Inflation at 3%

[clv101]

Funny, you should ask them how this situation with "recitify itself"!

What product was this for?

[biffvernon]

What product was this for?

Glazing tape.

And today from the Royal Institute of Chartered Surveyors we read this:

The rising costs of transport and raw materials and a shortage of tradesmen is pushing up the costs of home improvements, according to new figures by RICS? Building Cost Information Service (BCIS).


BCIS? updated Property Makeover Price Guide, launched today (03 June 2008), gives homeowners an accurate guide to what they should expect to pay for home improvements. It has found the average cost of improvement work has risen by 20 percent over the past two years for a number of reasons.


No longer can homeowners pick and choose from the glut of quality EU tradesmen as the number of central and eastern European nationals returning to their native countries is on the rise. With half of the estimated one million British based Poles having already left the UK, competition for labour is pushing up costs.


The upward trend in oil prices is continuing to fuel the rising cost of transport, with forecasters predicting oil to rise to $200 US (?100) per barrel in the next few years, some experts are predicting this to have more impact on economies than the current credit crunch crisis.


Global demand for raw materials remains at an all time high, with emerging giants such as China and India showing no signs of a slowdown, commodity prices will remain high for years to come. This is no more evident than in the various trades where the cost of materials have pushed up the overall costs. For example, roofing costs have risen by 26%, plumbing and electric work by 22% and painting has risen by 17%, all outstripping inflation over the past two years.

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[Eternal Sunshine]

The upward trend in oil prices is continuing to fuel the rising cost of transport, with forecasters predicting oil to rise to $200 US (?100) per barrel in the next few years, some experts are predicting this to have more impact on economies than the current credit crunch crisis.

This is only the beginning....

[RenewableCandy]

Ladies and gentlemen, I can announce with confidence that THE RECESSION IS HERE...

for 8 months we couldn't get a builder to repair a garden wall that someone, erm, inadvertantly trashed . I began to use the wall as a sort of bellweather: if ever anyone had time to squeeze in the job of fixing it, then I'd know that builders were feeling the pinch, and the recession was starting.

People would:

not turn up to price up the work
not send estimates, having turned up, or
not commit to a date (or indeed commit and then not show up) and most infuriating:
not answer the 'phone.

Until last week, when someone finally put it all right (and for about 1/3 the price of one of our first estimates!)

Hmm this gives a negative rate of inflation...but I'm sure no-one from ONS has been talking to our builder

[Moadib]

I just got this e-mail from one of my suppliers - it doesn't mention 3%.

For the attention of the Purchasing Department.

Dear Sirs,

As you may be aware, much of our raw material is imported from Europe. Over the last 6 months there has been a significant fall in the Euro / pound exchange rate and this has caused a rise in the cost of our raw materials.

The Euro is now around 1.25 which is an approxiamte increase of 14% over the last 6 months. We hope that this will recitify itself, but until it does so, unfortunately we are going to have to act now.

Instead of putting a price increase on products, from 1st June 2008 we are going to add an 8% ? / ? surcharge onto all invoices. This will be a temporary measure and as soon as there is significant improvement in the exchange rate, we will remove this surcharge.

It is unfortunate that we have to do this, but we see no alternative option during this unstable economic climate, as I am sure you will appreciate.

I'd be interested to see their reaction when you advise them that you cannot absorb such an increase, and although it's unfortunate you need to do so, you are switching suppliers to _____ (insert location of more efficient manufacturing location).

Inflation happens when the money is created. After that it's a game of musical chairs to see who ends up paying for it.

[biffvernon]

Nice idea but they are still the cheapest I know of.

[Neily at the peak]

Inflation happens when the money is created. After that it's a game of musical chairs to see who ends up paying for it.

That's what I thought till now, so who is printing the money HMG?


Neil

[biffvernon]

Inflation at 3%? So what's all this?

UK producer prices rose at a record pace in May, official figures show.

Prices jumped by 8.9% from the same month a year earlier, the Office for National Statistics said. Input prices also shot up, 27.6% higher on the year.

The quickest growth since records began in 1986, it was driven by higher food, scrap metal and energy costs.

The data was much worse than analysts had expected, and came amid signs that the UK's economic growth is slowing and consumer confidence is crumbling.

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[oilslick]

Inflation happens when the money is created. After that it's a game of musical chairs to see who ends up paying for it.

That's what I thought till now, so who is printing the money HMG?


Neil

The money's been printed for the last few years in all those dodgy loans pumping up houses, companies etc. Some of it will evaporate and hurt the banks but a lot of it move to something else. Like oil, food, whatever...as it's no longer boom time, it will probably just move to all the things people can't do without. Makes perferct sense, Wall Street still want their bonuses even if nobody wants to buy worthless bundles of loans so the money has to come from the things everyone has to have.

No stopping it now so sit back and hopefully not get blown away by it all.

[Moadib]

Inflation happens when the money is created. After that it's a game of musical chairs to see who ends up paying for it.

That's what I thought till now, so who is printing the money HMG?


Neil

Absolutely. There is currently a "war" between the 'flations. Massive deflations as the SIVs, CDO, CDSs etc unwind evaporating all the "money" (debt) that created them, and the inflation which is hoped to be equally massive and replace them.

The only difference is that for the past few years the inflation has been the benevolent kind that we liked, with money flowing into houses, the stock market, private equity, and all the frankensteins of financial industry, making people feel rich Now that bubble has burst, and cannot be re-inflated - the inflation has become the kind we hate, flowing into oil, wheat, metals and the like, making us feel poorer (well, most of us anyway).

Which will win? Whatever the rhetoric, the banks and HMG will ALWAYS be supporting inflation. Inflation benefits debtors - who are the biggest debtors? Our governments. Who benefits from the money creation? Banks. There will be short term blips, but long term that is the pattern