Macroeconomics, the economy, inflation etc. *likely to be very dull*
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But £30bn less than forecastsurrey_commuter said:
that really does not cheer me upkingstongraham said:
Hate to break it to you, but the borrowing was actually £116.9bn in the financial year to January 23.surrey_commuter said:
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.rick_chasey said:
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The OBR's forecast back in November 2022 - a whole 3 months ago - for the 10 months to Jan 2023 was £147b. How on earth can they have over-estimated borrowing over a 3 month period so badly?surrey_commuter said:
that really does not cheer me upkingstongraham said:
Hate to break it to you, but the borrowing was actually £116.9bn in the financial year to January 23.surrey_commuter said:
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.rick_chasey said:
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https://obr.uk/docs/dlm_uploads/February_2023_PSF_commentary.pdfwallace_and_gromit said:
The OBR's forecast back in November 2022 - a whole 3 months ago - for the 10 months to Jan 2023 was £147b. How on earth can they have over-estimated borrowing over a 3 month period so badly?surrey_commuter said:
that really does not cheer me upkingstongraham said:
Hate to break it to you, but the borrowing was actually £116.9bn in the financial year to January 23.surrey_commuter said:
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.rick_chasey said:0 -
Surrey about to be insolvent, too.surrey_commuter said:
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.rick_chasey said:
Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
https://www.theguardian.com/society/2023/feb/21/woking-surrey-council-brink-insolvency-debts-2bn1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
rjsterry said:
Surrey about to be insolvent, too.surrey_commuter said:
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.rick_chasey said:
Anyway what do we think of Croydon council borrowing at ultra low rates to invest and now face a £500m hole?
https://www.theguardian.com/society/2023/feb/21/woking-surrey-council-brink-insolvency-debts-2bn
Well the Woking bit of it, while apparently owning a Hilton Hotel, amongst other 'investments'.0 -
Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too0 -
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Is consumption really a problem? Surely the issue is that the inflation isn’t caused by consumption which is why interest rates aren’t helping. Not sure clamping on consumption is good for growth either.rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too0 -
How else do you think taming inflation works? What do you think raising rates does that’s different to this?focuszing723 said:Because they weren't as sensible as me and ignored historic interests rates.
Didn't you keep banging on about Government debt doesn't matter because low IR's? Just as the vast majority of so say experts were saying.
Tax too much and business go to the wall, people will have to cut back even more.0 -
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A stable govt trumps all of that.focuszing723 said:We've been over this before low IR's make the Country more attractive to foreign investment.
Tax on consumption is not a tax on investment anyway.
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All I know is there is a lot of debt and it's BoE's remit is to curb inflation.
It does make me wonder too if some companies are just increasing prices to see what they can get away with and if it's questioned chalk it up as inflation.0 -
This. There's a massive signal extraction problem, people simply can't understand whether things are going up because they are in short supply or for some other reason - this is one of the main reasons inflation is so harmful (as resources are allocated to the wrong parts of the economy).focuszing723 said:All I know is there is a lot of debt and it's BoE's remit is to curb inflation.
It does make me wonder too if some companies are just increasing prices to see what they can get away with and if it's questioned chalk it up as inflation.
I noticed that Lidl jacked up the price of its lactose free milk from about 90p to £1.40! before finally dropping down to about £1.15. Still a pretty large real terms increase way above general inflation (and I'm pretty sure farmers weren't passing on their costs to supermarkets).0 -
And Penguins are subject to both inflation and shrinkflation: fewer bars and more expensive. Gotta keep the metric simple to understand!0
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Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.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.0 -
Be interested (genuinely) to hear what you the right one (or ones) is? Agree stopping people from consuming by increasing interest rates unlikely to be very helpful. I can see a second round benefit from increased interest rates - to the extent that the supply shocks are for inputs denominated in other currencies keeping Stirling (relatively) high presumably helps (a little) with that. Prices and incomes policy seems very much out of vogue - I don't think there's any evidence of a wage price spiral and the govt. has no jurisdiction or negotiating power over internationally traded goods - maybe it could look into joining a larger group of nations to give us more influence over those things? ;-) So supply side policies it is? Four day week anyone? Or are we going to put some blipverts on the tv to make everyone believe that inflation is going to disappear (as the BoE has it under control) and it will magically disappear with those 'rational' expectations? ;-)pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.0 -
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.0 -
To answer you and Mr. B-Campag, I don't have an answer and neither does the government, far less the banks. Go back 9 months (?) and I said it then. The government has no control over what is causing the inflation. It is not caused by over spending.rick_chasey said:
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.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.0 -
Sure it is. That’s literally what it is. More spending *than the supply can handle*pblakeney said:
To answer you and Mr. B-Campag, I don't have an answer and neither does the government, far less the banks. Go back 9 months (?) and I said it then. The government has no control over what is causing the inflation. It is not caused by over spending.rick_chasey said:
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.
Can’t increase supply quickly. That’s a slow thing. Can cut or stimulate demand much more quickly.
