The Conservative Party

[Saddleworth2]

What Nicola said about tax cuts:

"It would be a serious error for the Scottish government to replicate in every sense that strategic economic mistake that the chancellor made, but we will take decisions that are right for Scotland," she said.
"We live in a situation right now where growing numbers can't afford to heat their homes, can't afford to feed their children, are going without basic essentials, and I don't think many people would think this is the right time to give massive tax cuts to a tiny number of already rich people."
The first minister said "trickle down economics" had been "roundly discredited" and the UK government's current approach would not work.
Given the reaction from markets, Ms Sturgeon predicted a potential increase in interest rates and the cost of borrowing, and a continuing issue with inflation.
"The UK government seems to have no idea what it is doing - the damage it is doing to the economy overall, and to the living standards of the majority, is deep and very, very serious," she said.

Pretty much on the money I would say.

 

[pride in battle]

“Drama Queen” “utter tripe” “pile of nonsense”

This reminds me so much of project fear.

Experts in their fields come out and predict what will happen, conservative loyalists and politicians reply by saying it’s all part of project fear and then 3 years later we all live through what the experts predicted while the morons who said it wouldn’t happen have either fucked off or say “how dare you say you told me so”

You’ve been honest enough over the last couple of days to point out you’ve not got an economics background. So when you say things like “utter nonsense” it’s a reaction based on northing but a blind faith in the Conservative party and BOE. You don’t have any expertise with which to refute or reject the claim, and yet you do because…?

Anyway a return to 1970s economic diasaster ending in IMF bailout is what Nouriel Roubini has predicted for the UK and he knows what he’s talking about, which is why other people are floating it as an end destination if someone doesn’t step in and fix things soone.

Because he's full of shit...#Chippylad

 

[ChicagoBlue]

20% decline in bonds (Gilts) since June. Pensions have thus lost £1TRILLION, and your Real Estate market is going to either seize up OR there will be a price crash, because mortgages (if you can get one!) will immediately become VERY VERY expensive!!!

Winter is coming!

 

[Len Rum]

Tories calling City slickers lefties now!
Just before this weekends Derby wouldn't you know.

 

[ChicagoBlue]

What Nicola said about tax cuts:

"It would be a serious error for the Scottish government to replicate in every sense that strategic economic mistake that the chancellor made, but we will take decisions that are right for Scotland," she said.
"We live in a situation right now where growing numbers can't afford to heat their homes, can't afford to feed their children, are going without basic essentials, and I don't think many people would think this is the right time to give massive tax cuts to a tiny number of already rich people."
The first minister said "trickle down economics" had been "roundly discredited" and the UK government's current approach would not work.
Given the reaction from markets, Ms Sturgeon predicted a potential increase in interest rates and the cost of borrowing, and a continuing issue with inflation.
"The UK government seems to have no idea what it is doing - the damage it is doing to the economy overall, and to the living standards of the majority, is deep and very, very serious," she said.

Pretty much on the money I would say.

The economic fallout SHOULD bring inflation down, but the shock to the system, and especially a few key parts of it, will be excruciatingly painful for those already living hand to mouth.

 

[remember arthur mann]

KamiKwasi working wonder's.

 

[Saddleworth2]

The economic fallout SHOULD bring inflation down, but the shock to the system, and especially a few key parts of it, will be excruciatingly painful for those already living hand to mouth.

How will inflation be brought down? The pound is tanking. Will the beneficiaries of the tax cuts not take advantage of higher interest rates rather than tricking it down? What is going to reduce in price to help?

 

[Chippy_boy]

I'm still hoping the BoE will wake up and smell the coffee.

Ask yourselves this: What is inflation and what causes it? It's a historical measure of what things cost today divided by what they cost 1 year earlier. It's not a forecast of what happens next. It's backwards looking, telling us what happened previously. That's an important point to remember. 10% inflation today tells you things are now 10% more expensive than they were a year ago. But it tells you nothing about what they will cost in a few months time, let alone in a years time. Anyway, what causes it?

It's either (A) businesses putting up prices because they can - because there's more than enough demand for their products and services at the current price point; or (B) because they must, due to their cost base having gone up and they can no longer afford to sell at the current price level.

