Macroeconomics, the economy, inflation etc. *likely to be very dull*

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Comments

  • Pross
    Pross Posts: 43,463
    Interest rate rises don’t really seem the appropriate tool for dealing with the causes of the current high inflation. It feels very much a case of having to be seen to be doing something to keep ‘the markets’ happy and that being the only thing they know. Surely ‘the markets’ realise it isn’t doing anything beneficial so I don’t even get how it appeases them.
  • pblakeney
    pblakeney Posts: 27,345
    Pross said:

    Interest rate rises don’t really seem the appropriate tool for dealing with the causes of the current high inflation. It feels very much a case of having to be seen to be doing something to keep ‘the markets’ happy and that being the only thing they know. Surely ‘the markets’ realise it isn’t doing anything beneficial so I don’t even get how it appeases them.

    I pointed this out 9 months ago. They have to be seen to be doing something and that is the only tool they have. Trouble being that the tool is ineffective.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    pblakeney said:

    Vicious spiral. Inflation leads to wage demands leads to increased interest rates leads to wage demands leads to inflation leads to...

    and that belief is one of the core beliefs of Thatcherism, otherwise known as common sense economics
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    One for @surrey_commuter : if you want a challenging viewpoint, follow Julian Jessop on Twitter. 🤨

    I tried but I find the Twitter format too frustrating.

    I would say he knows what he is talking about but uses that knowledge to put forwards one sided arguments that he must know are wrong.
  • wallace_and_gromit
    wallace_and_gromit Posts: 3,638
    rick_chasey said:

    I’d like to see some evidence that wage rises are actually having input into inflation first.

    Thus far not showing up

    The media chatter re inflation does tend to portray the situation as being that everyone bar the "1%" is shivering in misery, barely able to feed themselves. I think the reality is that there are still a lot of people with a lot of discretionary spending power (combination of pay rises and Covid-era savings) and with supply of many services relatively constrained price rises are inevitable. Try booking a cheap flight for example.
  • rjsterry
    rjsterry Posts: 29,605
    surrey_commuter said:

    rjsterry said:

    One for @surrey_commuter : if you want a challenging viewpoint, follow Julian Jessop on Twitter. 🤨

    I tried but I find the Twitter format too frustrating.

    I would say he knows what he is talking about but uses that knowledge to put forwards one sided arguments that he must know are wrong.
    Don't get the impression that he's deliberately writing nonsense for notoriety, but I think he enjoys being contrary/unorthodox.

    I thought his recent comments on public borrowing - cheer up it's less than was forecast - were interesting; likewise on the unwinding of the BoE buying gilts. Not sure I agree or disagree, but good to read a different take without some of the hyperbolic language.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    One for @surrey_commuter : if you want a challenging viewpoint, follow Julian Jessop on Twitter. 🤨

    I tried but I find the Twitter format too frustrating.

    I would say he knows what he is talking about but uses that knowledge to put forwards one sided arguments that he must know are wrong.
    Don't get the impression that he's deliberately writing nonsense for notoriety, but I think he enjoys being contrary/unorthodox.

    I thought his recent comments on public borrowing - cheer up it's less than was forecast - were interesting; likewise on the unwinding of the BoE buying gilts. Not sure I agree or disagree, but good to read a different take without some of the hyperbolic language.
    I find Twitter unreadable and can't see those articles on his blog, if you have a link it would be good.

    I did not mean he is writing nonsense, more that he is reducing arguments to black and white positions.

    I agree that he seems to revel in being the solitary voice
  • rjsterry
    rjsterry Posts: 29,605
    surrey_commuter said:

    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    One for @surrey_commuter : if you want a challenging viewpoint, follow Julian Jessop on Twitter. 🤨

    I tried but I find the Twitter format too frustrating.

    I would say he knows what he is talking about but uses that knowledge to put forwards one sided arguments that he must know are wrong.
    Don't get the impression that he's deliberately writing nonsense for notoriety, but I think he enjoys being contrary/unorthodox.

    I thought his recent comments on public borrowing - cheer up it's less than was forecast - were interesting; likewise on the unwinding of the BoE buying gilts. Not sure I agree or disagree, but good to read a different take without some of the hyperbolic language.
    I find Twitter unreadable and can't see those articles on his blog, if you have a link it would be good.

    I did not mean he is writing nonsense, more that he is reducing arguments to black and white positions.

    I agree that he seems to revel in being the solitary voice
    https://iea.org.uk/media/public-finances-still-on-the-wrong-path-warns-iea-economist/

    Warning he is still a nailed on Trussonomics fan.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    One for @surrey_commuter : if you want a challenging viewpoint, follow Julian Jessop on Twitter. 🤨

    I tried but I find the Twitter format too frustrating.

    I would say he knows what he is talking about but uses that knowledge to put forwards one sided arguments that he must know are wrong.
    Don't get the impression that he's deliberately writing nonsense for notoriety, but I think he enjoys being contrary/unorthodox.

