how do you see the economy going in the next year or three?

niceguy1966

Distinguished Member
Shrinkflation:

Noticed Kellogs Fruit'N'Fibre was reduced in size from 750g to 700g. Haven't bought it in over a year so don't know when it happened but it has shrunk.
The inflation figures take into account shrinking package sizes.
 

MrsArcanum

Member
Shrinkflation:

Noticed Kellogs Fruit'N'Fibre was reduced in size from 750g to 700g. Haven't bought it in over a year so don't know when it happened but it has shrunk.
Exactly, this type of thing also avoids hitting the CPI figures, as more frequent purchasing is not accounted for.
 

MrsArcanum

Member
The inflation figures take into account shrinking package sizes.
Are they really that detailed?

Think the problem people have, is that CPI does not feel genuine, even excluding fuel and housing costs skews how people perceive their spending. Wine for example is on average £1 dearer per bottle. For someone who pays £10 this may not seem like much, but for someone who buys the £5 bottle a £1 price hike seems like quite a jump.
 

niceguy1966

Distinguished Member
Exactly, this type of thing also avoids hitting the CPI figures, as more frequent purchasing is not accounted for.
The CPI uses a price per volume (e.g. £ per 100g), so smaller pack sizes would affect the result and be measured just the same as if the price has increased.
 

niceguy1966

Distinguished Member
Are they really that detailed?

Think the problem people have, is that CPI does not feel genuine, even excluding fuel and housing costs skews how people perceive their spending. Wine for example is on average £1 dearer per bottle. For someone who pays £10 this may not seem like much, but for someone who buys the £5 bottle a £1 price hike seems like quite a jump.
It's doesn't feel genuine because the weekly shop of someone on minimum wage will be very different from someone with 6 figure salary, but there is only one CPI.

A 10% rise in fuel prices will effect the weekly spend of the former much more than the latter.
 

MrsArcanum

Member
It's doesn't feel genuine because the weekly shop of someone on minimum wage will be very different from someone with 6 figure salary, but there is only one CPI.

A 10% rise in fuel prices will effect the weekly spend of the former much more than the latter.
This is starting to hit those who lost the £20 uplift and will hit the poorest hardest come April 2022 when the NI rises kick in.
 

Metromedia 1433

Active Member
With record-breaking growth, albeit due to the suppression of the economy through lockdowns, was bound to cause a rise in inflation. Supply problems through for example the loss of production during that time and lack of training of HGV drivers during the pandemic is making this worse.

So, raising interest rates will not solve these underlying problems but provide an additional problem through higher mortgage rates.
 

Nick74

Distinguished Member
With record-breaking growth, albeit due to the suppression of the economy through lockdowns, was bound to cause a rise in inflation. Supply problems through for example the loss of production during that time and lack of training of HGV drivers during the pandemic is making this worse.

So, raising interest rates will not solve these underlying problems but provide an additional problem through higher mortgage rates.

Certainly. The implications of the BoE's choices were discussed at reasonable length near the start of this thread.

Is it preferable to reduce people's spending power, forcing people to tighten belts, thereby pushing us toward recession, or would it be better to create a housing market problem?

There's been a rush toward fixed mortgage deals, creating upward pressures in terms of rates. There's a squeeze and problems either way.
 

iFi audio

Member
AVForums Sponsor
I doubt we would get a massive interest rate increase as the governments (and corporations too) got used to a very cheap debt. The increased interest rate would translate into much higher expenses for the government.
 

Ilovewaffles

Well-known Member
It’s nice to know the minimum wage is being increased next year by a decent amount, yet the state pension increase is a piffling rise immediately wiped out by increased council tax etc.
 

MrsArcanum

Member
It’s nice to know the minimum wage is being increased next year by a decent amount, yet the state pension increase is a piffling rise immediately wiped out by increased council tax etc.
You know why it is that way round. Business pays the increases in wage, government pays the pension. Also, you can guarantee they won't raise the thresholds for Tax credits, so those on NMW claiming will be no better off, whilst others will see most of the increase disappear in extra NI costs, both of which feed government coffers.
 

fluxo

Distinguished Member
Shrinkflation:

Noticed Kellogs Fruit'N'Fibre was reduced in size from 750g to 700g. Haven't bought it in over a year so don't know when it happened but it has shrunk.

No wonder the shelves look empty. You need a microscope to see the stock.
 

LakieLady

Distinguished Member
It’s nice to know the minimum wage is being increased next year by a decent amount, yet the state pension increase is a piffling rise immediately wiped out by increased council tax etc.

3.1%, I believe.

I'm quite surprised, tbh, the Tories usually look after us pensioners, believing we all vote Tory.
 

LakieLady

Distinguished Member
You know why it is that way round. Business pays the increases in wage, government pays the pension. Also, you can guarantee they won't raise the thresholds for Tax credits, so those on NMW claiming will be no better off, whilst others will see most of the increase disappear in extra NI costs, both of which feed government coffers.

Yes, at current rates, people on TCs or UC will only get to keep approx 25p of every extra pound they earn, the remaining 75p (approx) will go on tax, NI and clawback from benefits.

I await the announcement of next year's benefit rates and thresholds with interest ...
 

MrsArcanum

Member
Yes, at current rates, people on TCs or UC will only get to keep approx 25p of every extra pound they earn, the remaining 75p (approx) will go on tax, NI and clawback from benefits.

I await the announcement of next year's benefit rates and thresholds with interest ...
 

hamsters1

Well-known Member
Richard Hughes said leaving the EU will reduce the UK's potential GDP by about 4% in the long term.
He said forecasts showed the pandemic would reduce GDP "by a further 2%".

Articles like this don't give me any confidence that our economy is going to flourish any time soon, it would be bad enough with just the damage covid has wrought but we also have Brexit to contend with on top of it. I hope I will have to eat my words and that in a few years everything will be hunky dory but I wont hold my breath.
 

richp007

Distinguished Member
Just incase anyone missed it, this is a good thread (but long) of all the key Budget points.

 

niceguy1966

Distinguished Member
The good old rags always help give people the true picture.


On the plus side, they give all the information to work out what's really happening, even if their conclusion is a little strange.

It's not the first time I've seen this unusual use of maths relating to the NI rise, so it isn't even an original thought by this person.
 

richp007

Distinguished Member
Obviously completely buried news with all the other shenanigans going on.

I still reckon though they'll be up very soon. Christmas maybe.

 

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