Currently, ALL our inflation is caused by B. There is no excess demand for anything (setting aside the supply chain issues caused by a global electronics shortage, but that's a separate issue). There is zero need to dampen demand in order to control inflation. It's not being caused by excess demand.

In fact the mini budget was not even inflationary. All it sought to do was to replace the money in people's pockets at a time when they were worse off due to the vastly increased energy costs. People are struggling to afford essentials and I don't hear many whoops of joy about how much more they can now spend on things after the budget. Some of the rich may be better off and I've already said the 45p to 40p cut was a mistake. But that won't make any difference to inflation. Rich people are not going to buy more butter. And there aren't many rich people either.

So there is no need for the BoE to raise interest rates in order to control inflation per se. There could be some justification to do so to support the pound, because obviously a weaker pound means more expensive raw material imports and is therefore an inflationary pressure. But that only impacts imported raw materials or goods not all goods and services many of which are not imported at all. And it is only even relevant if the pound is way lower than it was before the mini budget, and if course it isn't. It's only slightly lower and may not be lower at all by the time the BoE committee next meets in November.

In short, the BoE needs to think long and hard about its next actions. As I have said repeatedly, inflation WILL naturally return to sensible levels once the higher energy costs have stabilized. Flatlined but high energy cost = zero inflation on energy costs. And since the BoE's remit is to keep inflation in the 2% range in the medium term - not "at all times" - then there is very likely no need for them to touch interest rates further at all.

 

[law74]

The economic fallout SHOULD bring inflation down, but the shock to the system, and especially a few key parts of it, will be excruciatingly painful for those already living hand to mouth.

With the crash of the pound against the dollar, the cost of oil is going to rise sharply again, so sadly I can't see inflation going anyway but up, and the BoE will feel compelled to act by raising interest rates yet again.
Higher costs of the mortgage or rent, higher cost of heating the home, higher cost of commuting to work and the cost of food going up as well.
Going to be a busy winter for the bailiffs

 

[law74]

I'm still hoping the BoE will wake up and smell the coffee.

Ask yourselves this: What is inflation and what causes it? It's a historical measure of what things cost today divided by what they cost 1 year earlier. It's not a forecast of what happens next. It's backwards looking, telling us what happened previously. That's an important point to remember. 10% inflation today tells you things are now 10% more expensive than they were a year ago. But it tells you nothing about what they will cost in a few months time, let alone in a years time. Anyway, what causes it?

It's either (A) businesses putting up prices because they can - because there's more than enough demand for their products and services at the current price point; or (B) because they must, due to their cost base having gone up and they can no longer afford to sell at the current price level.

Currently, ALL our inflation is caused by B. There is no excess demand for anything (setting aside the supply chain issues caused by a global electronics shortage, but that's a separate issue). There is zero need to dampen demand in order to control inflation. It's not being caused by excess demand.

In fact the mini budget was not even inflationary. All it sought to do was to replace the money in people's pockets at a time when they were worse off due to the vastly increased energy costs. People are struggling to afford essentials and I don't hear many whoops of joy about how much more they can now spend on things after the budget. Some of the rich may be better off and I've already said the 45p to 40p cut was a mistake. But that won't make any difference to inflation. Rich people are not going to buy more butter. And there aren't many rich people either.

So there is no need for the BoE to raise interest rates in order to control inflation per se. There could be some justification to do so to support the pound, because obviously a weaker pound means more expensive raw material imports and is therefore an inflationary pressure. But that only impacts imported raw materials or goods not all goods and services many of which are not imported at all. And it is only even relevant if the pound is way lower than it was before the mini budget, and if course it isn't. It's only slightly lower and may not be lower at all by the time the BoE committee next meets in November.

In short, the BoE needs to think long and hard about its next actions. As I have said repeatedly, inflation WILL naturally return to sensible levels once the higher energy costs have stabilized. Flatlined but high energy cost = zero inflation on energy costs. And since the BoE's remit is to keep inflation in the 2% range in the medium term - not "at all times" - then there is very likely no need for them to touch interest rates further at all.

The government's mini budget caused the pound to crash.
This results in the cost of oil increasing.

Oil is used for EVERY ASPECT of our economy, heating, transport, energy which then rolls over to the price of a pint of milk or a visit to the doctor