Economics
24 watchers
Mar 2022
10:20am, 4 Mar 2022
269 posts
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MAG
Can someone tell me why I am factually wrong - I hope I am just fear I am right. With the cost of living going up so much, like my utilities bill is predicted to basically double from a year ago to next year (now with Shell) added to that NI raise, car tax raise, interest rates increase affecting some mortgages....we really are in a inflation period. People up and down the country will need to spend more on the essentials and less on the non-essentials like eating out, cafes, leisure etc. With (for example) pubs and cafes having to put prices up due to inflation and keep the premises warm, will they struggle (people not spending as much in this sector) then fold sadly....causing a contraction in the medium term? Not not any particular skin in this game aside from living and working in the UK but in IT. Just thinking and looking ahead i see so many issues developing but I recognise I certainly could have flawed thinking....so please someone tell me I am wrong.... The only counter argument I have in my mind is people will go into debt just to get out and have fun after been cooped up for so long, avoiding COVID. |
Mar 2022
10:23am, 4 Mar 2022
41,667 posts
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HappyG(rrr)
... waits for an economist to answer, but in mean time... Yip, that's generally the problem with inflation. Reduces economic activity, many businesses fail, unemployment rises etc. Hence the drive to keep inflation to the 2% target. My only hope is that this is a relatively temporary and artificial blip caused by 2 years of stagnation and artificial economic support by governments during Covid, and that after maybe a year, things will stabilise again. No evidence for that, just hope.  G
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Mar 2022
10:53am, 4 Mar 2022
22,179 posts
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Bazoaxe
This is a worrying time with costs increasing across the board and people are now having to make choices. In fact those are not really fully clear until the increased fuel bills start to hit and the reduced pay due to NI increase start to bite. Added to that my employer for the 2nd year in a row has no pay rise allocation and so that makes the problem even more challenging. Therefore some serious belt tightening is required or alternatively I could think about saving less for the future. However most of my savings go into my pension which has tax/Ni benefits and of course if I reduce that, the taxman takes his share before I actually see any of that in my bank account. |
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Mar 2022
10:58am, 4 Mar 2022
22,180 posts
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Bazoaxe
oh, and added to that the value of any savings actually built up has plummeted as well
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Mar 2022
2:46pm, 4 Mar 2022
270 posts
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MAG
Bazoaxe, my employer has given me below inflation pay rises for 6 years, which is pretty standard practice. They did do an extra 1% for the whole company from April this year which is probably all they could afford to do. My conversation about inflation with my manger hit home, he wanted my figures for himself. I am well paid in the grand scheme of things, but year on year I know it is eroding bit like my savings since Xmas due to all the issues of 2022. Just read this on the BBC, not sure when the good news will come: Mr Malpass points out that both Russia and Ukraine are big food producers. Ukraine is the world's biggest producer of sunflower oil, with Russia number two, according to S&P Global Platts. Between them they account for 60% of global production. The two countries also account for 28.9% of global wheat exports according to JP Morgan. Wheat prices on the Chicago future exchange have been trading at 14-year highs. |
Mar 2022
5:04pm, 4 Mar 2022
11,130 posts
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lammo
I agree with Happy to an extent, think he might be optimistic in his timescales, and the impact on our energy prices is only going to get worse the longer Putins invasion of Ukraine goes on. Not good for anybody, especially the poor Ukrainian people. |
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Mar 2022
2:19pm, 17 Mar 2022
11,147 posts
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lammo
Blimey, i'd missed this announcement was due, certainly didn't expect another rate rise bbc.co.uk |
Mar 2022
2:22pm, 17 Mar 2022
3,553 posts
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Fields
Perhaps the news will prompt the owner of the house I like into accepting my offer. Think I’ll go for a 10 year fixed rate if it’s still in the lower 2% region when I get to that stage |
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Mar 2022
2:30pm, 17 Mar 2022
11,148 posts
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lammo
Sounds sensible Fields, we fixed for 5 years, maybe a year ago... Our council tax for next year came through yesterday, up by 3.4%, which was less than i was expecting |
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Mar 2022
10:37am, 18 Mar 2022
273 posts
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MAG
I fixed on ten years almost 5 years ago (End of June 2017) and been paying slightly over the odds for that time, but it seems ill be head next 5 years. That said if i did a 5 year fixed, June 2017 i would be re-mortgaging now and nearly getting away with it but not quite.....Its 3 months ahead you can look at remortgages so i would have been getting the ball rolling now. Win some - lose some |
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