Not "going on the dole".)
For many baby boomers, what we now called "quiet quitting" was compulsory. If you went over and above you got in trouble with the union.

Albermarle

Relevant article
Inflation falling rapidly but not enough to avert 14th straight Bank of England rate rise, experts warn (msn.com)

Universidad

Malthusian said:

"Quiet quitting" means "fulfilling your job description to the letter and no more, not doing unpaid overtime, etc". (Not "going on the dole".)

Yes, I don't think benefits claimants are that much of a problem, as I say.

But I do think the fact that work is less and less rewarding is a problem, especially when there's a huge cultural momentum suggesting that hard work pays off.

The expectation of extra work from employers has, in my experience, increased dramatically in the last 15 years. There's always the suggestion of jam tomorrow, and I think many younger folks have figured out that working harder just won't bring you jam.

Malthusian said:

For many baby boomers, what we now called "quiet quitting" was compulsory. If you went over and above you got in trouble with the union.

I have never seen that argument made by anyone from that generation before, but it's a really good point!

RogerPensionGuy

Now they talking about 7%

My guess is 6% will be enough and just hold it over 5.25% for a period then when sticking core inflation is absolutely sorted out no ifs and buts, 4.5% Bank of England rate for a good long while, best we forget the 1% party as that beer has run out, but some nice drinking time for people who locked in for a long period. 

https://www.theguardian.com/business/2023/jul/05/interest-rates-jp-morgan-economists-uk-inflation

NedS

Pat38493 said:

Still - this old thread from April makes NedS look like a better expert than the BOE!

Now we've established my crystal ball is working, PM me for next week's lotto numbers (£1 fee payable in advance )

Altior

Universidad said:

Malthusian said:

"Quiet quitting" means "fulfilling your job description to the letter and no more, not doing unpaid overtime, etc". (Not "going on the dole".)

Yes, I don't think benefits claimants are that much of a problem, as I say.

But I do think the fact that work is less and less rewarding is a problem, especially when there's a huge cultural momentum suggesting that hard work pays off.

The expectation of extra work from employers has, in my experience, increased dramatically in the last 15 years. There's always the suggestion of jam tomorrow, and I think many younger folks have figured out that working harder just won't bring you jam.

Malthusian said:

For many baby boomers, what we now called "quiet quitting" was compulsory. If you went over and above you got in trouble with the union.

I have never seen that argument made by anyone from that generation before, but it's a really good point!

If people are hungry enough they will work.

It was as certain as Thursday is tomorrow that furlough would give a proportion of people a taste of being sustained relatively comfortably, free of effort from themselves. It wouldn't be a choice for me, but for others it's their ambition to go through life off the backs of others. 

Work is not mean to be rewarding, it is meant to be fundamentally essential (as a default). A developed society takes care of people who can't work. Not those who simply don't feel like it, or allow themselves to become physically incapable. And with the development of technology, there are very very few people of working age who literally can't work.