kenneal - lagger wrote: ↑22 Aug 2022, 19:13
And the BOE will probably be making it worse with interest rate rises pushing up mortgage cost! They're completely disconnected from the real world.
Maybe the BOE made it worse by making interest rates too low in the first place causing the asset boom.
I hear all they do is watch one of the money supply indicators (M3 I think - no not the motorway). Someone in the 1980s likened it to driving your car by only looking at the engine temperature gauge and nothing else.
mr brightside wrote: ↑07 Oct 2022, 06:55
Would it be reasonable to assume that this is the next big step in the decline staircase, and that there will be no 'recovery'?
I don't know whether western governments would attempt price controls. They don't have a great history of actually working.
We must deal with reality or it will deal with us.
mr brightside wrote: ↑07 Oct 2022, 06:55
Would it be reasonable to assume that this is the next big step in the decline staircase, and that there will be no 'recovery'?
It was for the Romans. It finished them off.
They tried price controls, debasing the currency, forcing people to remain on the land, mass immigration, Christianity and then forcing sons to follow the same occupation as their fathers (maybe a social class thing - maybe not).
None worked.
However used car dealers (around here at least) say that the market has crashed, along with prices... nobody is spending anything.
Around me there's actually little to buy in second-hand vehicles if you want a recent one (I would outright refuse to buy a new car, even if I had the money). So few people bought new cars over the last couple of years because of the pandemic, so there's hardly anything coming on the market in the two-to-four-year-olds.
We're actively looking to change our car soon and would prefer a good second-hand EV but…there's none we can afford. Maybe when the subsidies for new EVs finish, prices will drop. But maybe not.
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
Experts have said that the Bank of England will be left with few "easy choices" as the UK economy deteriorates.
Yael Selfin, chief economist at KPMG UK said that a potential new spike in the soaring cost of living could come when the government support on energy bills offered under the Energy Price Guarantee comes to an end in April.
That could put pressure on the Monetary Policy Committee to raise rates even more quickly, she said.
“At the same time, the outlook is riddled by the evolution of energy prices, while the risk of a significant fall in house prices looms in the background."
She said that the UK economy could shrink by more than 2% by the end of next year. Although it would ease pressures pushing prices up, it would see households and businesses face even more difficulties.
The UK's Chancellor Jeremy Hunt has reponded to the Bank of England's decision to raise interest rates.
He said: "Inflation is the enemy and is weighing heavily on families, pensioners and businesses across the country.
"That is why this government’s number one priority is to grip inflation, and today the Bank has taken action in line with their objective to return inflation to target.
Bank warns UK facing longest recession in 100 years
Dearbail Jordan
Business reporter
In its economic forecast that accompanies its rates decision, the Bank of England has warned that the UK is facing its longest recession since the great depression - a century ago.
We must deal with reality or it will deal with us.