    I thought his recent comments on public borrowing - cheer up it's less than was forecast - were interesting; likewise on the unwinding of the BoE buying gilts. Not sure I agree or disagree, but good to read a different take without some of the hyperbolic language.
    I find Twitter unreadable and can't see those articles on his blog, if you have a link it would be good.

    I did not mean he is writing nonsense, more that he is reducing arguments to black and white positions.

    I agree that he seems to revel in being the solitary voice
    https://iea.org.uk/media/public-finances-still-on-the-wrong-path-warns-iea-economist/

    Warning he is still a nailed on Trussonomics fan.
    now I am getting to like the guy
    “Nonetheless, the public finances are on the wrong path and the Treasury will argue that the Chancellor has no headroom for tax cuts anytime soon. This is not necessarily right: tax cuts that support growth and boost the supply-side performance of the economy could actually help the public finances. But both borrowing and debt are already worryingly high.”

    of course it is very easy to say these things but less easy to spot the politically acceptable ones
  • rjsterry
    rjsterry Posts: 29,605
    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
  • rjsterry
    rjsterry Posts: 29,605
    surrey_commuter said:

    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
    Foiled! 😀

    There's not really an argument against removing those aberrations. One that has cropped up as a graph on Twitter - I'll spare you - is the threshold above which businesses have to be VAT registered. While these undoubtedly have negative effects, I'd need some convincing that they are the key to unleashing growth.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
    Foiled! 😀

    There's not really an argument against removing those aberrations. One that has cropped up as a graph on Twitter - I'll spare you - is the threshold above which businesses have to be VAT registered. While these undoubtedly have negative effects, I'd need some convincing that they are the key to unleashing growth.
    In another context it would be seen as a marginal gain.

    The silver bullet is also the elephant in the room.

    I do wonder if the sudden interest in economic growth is a surrogate for a debate about our future relationship with the EU.
  • rick_chasey
    rick_chasey Posts: 75,661
    pblakeney said:

    rick_chasey said:

    I’d like to see some evidence that wage rises are actually having input into inflation first.

    Thus far not showing up

    You'll have to take that up with Andrew Bailey.
    Yeah he was irresponsible then and still is now.
    surrey_commuter said:

    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
    Foiled! 😀

    There's not really an argument against removing those aberrations. One that has cropped up as a graph on Twitter - I'll spare you - is the threshold above which businesses have to be VAT registered. While these undoubtedly have negative effects, I'd need some convincing that they are the key to unleashing growth.
    In another context it would be seen as a marginal gain.

    The silver bullet is also the elephant in the room.

    I do wonder if the sudden interest in economic growth is a surrogate for a debate about our future relationship with the EU.
    I think the Brexiter conversion to not saying “f@ck business” is the realisation that the perceived success or failure on it hangs on, or at the very least is enabled by, good economic performance.

    _
  • pblakeney
    pblakeney Posts: 27,345
    rick_chasey said:

    pblakeney said:

    rick_chasey said:

    I’d like to see some evidence that wage rises are actually having input into inflation first.

    Thus far not showing up

    You'll have to take that up with Andrew Bailey.
    Yeah he was irresponsible then and still is now.
    Oh, I agree 100%. I cannot change things though.
    That is probably a good thing but at least I realise it.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rick_chasey said:

    pblakeney said:

    rick_chasey said:

    I’d like to see some evidence that wage rises are actually having input into inflation first.

    Thus far not showing up

    You'll have to take that up with Andrew Bailey.
    Yeah he was irresponsible then and still is now.
    surrey_commuter said:

    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
    Foiled! 😀

    There's not really an argument against removing those aberrations. One that has cropped up as a graph on Twitter - I'll spare you - is the threshold above which businesses have to be VAT registered. While these undoubtedly have negative effects, I'd need some convincing that they are the key to unleashing growth.
    In another context it would be seen as a marginal gain.

    The silver bullet is also the elephant in the room.

    I do wonder if the sudden interest in economic growth is a surrogate for a debate about our future relationship with the EU.
    I think the Brexiter conversion to not saying “f@ck business” is the realisation that the perceived success or failure on it hangs on, or at the very least is enabled by, good economic performance.

    As somebody who gives not one fvck about sovereignty I still find it baffling the the Tory party were prepared to fvck business to get their precious Brexit done.

    Somebody mentioned upthread that their business donors had deserted them, with the Russian money taps turned off that leaves them very dependent on a few wealthy Brexity individuals and they have already got what they paid for.
  • rick_chasey
    rick_chasey Posts: 75,661
    edited February 2023
    surrey_commuter said:

    rick_chasey said:

    pblakeney said:

    rick_chasey said:

    I’d like to see some evidence that wage rises are actually having input into inflation first.

    Thus far not showing up

    You'll have to take that up with Andrew Bailey.
    Yeah he was irresponsible then and still is now.
    surrey_commuter said:

    rjsterry said:

    surrey_commuter said:

    rjsterry said:

    I think the bit that sticks out is the belief that tax cuts axiomatically lead to growth.

