Steve
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Post by Steve on May 21, 2024 10:20:29 GMT
If they (actually the BoE controls this) lowered interest rates the £ would immediately fall causing inflation which would hurt the poorest most. Worse the government wouldn't be able to raise money to cover the deficit so would have to make immediate expenditure cuts which again would hurt the poorest most. Government spend to stimulate economy packages have a very poor track record. Best to give economic stability which provides an environment in which private investors will invest to create jobs and taxable revenue. I didn't see any significant increase in the pounds value as interest rates rose in 2023. The idea that inward investment depends on interest rates is mistaken. Investors want a strong economy with a good customer base. Inflation is normally an indication of a strong economy, but not on this occasion. Raising interest rates to stop inflation caused by foreign fuel prices is counter intuitive. You're wrong on both points Interest rates rose to protect the £ and to enable inward investment in the UK
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Post by Orac on May 21, 2024 11:17:08 GMT
We have lowering specific productivity - which means this 'offset aging population' thing is really not happening, This is not surprising considering the number of new arrivals who are delivering food, selling vapes or crowding out public services to the point of unusability.. We would be far better of with a reduced population that isn't over-crowded. This would correct quickly as reproduction fashions and the economics of family change.. The only thing that importing 'unskilled labour' achieves is to reduce wages and increase the relative power of the state vs the individual. It also makes sensible social policy impossible We are both against further immigration, but we must address the need for more tax money each year. As you see below we are spending a huge amount of our NHS budget on the over 80's And more that 25% of the population is retired not working. 14% children. 4% with disabilities That leaves only 57% available to work. If we stop immigration without taking appropriate action we will quickly see a huge gap grow between tax take and the costs shown above. And my point is that filling the country with unskilled people is not a solution because it will increase the tax take and the burden. when you are in a hole, the first thing you need to do is stop digging.
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Post by Zany on May 21, 2024 11:35:30 GMT
I didn't see any significant increase in the pounds value as interest rates rose in 2023. The idea that inward investment depends on interest rates is mistaken. Investors want a strong economy with a good customer base. Inflation is normally an indication of a strong economy, but not on this occasion. Raising interest rates to stop inflation caused by foreign fuel prices is counter intuitive. You're wrong on both points Interest rates rose to protect the £ and to enable inward investment in the UK We disagree. Interest rates rose to lower wage inflation. Wage inflation caused by fuel price inflation. Had the government raised taxes instead they could have better spread the load across the population and used the money to offset the cost of electricity and suppress demand for wage increases.
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Steve
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Post by Steve on May 21, 2024 11:45:36 GMT
You're wrong on both points Interest rates rose to protect the £ and to enable inward investment in the UK We disagree. Interest rates rose to lower wage inflation. Wage inflation caused by fuel price inflation. Had the government raised taxes instead they could have better spread the load across the population and used the money to offset the cost of electricity and suppress demand for wage increases. You're arguing for a tax high subsidise high economy. They never work and would destroy every trade agreement we have.
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Steve
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Post by Steve on May 21, 2024 11:46:30 GMT
We are both against further immigration, but we must address the need for more tax money each year. As you see below we are spending a huge amount of our NHS budget on the over 80's And more that 25% of the population is retired not working. 14% children. 4% with disabilities That leaves only 57% available to work. If we stop immigration without taking appropriate action we will quickly see a huge gap grow between tax take and the costs shown above. And my point is that filling the country with unskilled people is not a solution because it will increase the tax take and the burden. when you are in a hole, the first thing you need to do is stop digging. What is this supposed policy of 'filling the country with unskilled people' of which you speak? I can't see it.
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Post by Zany on May 21, 2024 12:11:04 GMT
We disagree. Interest rates rose to lower wage inflation. Wage inflation caused by fuel price inflation. Had the government raised taxes instead they could have better spread the load across the population and used the money to offset the cost of electricity and suppress demand for wage increases. You're arguing for a tax high subsidise high economy. They never work and would destroy every trade agreement we have. In an extreme case caused by a war.
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Steve
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Post by Steve on May 21, 2024 12:13:55 GMT
No subsidies are generally not allowed under trade agreements in peace time or war
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Post by Zany on May 21, 2024 12:17:46 GMT
No subsidies are generally not allowed under trade agreements in peace time or war The government already capped electricity prices without any qualms. No one destroys a trade agreement for an emergency.
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Steve
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Post by Steve on May 22, 2024 9:02:48 GMT
That 2022 energy cap was very problematic, would be hard to repeat. The energy companies might sue and the government couldn't afford it
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Post by Zany on May 22, 2024 10:52:58 GMT
That 2022 energy cap was very problematic, would be hard to repeat. The energy companies might sue and the government couldn't afford it My suggestion was that the energy companies got their money but that it was subsidised by a tax increase. This would better level out the pain, but more importantly would have headed off the strong wage inflation caused by those higher personal bills. Basically a false inflation was turned into real inflation by government inaction. But then with these Tories any chance to stick up interest rates and line some pockets was always to be taken when approaching an election they will lose.
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Steve
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Post by Steve on May 22, 2024 17:02:56 GMT
There was no 'wage inflation caused by higher bills'. The wage inflation we saw was caused by the post Brexit and Covid vacancies boom. Companies are not charities (nor should they be) and (NMW aside) they only pay higher when they need to for recruit and retain purposes. tradingeconomics.com/united-kingdom/job-vacancies Vacancies have been steadily falling for 2 years now so the pressure for higher wages will be waning
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Post by Zany on May 22, 2024 17:26:11 GMT
There was no 'wage inflation caused by higher bills'. The wage inflation we saw was caused by the post Brexit and Covid vacancies boom. Companies are not charities (nor should they be) and (NMW aside) they only pay higher when they need to for recruit and retain purposes. tradingeconomics.com/united-kingdom/job-vacancies Vacancies have been steadily falling for 2 years now so the pressure for higher wages will be waning Yes but its still happened. It doesn't disappear because that was yesterday, Business is paying 14% more in wages while at the same time facing falls in sales of around 20% Those wages don't go back down. That's why wage inflation is so dangerous and why it would have been better to hold down energy prices and mortgage rates by increasing tax instead and using the tax to subsidise electricity.
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Post by AvonCalling on May 22, 2024 17:52:09 GMT
So Steve why do you think vacancies have been steadily falling for the last two years?
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Post by patman post on May 22, 2024 18:15:18 GMT
So Steve why do you think vacancies have been steadily falling for the last two years? There’s 651 just been added to the total…
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Post by Zany on May 22, 2024 18:44:49 GMT
The problem with wage inflation is that it never reverses. If gas prices rise by 10% for a year the price inflates by 10% for a year. If the price falls by 10% it deflates again. That's how the market works for all products. Its only wages that never deflate. Try telling your staff that their household bills have fallen by 10% so your cutting their wages by 6%. See how you get on
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