| A question for any economists among us 12:21 - Sep 23 with 4526 views | Keno |
Can you reduce inflation while at the same stimulating growth?
(and with the ghosts of Mr Gosling & Mr Wilcox casting their shadows you dont have to show your workings out) |  |
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| A question for any economists among us on 12:26 - Sep 23 with 2399 views | giant_stow |
Nice question - hope you get some good answers.
I guess the central banks say no, right now, while they increase rates into a recession. |  |
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| A question for any economists among us on 12:30 - Sep 23 with 2375 views | HARRY10 |
there is not much any governmenet can do to stimulate growth.
What it can do is provide the framework for GDP to grow.
That might mean there is enough workers, and the skills they need - the UK has blocked off that source.
Cut down on regulation - the UK has massively increased regulation by leaving the customs union/single market. Exporters have to cope with around 4 million extra forms a week.
The best hope is that the leaking of businesses out of the UK slows down. Nothing announced today suggests that will be the case.
I would suggest anyone who is not aware of the inherent dangers look up Anthony Barbers disastrous 1972 Dash for Growth, and Nigel Lawsons suicidal 1988 budget. Both fore runners of todays lunacy. [Post edited 23 Sep 2022 12:35]
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| A question for any economists among us on 12:35 - Sep 23 with 2351 views | lowhouseblue |
it probably depends on the source of the inflation and how you're going to boost growth. and you also have a further current policy target of boosting disposable incomes. so it's policy tools v. policy targets. you're left with monetary policy targeting inflation by, in theory, loosening the labour market, fiscal policy boosting disposable incomes, and supply side policy doing most of the heavy lifting in, in theory, promoting growth (but only in the medium to long-term). It's reaganomics - huge fiscal deficits combined with high interest rates and radical market liberalisation. it's a policy gamble not seen since the early 80s. |  |
| And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show |
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| A question for any economists among us on 12:38 - Sep 23 with 2340 views | usm |
The energy bailout will apparently reduce inflation by 5% points - so people will have more money to spend than would otherwise have been the case, so theres your answer.
BTW they reckon it takes 2 years for an interest rate change to have any real impact and UK inflation has NEVER been bought under control until interest rates have reached 4.5/5%.
Happy Bloody Days!!! |  |
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| A question for any economists among us on 12:41 - Sep 23 with 2303 views | Keno |
| A question for any economists among us on 12:38 - Sep 23 by usm |
The energy bailout will apparently reduce inflation by 5% points - so people will have more money to spend than would otherwise have been the case, so theres your answer.
BTW they reckon it takes 2 years for an interest rate change to have any real impact and UK inflation has NEVER been bought under control until interest rates have reached 4.5/5%.
Happy Bloody Days!!! |
When I was a boy we had interest rates of 10% plus and when I ask my bank manager how I stood for a loan he said you dont, you have to grovel [Post edited 23 Sep 2022 12:43]
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| A question for any economists among us on 12:42 - Sep 23 with 2290 views | WeWereZombies |
| A question for any economists among us on 12:30 - Sep 23 by HARRY10 |
there is not much any governmenet can do to stimulate growth.
What it can do is provide the framework for GDP to grow.
That might mean there is enough workers, and the skills they need - the UK has blocked off that source.
Cut down on regulation - the UK has massively increased regulation by leaving the customs union/single market. Exporters have to cope with around 4 million extra forms a week.
The best hope is that the leaking of businesses out of the UK slows down. Nothing announced today suggests that will be the case.
I would suggest anyone who is not aware of the inherent dangers look up Anthony Barbers disastrous 1972 Dash for Growth, and Nigel Lawsons suicidal 1988 budget. Both fore runners of todays lunacy. [Post edited 23 Sep 2022 12:35]
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Growing GDP is not the way to go in light of increased global warming, not that I expect doughnut economics to be embraced by the Conservative or Labour parties anytime soon but there will undoubtedly come a time when they have to. |  |
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| A question for any economists among us on 12:45 - Sep 23 with 2277 views | HARRY10 |
| A question for any economists among us on 12:38 - Sep 23 by usm |
The energy bailout will apparently reduce inflation by 5% points - so people will have more money to spend than would otherwise have been the case, so theres your answer.