Rate rises work because because spend less on things because they’re spending more of it on debt servicing.
So rather than spending £1300 on your mortgage you’re spending £2000. So you spend less.
I’ll dig out a chart to explain if you want.
In the short term, supply is fixed.
So imagine demand (AD) is already on the almost vertical bit of supply. If you increase demand, aka spending, it doesn’t grow the overall economic output (x axis) it just pumps prices up.0 -
We disagree.
I think the inflation has been caused by worldwide situations. We are not in control.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.0 -
Sure. That’s restricted supply - imagine shifting that curves supply line leftwards.pblakeney said:We disagree.
I think the inflation has been caused by worldwide situations. We are not in control.
But the only ways you slow inflation down is cutting into spending.
That is what rates rises do!
I recon you’d be better off taxing harder.0 -
I think we could have waited it out and it would have been fine. Didn't really get that option because of the mad old bastards in the tory party.0
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How does it work when essentials like food and energy are getting more expensive? You can deter people from wasting them but not much more. Stopping demand for other stuff is surely risking any kind of growth and creating / deepening a recession?rick_chasey said:
Sure it is. That’s literally what it is. More spending *than the supply can handle*pblakeney said:
To answer you and Mr. B-Campag, I don't have an answer and neither does the government, far less the banks. Go back 9 months (?) and I said it then. The government has no control over what is causing the inflation. It is not caused by over spending.rick_chasey said:
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.
Can’t increase supply quickly. That’s a slow thing. Can cut or stimulate demand much more quickly.
Rate rises work because because spend less on things because they’re spending more of it on debt servicing.
So rather than spending £1300 on your mortgage you’re spending £2000. So you spend less.
I’ll dig out a chart to explain if you want.
In the short term, supply is fixed.
So imagine demand (AD) is already on the almost vertical bit of supply. If you increase demand, aka spending, it doesn’t grow the overall economic output (x axis) it just pumps prices up.0 -
The other thing to remember is that we've been led to believe near zero rates are the new norm. Actually it's more akin to 5.5%, currently at 4%.
Debt has been cheap and it's been too cheap for too long.0 -
Shifts the supply curve. A big oil shock would shift the LRAS leftwards.Pross said:
How does it work when essentials like food and energy are getting more expensive? You can deter people from wasting them but not much more. Stopping demand for other stuff is surely risking any kind of growth and creating / deepening a recession?rick_chasey said:
Sure it is. That’s literally what it is. More spending *than the supply can handle*pblakeney said:
To answer you and Mr. B-Campag, I don't have an answer and neither does the government, far less the banks. Go back 9 months (?) and I said it then. The government has no control over what is causing the inflation. It is not caused by over spending.rick_chasey said:
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.
Can’t increase supply quickly. That’s a slow thing. Can cut or stimulate demand much more quickly.
Rate rises work because because spend less on things because they’re spending more of it on debt servicing.
So rather than spending £1300 on your mortgage you’re spending £2000. So you spend less.
I’ll dig out a chart to explain if you want.
In the short term, supply is fixed.
So imagine demand (AD) is already on the almost vertical bit of supply. If you increase demand, aka spending, it doesn’t grow the overall economic output (x axis) it just pumps prices up.
Like this:
So here, the the supply shifts left as the higher energy prices effectively restrict aggregate supply, and to combat that, in the right hand chart, the rate rises shift spending ie aggregate demand leftwards to compensate.
you can see what happens to growth as a result.0 -
In such times, central banks have a choice between inflation and a recession. They've all chosen recession although the ECB is playing catch up.Pross said:
How does it work when essentials like food and energy are getting more expensive? You can deter people from wasting them but not much more. Stopping demand for other stuff is surely risking any kind of growth and creating / deepening a recession?rick_chasey said:
Sure it is. That’s literally what it is. More spending *than the supply can handle*pblakeney said:
To answer you and Mr. B-Campag, I don't have an answer and neither does the government, far less the banks. Go back 9 months (?) and I said it then. The government has no control over what is causing the inflation. It is not caused by over spending.rick_chasey said:
How do you propose cutting inflation?pblakeney said:
Is anyone confident that they can?rick_chasey said:Given central banks spent a decade failing to juice inflation, why are we all so confident they can rein it in?
Might need a bit of extra tax to take some heat out of consumption. Would help appease people like SC too
They only have one tool and it is the wrong one.
Ultimately it’s about reining in spending one way or other.
Can’t increase supply quickly. That’s a slow thing. Can cut or stimulate demand much more quickly.
Rate rises work because because spend less on things because they’re spending more of it on debt servicing.
So rather than spending £1300 on your mortgage you’re spending £2000. So you spend less.
I’ll dig out a chart to explain if you want.
In the short term, supply is fixed.
So imagine demand (AD) is already on the almost vertical bit of supply. If you increase demand, aka spending, it doesn’t grow the overall economic output (x axis) it just pumps prices up.0
