The Lemon Fool

CliffEdge wrote:
Of course, I realise that many of you didn't live through the corrosion of inflation that the (Sick Man of Europe) UK suffered during the 1970s that was only truly banished by joining the EEC.

As I recall it, the UK joined the EEC on 1st January 1973. Inflation peaked in 1975, which is a couple of years AFTER we joined.

Alaric wrote:

CliffEdge wrote:
Of course, I realise that many of you didn't live through the corrosion of inflation that the (Sick Man of Europe) UK suffered during the 1970s that was only truly banished by joining the EEC.

As I recall it, the UK joined the EEC on 1st January 1973. Inflation peaked in 1975, which is a couple of years AFTER we joined.

My recollection is that Ted Heath took us in. Harold Wilson has a referendum to confirm that decision. It took Maggie Thatcher to drive our recovery to financial health.

TJH

Alaric wrote:

CliffEdge wrote:
Of course, I realise that many of you didn't live through the corrosion of inflation that the (Sick Man of Europe) UK suffered during the 1970s that was only truly banished by joining the EEC.

As I recall it, the UK joined the EEC on 1st January 1973. Inflation peaked in 1975, which is a couple of years AFTER we joined.

And had we not joined?

GrahamPlatt wrote:

Alaric wrote:
As I recall it, the UK joined the EEC on 1st January 1973. Inflation peaked in 1975, which is a couple of years AFTER we joined.

And had we not joined?

In both cases, the 1970s and now, the high rates of general inflation were caused by hikes in the oil (and gas this time too). And what causes shocks in fossil fuel prices? Sometimes it's cartels like OPEC cornering the market, sometimes it's government intervention like the Russian sanctions. In both cases it's not the free market forces, more like a market failure brought on by government interference in the markets.

MuddyBoots wrote:

GrahamPlatt wrote:
And had we not joined?

In both cases, the 1970s and now, the high rates of general inflation were caused by hikes in the oil (and gas this time too). And what causes shocks in fossil fuel prices? Sometimes it's cartels like OPEC cornering the market, sometimes it's government intervention like the Russian sanctions. In both cases it's not the free market forces, more like a market failure brought on by government interference in the markets.

It is always convenient and politically expedient to blame the OPEC cartel for the stagflation of the 1970s, but it ultimately could not have happened as it did without loose monetary policies supporting the guns and butter post-war economy before it.

In nearly all cases of inflation the money supply changes far more than the quantity of goods and services being produced.. therefore the largest blame should be laid at the door of those tasked with controlling the supply of money and credit.

Houthi rebels taking potshots at passing commercial shipping may add to inflation woes - says many bored hacks sitting nursing post festive break headaches.

Houthi rebels? F****** Houthi rebels derailing the economic recovery?

Aye, right. Send in the horse. Full attack.

Annualised grocery inflation in rapid decline, 9.1% to 6.7% Nov to Dec.

https://www.ft.com/content/9272a5af-607 ... 862dbef5d4

IMO Inflation is yesterdays's story. By the end of the summer the worries about recession and employment will be much greater.

FT article on what comes next

https://www.ft.com/content/ed27477e-ba2 ... 8986f9cfcf

vand wrote:Annualised grocery inflation in rapid decline, 9.1% to 6.7% Nov to Dec.

https://www.ft.com/content/9272a5af-607 ... 862dbef5d4

IMO Inflation is yesterdays's story. By the end of the summer the worries about recession and employment will be much greater.

....which pretty much ties in with what the FT is saying.

A couple of thoughts spring to mind

The inflation really was transitory.....

Central bank actions probably contributed to the inflation.

We have yet to see the full effects of the interest rate rises.

Tedx wrote:Central bank actions probably contributed to the inflation.
[...]

https://www.taxresearch.org.uk/.../

You're getting your economic ideas from Murphy? That figures.

GS

GoSeigen wrote:

Tedx wrote:Central bank actions probably contributed to the inflation.
[...]

https://www.taxresearch.org.uk/.../

You're getting your economic ideas from Murphy? That figures.

GS

Should I get them from you?

Tedx wrote:

GoSeigen wrote:
You're getting your economic ideas from Murphy? That figures.

GS

Should I get them from you?

The guy has literally a large mistake in his first sentence!

Tedx wrote:

GoSeigen wrote:
You're getting your economic ideas from Murphy? That figures.

GS

Should I get them from you?

No. That would show unambiguously poor judgement.


GS

Looking at
https://www.ons.gov.uk/economy/inflatio ... vember2023

There has been virtually zero change in the CPI over the last 6 months

Jun 0.1
Jul -0.4
Aug 0.3
Sep 0.5
Oct 0.0
Nov -0.2

Total 0.3

0.3% arithmetic total over 6 months
As the 6 months before that roll out of of the annualised numbers we'll see CPI below 2% before April, I would guess

UK December 23 CPI will be released tomorrow

Dec-22 figure of +0.4% will roll off the annualised figure, so unless the Dec-23 number is the same or higher then the annualised rate should see further moderation

https://tradingeconomics.com/united-kin ... lation-cpi

2024-01-17 07:00 AM Dec 3.9%.......3.8%......3.8% (Previous...... Concencus.....Forecast)

Tedx wrote:https://tradingeconomics.com/united-kingdom/inflation-cpi
2024-01-17 07:00 AM Dec 3.9%.......3.8%......3.8% (Previous...... Concencus.....Forecast)

I bet there's some arithmetic going on in the Treasury, the cost of boffing the Houthis to prevent a hike in inflation, vs the cost of index-linked govt debt...

V8

Up a tad to 4% (unexpectedly).