BTW they reckon it takes 2 years for an interest rate change to have any real impact and UK inflation has NEVER been bought under control until interest rates have reached 4.5/5%.
Happy Bloody Days!!! |
eh
That is standing reality on it's head !
Handing over billions to foreign owned energy companies to maintain artificially high prices ADDS to inflation
Interest change causes almost immediate change, as it alters borrowing (mortgages etc) among other things | | | |
| A question for any economists among us on 12:47 - Sep 23 with 2263 views | HARRY10 |
| A question for any economists among us on 12:42 - Sep 23 by WeWereZombies |
Growing GDP is not the way to go in light of increased global warming, not that I expect doughnut economics to be embraced by the Conservative or Labour parties anytime soon but there will undoubtedly come a time when they have to. |
I don't think I said it was. I merely pointed that as that is this governments idea, those are two of the main variables that need changing. | | | |
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| A question for any economists among us on 12:54 - Sep 23 with 2230 views | SuperKieranMcKenna |
| A question for any economists among us on 12:45 - Sep 23 by HARRY10 |
eh
That is standing reality on it's head !
Handing over billions to foreign owned energy companies to maintain artificially high prices ADDS to inflation
Interest change causes almost immediate change, as it alters borrowing (mortgages etc) among other things |
It will dampen the metrics by which consumer inflation is measured.
EDIT. Energy price inflation was one of the main drivers for UK inflation running higher than most of Europe - they had already brought in government backed schemes to cap prices. Once again we were last to the party. [Post edited 23 Sep 2022 12:57]
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| A question for any economists among us on 12:58 - Sep 23 with 2186 views | HARRY10 |
| A question for any economists among us on 12:54 - Sep 23 by SuperKieranMcKenna |
It will dampen the metrics by which consumer inflation is measured.
EDIT. Energy price inflation was one of the main drivers for UK inflation running higher than most of Europe - they had already brought in government backed schemes to cap prices. Once again we were last to the party. [Post edited 23 Sep 2022 12:57]
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Dear god, it gets worse
How does maintaining artificially high prices damage any 'metrics' ? | | | |
| A question for any economists among us on 13:02 - Sep 23 with 2158 views | lowhouseblue |
| A question for any economists among us on 12:58 - Sep 23 by HARRY10 |
Dear god, it gets worse
How does maintaining artificially high prices damage any 'metrics' ? |
dampen.
price controls hold prices lower, they don't make them 'artificially higher'. | |
| And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show |
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| A question for any economists among us on 13:02 - Sep 23 with 2142 views | BloomBlue |
The current inflation is driven by energy costs as a result of 1) the Ukraine war and 2) demand post Covid. 2, is slowly correcting but the enery price has impacted that, If/when the war stops then in theory inflation will naturally decrease. We've seen the price of oil decrease recently which is a good sign
The problem is if this continues for years as that will result in wage increases which add to inflation as wages will need to be factor into future costs and thus prices.
Short answer is yes you can do both but it's a knife edge approach. |  | | |
| A question for any economists among us on 13:07 - Sep 23 with 2104 views | WeWereZombies |
| A question for any economists among us on 13:02 - Sep 23 by lowhouseblue |
dampen.
price controls hold prices lower, they don't make them 'artificially higher'. |
I think tractorboyjames was referring to energy price caps being paid out of public funds to compensate European energy companies. | |
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| A question for any economists among us on 13:08 - Sep 23 with 2094 views | HARRY10 |
| A question for any economists among us on 13:02 - Sep 23 by lowhouseblue |
dampen.
price controls hold prices lower, they don't make them 'artificially higher'. |
Current energy prices are artificially high because the government is allowing companies to make excess profits.
the comparison is not between what those prices might be and what they will be, but what they were and what they are now.
ie ITFC announce that they will double the price of all season tickets next season, then later state they will only increase the prices by half - is that holding down inflation, of course not | | | |
| A question for any economists among us on 13:11 - Sep 23 with 2086 views | hype313 |
| A question for any economists among us on 12:30 - Sep 23 by HARRY10 |
there is not much any governmenet can do to stimulate growth.
What it can do is provide the framework for GDP to grow.
That might mean there is enough workers, and the skills they need - the UK has blocked off that source.
