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It’s supposed to go down and reset expectations. Instead the central banker goes on TV asking people to not request pay rises, which is equivalent to saying “th
by mmarq 4y ago
It’s supposed to go down and reset expectations. Instead the central banker goes on TV asking people to not request pay rises, which is equivalent to saying “the situation is totally out of control, the CB can’t and won’t do anything”. Which prompts everybody to ask for a pay rise because the central banker just told them to revise their inflation expectations upwards (hence strikes). Then he pretends to raise interest rates (he can’t really because it would upset Johnson’s main constituency) and nothing happens, apart from inflation going up. That was a majestic show of incompetence. Not the first one from the current breed of the British Conservative party, that appointed him.
It’s not by chance that countries like Italy and Germany, that are way more reliant on gas than the UK, have a much lower inflation and still an almost normal core inflation. They have a central bank that, Lagarde aside, is not a clownish shitshow.
It should be said that much of current inflation is due to the disruption of the British supply chains that was caused by Brexit. Short of re-joining the EU, that I’d vote against because we must stop putting up with the antics of the Englishman, the only way out I see, as a rando with some interest in economics, is a 1980-style recession.
- mytailorisrich 4y ago> It should be said that much of current inflation is due to the disruption of the British supply chains that was caused by Brexit. Not really: "Euro area annual inflation was 8.1 % in May 2022, up from 7.4 % in April 2022" [1], and of course it is, I believe, also 8.5-9% in the US. [1] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Inflation_in_the_euro_area https://ec.europa.eu/eurostat/statistics-explained/index.php...
- mmarq 4y agoEurozone inflation: 8.1 UK inflation: 9.1 Eurozone core inflation: 3.8 UK core inflation: 5.9 Where would the price level increase caused by a labour shortage end up: core or non-core inflation? Besides the UK started having a significant inflation differential with the eurozone since mid 2016. https://www.newstatesman.com/business/2022/06/uk-inflation-brexit-blame-cost-economy https://www.newstatesman.com/business/2022/06/uk-inflation-b... You are welcome
- mytailorisrich 4y agoYou are not explaining your rather bold claim that "most of UK inflation" is due to Brexit... Also note that the UK and the Eurozone obviously have different currencies. At the moment we see a small difference in inflation rates, and?
- mmarq 4y ago- 2% in core inflation is not a small difference. It’s the average British worker losing 700£ a year more than the European - of course they have different currencies, that’s exactly what we are talking about, and also different governments. One busy sabotaging its supply chains and the other doing whatever - the UK has been having much more severe shortages than the rest of Europe (empty petrol stations everywhere bar NI?), that are having an impact on prices > You are not explaining your rather bold claim that "most of UK inflation" is due to Brexit... You are right, I should have said “much of the core inflation differential with the EU is due to Brexit” You are welcome
- dazc 4y ago> 'It should be said that much of current inflation is due to the disruption of the British supply chains that was caused by Brexit.' I work with a UK retailer and, from what I see, supply chain disruption is 99% China. And, the Northern Ireland issue is currently a convenient excuse to refuse to supply since it was always economically unviable for large items anyways.