    I half think you are tricking me into supporting him but I read that as supporting those tax cuts that promote growth. I am sure you will find some that will argue all tax cuts promote growth but there must be a sliding scale.

    So in personal taxation you would sort out the aberrations around UB, CB £100-125k and pensions that lead to marginal tax rates of 60%+ rather than cutting the top rate to 40%
    Foiled! 😀

    There's not really an argument against removing those aberrations. One that has cropped up as a graph on Twitter - I'll spare you - is the threshold above which businesses have to be VAT registered. While these undoubtedly have negative effects, I'd need some convincing that they are the key to unleashing growth.
    In another context it would be seen as a marginal gain.

    The silver bullet is also the elephant in the room.

    I do wonder if the sudden interest in economic growth is a surrogate for a debate about our future relationship with the EU.
    I think the Brexiter conversion to not saying “f@ck business” is the realisation that the perceived success or failure on it hangs on, or at the very least is enabled by, good economic performance.

    As somebody who gives not one fvck about sovereignty I still find it baffling the the Tory party were prepared to fvck business to get their precious Brexit done.

    Somebody mentioned upthread that their business donors had deserted them, with the Russian money taps turned off that leaves them very dependent on a few wealthy Brexity individuals and they have already got what they paid for.
    The money follows the power not the other way around. Plenty of studies in the US about it.

    Should see the lack of donations as a recognition they’ll be out of power for a while.

    They money is to curry favour for decision makers.
    _
  • rick_chasey
    rick_chasey Posts: 75,661


    SC will be happy
    _
  • pblakeney
    pblakeney Posts: 27,345
    rick_chasey said:



    SC will be happy

    We should all be happy.
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • kingstongraham
    kingstongraham Posts: 28,168
    pblakeney said:

    rick_chasey said:



    SC will be happy

    We should all be happy.
    Because we're being "accidentally" dragged into paying more income tax? I'm not sure happy is the right word, but I guess it's good news if they don't decide it's a good idea to spunk it away.
  • pblakeney
    pblakeney Posts: 27,345
    kingstongraham said:

    pblakeney said:

    rick_chasey said:



    SC will be happy

    We should all be happy.
    Because we're being "accidentally" dragged into paying more income tax? I'm not sure happy is the right word, but I guess it's good news if they don't decide it's a good idea to censored it away.
    That is the key caveat.
    Then I become an doomster all over again. 😉
    The above may be fact, or fiction, I may be serious, I may be jesting.
    I am not sure. You have no chance.
    Veronese68 wrote:
    PB is the most sensible person on here.
  • rjsterry
    rjsterry Posts: 29,605
    rick_chasey said:



    SC will be happy
    Ha. You read the next tweet in the thread?
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • kingstongraham
    kingstongraham Posts: 28,168
    pblakeney said:

    kingstongraham said:

    pblakeney said:

    rick_chasey said:



    SC will be happy

    We should all be happy.
    Because we're being "accidentally" dragged into paying more income tax? I'm not sure happy is the right word, but I guess it's good news if they don't decide it's a good idea to censored it away.
    That is the key caveat.
    Then I become an doomster all over again. 😉
    What they should do is restate the assumptions that their cuts after the next election are based on, and make election promises based on something achievable. I'm glad that their "be vaguely sane and hope that something will turn up" strategy after the previous Conservative leadership seems to have worked.
  • rick_chasey
    rick_chasey Posts: 75,661
    rjsterry said:

    rick_chasey said:



    SC will be happy
    Ha. You read the next tweet in the thread?
    ;)
    _
  • surrey_commuter
    surrey_commuter Posts: 18,867
    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
  • rick_chasey
    rick_chasey Posts: 75,661
    surrey_commuter said:

    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
    That's a funding issue. Stop giving councils money and they start veering off the day job to try and make ends meet.
    _
  • kingstongraham
    kingstongraham Posts: 28,168
    surrey_commuter said:

    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
    Think we did that somewhere when Thurrock did the same.
  • kingstongraham
    kingstongraham Posts: 28,168
    surrey_commuter said:

    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Hate to break it to you, but the borrowing was actually £116.9bn in the financial year to January 23.
  • surrey_commuter
    surrey_commuter Posts: 18,867
    kingstongraham said:

    surrey_commuter said:

    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Hate to break it to you, but the borrowing was actually £116.9bn in the financial year to January 23.
    that really does not cheer me up
  • surrey_commuter
    surrey_commuter Posts: 18,867
    kingstongraham said:

    surrey_commuter said:

    rick_chasey said:



    SC will be happy
    Borrowing at £30bn with two months to go does not make me happy, the fact that it is lower than anticipated makes me less unhappy. This is tempered by the fact that the tvvats see it as a green light to borrow more.

    Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
    Think we did that somewhere when Thurrock did the same.
    It won't get the money back but I really feel there should be some stiff penalties for the perpetrators.

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