Cut down on regulation - the UK has massively increased regulation by leaving the customs union/single market. Exporters have to cope with around 4 million extra forms a week.
The best hope is that the leaking of businesses out of the UK slows down. Nothing announced today suggests that will be the case.
I would suggest anyone who is not aware of the inherent dangers look up Anthony Barbers disastrous 1972 Dash for Growth, and Nigel Lawsons suicidal 1988 budget. Both fore runners of todays lunacy. [Post edited 23 Sep 2022 12:35]
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Indeed
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| A question for any economists among us on 13:14 - Sep 23 with 2075 views | SuperKieranMcKenna |
| A question for any economists among us on 13:08 - Sep 23 by HARRY10 |
Current energy prices are artificially high because the government is allowing companies to make excess profits.
the comparison is not between what those prices might be and what they will be, but what they were and what they are now.
ie ITFC announce that they will double the price of all season tickets next season, then later state they will only increase the prices by half - is that holding down inflation, of course not |
You tell those economists Harry!! Did you read the link?
As has been noted extensively before, the natural gas index has quadrupled. So even if the entire profit was nationalised, the market prices have increased 400pc. Government intervention here and in Europe is a damage limitation excercise.
That is why we have huge inflation, but it would be far higher without artificial caps. | | | |
| A question for any economists among us on 13:22 - Sep 23 with 2046 views | ArnoldMoorhen |
A Level Economics- does that count?
It is only possible if another variable changes. So, for example, if a big breakthrough in technology leads to cheaper energy coming on-stream, you would hope to see a non-inflationary growth.
Another example might be a major Free Teade deal which opens up an alternative source of goods. Fortunately Trade Deals are very simple to achieve and we were assured by Rees-Mogg and others that countries would be queueing up to do then with us, so in a couple of months we have that to look forward to. Alternatively, having left the largest Free Trade bloc in the world, which itself had well over 100 trade agreements with other countries in place, we have added to the inflationary pressures by squeezing the flow of goods or adding to the price through import duties.
There is another question as to whether economic growth is always a good thing, and whether there are better metrics of societal progress. Bhutan has opted out of the economic growth model completely, and presents a model of a far more sustainable approach to work-life balance and relationship to the environment.
https://ophi.org.uk/policy/gross-national-happiness-index/#:~:text=It%20shows%20 | | | |
| A question for any economists among us on 13:26 - Sep 23 with 2014 views | HARRY10 |
Without a surplus workforce, any growth inevitably means employers chasing the same workers, whereby wages spiral ever upward without any significant productivity rise.
The UK is already suffering a chronic shortage of workers due in the short term to Brexit, and in the long time to the one constant over the past decade. Tories failure to invest in training.
A short term 'sugar rush' is not something that slows down to a reasonable level, but something that leaves a car crash economy shortly after - as in 1972 and 1988.
Levelling up was always little more than an empty promise. But where are the plans to invest in new forms of energy ? Training ? Restoring the nurses bursaries. Building houses to allow workers to move to where the work is rather than have millions stuck in areas of low grade employment. | | | |
| A question for any economists among us on 13:36 - Sep 23 with 1987 views | HARRY10 |
| A question for any economists among us on 13:14 - Sep 23 by SuperKieranMcKenna |
You tell those economists Harry!! Did you read the link?
As has been noted extensively before, the natural gas index has quadrupled. So even if the entire profit was nationalised, the market prices have increased 400pc. Government intervention here and in Europe is a damage limitation excercise.
That is why we have huge inflation, but it would be far higher without artificial caps. |
That is you arguing against yourself
The question is what is the rate of inflation now, not what it might be.
The price of natural gas is only one cost in energy companies costs. The UK imports relatively little in terms of natural gas. We are about 44% reliant on renewables, so why are we paying the high cost, as with countries whose depedency is far higher ?
Because we are allowing companies to charge almost what they like, hence the excessive profits. | | | |
| A question for any economists among us on 13:41 - Sep 23 with 1980 views | SuperKieranMcKenna |
I have a degree but not much time for a long rambling answer!
