There is truth in the essentials they will always be in demand regardless unless people just stop eating and living, however it will help in some way. It will make debt costlier a d discourage lending for luxuries and always possibly help is places where demand outweighs supply.
Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
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There is truth in the essentials they will always be in demand regardless unless people just stop eating and living, however it will help in some way. It will make debt costlier a d discourage lending for luxuries and always possibly help is places where demand outweighs supply.
You think people will stop paying their mortgage, stop paying to drive to work, stop buying food they need to eat then, and stop paying for the electric to use their fridge, cooker etc?
Ok so it wont be kept in check, thanks.
If your currency is worthless nothing else matters really, hyperinflation?
Soldato
A wheelbarrow full of cash just to buy a loaf of bread. People think it can't happen, but it's happened to more than one country over the years...
Ehh no..thats not how it works in the bigger picture. People Will pay those. They will do that by not paying for extras, new Tvs new Cars, New...well..stuff. Stuff that is made about the world, that causes a slow down in demand, that stops so many places making as "much" which in turn uses less fuel and energy and resources in the hope that the turn down in peak demand lessens the local and global need for gas etc. Hence why its a much bigger deal the US is hitting the brakes on things so much faster, if every country took the same approach it works a lot faster.
Have we never been lower than their rates before? curious if we have and what happened.
Right so you think the problem is tv's have got too expensive? or rather too many luxuries are been brought which is impacting the supply of energy, food, oil etc. The issue I have with this, do we keep people broken and miserable forever or do we let the water flow again, but when the supply constraint has not been addressed we back to where we were.
No..again, that's not it at all. I can't explain more clearly on a forum without crayons and jotter paper for you.
What uses more energy/ money?...Sticking with a perfectly fine TV you have now?...or buying the new one to be made shipped driven etc to you?
Well you have the people feeling the pinch now, who are likely already reigning in any luxury spending, and you have the people who wont feel it even if rates were 20%, I know someone e.g. spending 20k on renovations this month, and they have no mortgage costs, and a salary that all this doesnt matter to them. So I think what you are saying is going to be a drop in the ocean.
So you know one person in a small percentile at the top of earners in the UK and you think that's proof?
For the ONE person you know, there wtill be 10-20 who are about to think of renovations with a mortgage, or not, but will see the "trend" of interest hikes, many, or most, would have to take out a loan to pay for that kinda work. It will be those poeple going " Ya know..we should wait to see what happens here before we get into ever increasing debt". One of the biggest easiest indicators in trends in the building hosing market, when it flushes itself ya know why. Then, well, then supply and demand lessens, less fuel being used and energy over all, "cooling" the demand that's outstripping supply.
A lot of Banks aren't trying to fix "today" they are trying to fix next year.
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Of course it has, but we are in a period where the Fed is jacking up their rates quickly and aggressively, which is putting pressure on every other currency in the world, including Sterling. If our currency then weakens then that, which you already noted, puts up the price of our energy/fuel again - which then affects everything including the essentials.
We both speculating on what may and may not happen, I just think using a blunt interest rate rise tool without touching anything else is not going to be a magic fix, but it will cause misery for millions, which you seem to think is ok as some kind of acceptable collateral damage. I know many people of various wealth like probably many of us here, and I am trying to think of someone who is comfortable now (so splashing the cash) but then would become constrained by a rate rise, I cant think of a single person, they either already tightening the purse strings or will be able to absorb it all, no in betweens.
I think this is been done as banks operate based on what may have worked historically and dont have much tools at their disposal, they not the government, just bankers.
I agree on this point, because they had no constraint, its pretty much screwed everyone else over in to following, we may be able to limit further inflation from protecting the currency, the point I was debating is it wont cancel the current inflation. So we will have same inflation but with a poorer population. There is definite repercussions to the rate rises, things will get worse not better.
Im not speculating, its historically there to see for yourself. You think this the first time bank put up interest rates to counter inflation?
I never ever would say it does not come without heavy big collateral damage, I would never say that as after 2008 I have been out of work at times etc and made redundant etc due to down turns.
All I've done is try and explain how interest rates work to impact on inflation. You seem to think its a personal attack for some weird reason.
Of course but currency markets are all about the future. GBP has risen today because the BoE were incredibly hawkish with their words (despite a timid 25bp rise) and the market now expects interest rate rises to continue for the foreseeable future.
I don't think there is a single thing that can be done to change that fact.
As cu3ed said though, these sorts of tweaks aren't aiming to fix the "now" they are looking further down the line.
Inflation is not necessarily inflation, there is different type's of inflation. A few of us e.g. have commented in the past how flawed the official way of measuring inflation is.
I don't know the timeframe, but the ONS has said they are radically changing the way inflation will be calculated to massively expand the range of goods and take more live data from EPOS systems (afaik)
Yes, and those people who are feeling the pinch now are going to be feeling it even more the longer interest rates remain low against imported inflation.
The bottom line is that low interest rates are unsustainable. They are anything but normal, and rates at circa 5% is about right when looking at things over the decades on an average basis
The problem basically is that some people have been hooked on cheap credit for the past 15 years, and many of those people are fairly young who probably don't/didn't know that rates below 1% are not normal nor healthy.
I'm sorry that people are going to lose their homes - i've seen this before in the 80's and 90's and it's not pretty. Many people will be on a decent fix though so the widespread immediate damage will be limited, but again, as the months go on, rates are only going to increase further so I would hope that those on fixes are getting their finances in order NOW. I suspect they won't however because they'll be paying more for food, fuel and energy in the interim, and probably looking at job losses the more inflation climbs.