4 ms·

"We might hit a +10% on food price (and gaz) in a near future. It might get harsh[er] for big families and low income jobs, it's fine for people with good salar

"We might hit a +10% on food price (and gaz) in a near future. It might get harsh[er] for big families and low income jobs, it's fine for people with good salaries." However, those people with good salaries whilst seeing inflation running at 10% will likely not see a wage increase to match. And they may also have just bought a house... At the same time as 10% inflation, the BoE may eventually have to raise interest rates to try curb capital flight from Sterling and make it attractive again. Higher interest rates & stagnant wages lead to people not being able to keep up with mortgage payments (which have just increased and so has everything else but their wage). This leads to defaults on mortgages at the same time as house prices are falling because people cannot service such large mortgages at 10% interest. That will hurt a lot of people with good salaries in the short term.

usgroup 10y ago
It's decent analysis. Remember though that a huge QE programme is currently on the way and the UK has large foreign FX reserves. So prior to moving interest rates it's likely the latter will be used to reduce supply of the pound and increase demand. There's a lot they can do to keep the currency stable which is not to say that it won't go lower than its current level. Popular speculation suggests a rate cut in November against market odds or a cut in December...
pjc50 10y ago
10% on food and fuel is not the same as 10% inflation overall, though. Rates are likely to remain low, no more than 1-2%. A bit of wage inflation coming through would be good but unlikely. I wouldn't panic just yet. There's still time for the financial services industry to get the message through to their friends in the conservative party that this is a bad idea.
- usgroup 10y ago
  As in over-turn the verdict? Yes, I wait with abated breath to see how the court will rule RE article 50 invocation, but thereafter there will be a deal within 2 years, whether we'd like it or not...
  - pjc50 10y ago
    Article 50 has not yet been triggered, and if the court case concludes that Parliamentary consent is required or the other court case concludes that it would contravene the Good Friday Agreement, then it probably won't be. The referendum itself is not binding.

usgroup 10y ago

It's decent analysis. Remember though that a huge QE programme is currently on the way and the UK has large foreign FX reserves. So prior to moving interest rates it's likely the latter will be used to reduce supply of the pound and increase demand. There's a lot they can do to keep the currency stable which is not to say that it won't go lower than its current level. Popular speculation suggests a rate cut in November against market odds or a cut in December...

pjc50 10y ago

10% on food and fuel is not the same as 10% inflation overall, though. Rates are likely to remain low, no more than 1-2%. A bit of wage inflation coming through would be good but unlikely. I wouldn't panic just yet. There's still time for the financial services industry to get the message through to their friends in the conservative party that this is a bad idea.

usgroup 10y ago
As in over-turn the verdict? Yes, I wait with abated breath to see how the court will rule RE article 50 invocation, but thereafter there will be a deal within 2 years, whether we'd like it or not...
- pjc50 10y ago
  Article 50 has not yet been triggered, and if the court case concludes that Parliamentary consent is required or the other court case concludes that it would contravene the Good Friday Agreement, then it probably won't be. The referendum itself is not binding.