My view is that we are heading into a fairly dire global slowdown. There are few economic indicators that suggest room for growth. Personally I don’t think oil and gas prices will ever ‘normalise’ now and it’s essential to ramp up the energy transition with state funded investments - ie not subsidising private investors. We should look to become world leaders for once and sell expertise abroad. My opinion is the best bet to stimulate the economy is to enhance government spending on projects and services. The US stimulus scheme implemented by Biden during the pandemic was very successful in creating economic growth in the US. The problem is of course things like construction have incredibly high rates of inflation because of the cost increases to building materials. With the global economy so interlinked it’s hard to see how that can be avoided.
The strong dollar is also causing a lot of issues not only for the UK and EU but also in Asia. It makes importing more expensive, exasperates commodity prices and increases the cost of any USD demominated borrowing. There will be a benefit however to the FTSE 100 firms who earn most of their income in dollars.
The last point I’d make is rejoining the single market would help significantly, what we have is not a free trade deal as it was sold as. That doesn’t appear to be on the table by either of the parties that could feasibly elected. | | | |
| A question for any economists among us on 13:44 - Sep 23 with 1974 views | baxterbasics |
Sure there are immediate problems ie Russia and post-covid blues driving inflation. But surely there's an elephant in the room here that nobody is talking about, driving inflation long term - the massive borrowing and then printing of money by governments throughout the developed world. This is still considered inflationary right? The US and UK in particular have been at it like the clappers since at least 2009. Nobody seems to be talking about this though and todays announcements will not be helping.
My tip: Buy precious metals and bitcoin.*
*I am not a financial advisor, do your own research. |  |
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| A question for any economists among us on 13:47 - Sep 23 with 1960 views | Lord_Lucan |
The biggest way to combat inflation is to get the £ back up to > 1.50
We paid at 1.11 yesterday - if it continues as it is we will rise our prices by 20%
Coupled with freight profiteering these are the two big reasons for UK current disaster. Energy will add to the problem but it hasn't really kicked in yet.
My analysis is that we are screwed for 5 years. |  |
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| A question for any economists among us on 13:49 - Sep 23 with 1943 views | BanksterDebtSlave |
| A question for any economists among us on 13:44 - Sep 23 by baxterbasics |
Sure there are immediate problems ie Russia and post-covid blues driving inflation. But surely there's an elephant in the room here that nobody is talking about, driving inflation long term - the massive borrowing and then printing of money by governments throughout the developed world. This is still considered inflationary right? The US and UK in particular have been at it like the clappers since at least 2009. Nobody seems to be talking about this though and todays announcements will not be helping.
My tip: Buy precious metals and bitcoin.*
*I am not a financial advisor, do your own research. |
You forgot beanz and gunz! |  |
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| A question for any economists among us on 13:52 - Sep 23 with 1928 views | Guthrum |
| A question for any economists among us on 13:41 - Sep 23 by SuperKieranMcKenna |
I have a degree but not much time for a long rambling answer!
My view is that we are heading into a fairly dire global slowdown. There are few economic indicators that suggest room for growth. Personally I don’t think oil and gas prices will ever ‘normalise’ now and it’s essential to ramp up the energy transition with state funded investments - ie not subsidising private investors. We should look to become world leaders for once and sell expertise abroad. My opinion is the best bet to stimulate the economy is to enhance government spending on projects and services. The US stimulus scheme implemented by Biden during the pandemic was very successful in creating economic growth in the US. The problem is of course things like construction have incredibly high rates of inflation because of the cost increases to building materials. With the global economy so interlinked it’s hard to see how that can be avoided.
The strong dollar is also causing a lot of issues not only for the UK and EU but also in Asia. It makes importing more expensive, exasperates commodity prices and increases the cost of any USD demominated borrowing. There will be a benefit however to the FTSE 100 firms who earn most of their income in dollars.
The last point I’d make is rejoining the single market would help significantly, what we have is not a free trade deal as it was sold as. That doesn’t appear to be on the table by either of the parties that could feasibly elected. |
'Personally I don’t think oil and gas prices will ever ‘normalise’ now'
As, indeed, they didn't return to the consistently low prices which existed prior the oil crisis of the 1970s. Which were founded upon (quasi-)colonial exploitation by Western consuming powers of oil rich parts of the world (most notably the Middle East). |  |
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