Just accept being poorer, says BOE…

I said this yesterday to a mate in the car. "Welcome to the 50's" .

The Mogg types have got thier way :(.

Unable to deliver the Levelling Up agenda, the Tories have got Plan B over the line. Except I think we all know levelling up was never going to be delivered, ever.

relatively easy to argue and accept when there's an 'er' on the end. Hunker down and in time it'll pass......

The problem is that for far too many that 'er' won't be there and they are being dragged back into being poor full stop. Choices between heating and eating, etc.

Who knew voting to impose sanctions on yourself and putting a shower of shit in charge would end up like this.

https://twitter.com/sgfmann/status/1650972875225014274?t=8LH6TYlJ0Vpq_7DY2r2hpw&s=19

The Daily Mail has gone into apoplectic rage over this in spite of pushing so hard for Brexit in the first place and also consistently vilifying trade unions pushing for pay rises.

It's all so depressingly predictable.

He's not wrong - lets just hope that the Lib Dems and maybe Labour paint, in vivid detail the exact reasons why and whom is to blame.

Given that in the 50s my working class parents got a 25-year mortgage on a new build semi that left enough over to run a car, pay for the new mod cons and afford holidays despite my mother giving up work when I was born I think you've chosen the wrong decade to compare with.

Given that in the 50s my working class parents got a 25-year mortgage on a new build semi that left enough over to run a car, pay for the new mod cons and afford holidays despite my mother giving up work when I was born I think you’ve chosen the wrong decade to compare with.

The 60's for my folks, but the same outcome.

Anyone reading this, if you've voted Tory ever and especially the last decade take responsibility, this is YOUR doing and I hope it's you that's impacted personally.

Next? Losing access to free-at-point-of-use healthcare, but, pretty sure as a 'sop' they'll bring in Capital Punishment for you - my prediction for the 2024 Tory Manifesto BTW.

think you’ve chosen the wrong decade to compare with.

Maybe, I grew up in the 70's with my parents having 4 jobs between them, a double digit % mortgage and a series of virtual non runners as family cars to get us to Tesco's once a fortnight. School summer hols was the freedom of playing in the street, my first bike at 14yo was a lucky find in a jumble sale which my grandad fixed up.

Its not that bad... yet.

Next? Losing access to free-at-point-of-use healthcare, but, pretty sure as a ‘sop’ they’ll bring in Capital Punishment for you

It's already been suggested that people could/should be charged for GP appointments or, the flipside of that, charged if they miss GP appointments.

Not come to anything yet but the seed has certainly been sown under the guise of "relieving the pressure on the NHS".

And you can tell the Suella Braverman would be all in favour of capital punishment!
That horrible Tory yob Gullis would probably volunteer to be hangman.

The problem is that for far too many that ‘er’ won’t be there and they are being dragged back into being poor full stop. Choices between heating and eating, etc.

This is the true story.
If I cannot afford a bigger house, nicer car or a foreign holiday, well meh, so what really.
The family down the road who are struggling to make ends meet on a couple of minimum wage jobs, it is going to be brutal. The in-work poverty levels are going to accelerate. 🙁

The inane stupidity of this remark (as discussed in the MMT thread.)

Can be summarised: "The BoE are adding to the price of money yet seek to blame everyone else for demanding more money because the BoE made money more expensive."

This is monetarism solving your problems folks - and an example of why the BoE being at arms length is not good for us.

No political party will push back on this.

I watched Children of Men again on Sunday (it's on the iPlayer for another week). Infertility mcguffin aside, it struck me how horribly prescient much of it seems now.

He’s not wrong – lets just hope that the Lib Dems and maybe Labour paint, in vivid detail the exact reasons why and whom is to blame

Nope. They're both are high on the BoE's response.

Huw Pill is on the best part of 200,000.

Take your ****ing medicine.

The middle classes are being lined up to have the same done to them as the working classes did in the 80’s and 90’s

Those at the top aren’t sharing any of the pain. They’re doing quite nicely out of it all, as usual, and corporations are enjoying unhindered profiteering at everyone else’s expense

Those at the bottom are truly ****ed. we have a government who don’t see why the poor should be provided with even a Dickensian level of existence

MattOAA nails it. Lots can handle being poorer. Those on lower incomes can't.

I watched Children of Men again on Sunday (it’s on the iPlayer for another week). Infertility mcguffin aside, it struck me how horribly prescient much of it seems now.

Is Mad Max Fury Road shortly after?

'Cos it looks like that around here now.

MattOAA nails it. Lots can handle being poorer. Those on lower incomes can’t

A constant point - there's just enough people that have done okay out of Neoliberal policies to keep this current system going.

For the time-being.

The middle classes are being lined up to have the same done to them as the working classes did in the 80’s and 90’s

For sure.

And there's no party currently offering a way to correct this.

Nope. They’re both are high on the BoE’s response.

What?

Huw Pill is on the best part of 200,000.

Again - so what? What he said was as much about (if not more) businesses as about individuals. He was talking about the continuing spiral of inflation. He was saying the profits should be lower, because they can't pass on all cost increases to the consumer because they're demanding higher wages, which in turn increases costs, which they then have to pass onto the consumer...

His wage is a distraction from his position and experience in the matters at hand.

The reasons for why we entered this spiral weren't explicitly stated (probably for good reason), but the results are evident. Energy prices will decrease (they should've already if it weren't for our backward system), food prices might not, unless businesses decrease profits, but almost certainly ALL other price increases will remain unless someone calls out the substantial profits that some people/businesses will be making at the end of this cycle.

Cheap money has masked the fact that as a population we've been getting steadily less well off compared to peers in countries we may have compared ourselves to previously such as Germany, France, Canada or Australia over the last 10 years. Now the music's stopped and cheap credit is being pulled the frogs are starting to think the water is getting a bit warm.

Again – so what? What he said was as much about (if not more) businesses as about individuals. He was talking about the continuing spiral of inflation. He was saying the profits should be lower, because they can’t pass on all cost increases to the consumer because they’re demanding higher wages, which in turn increases costs, which they then have to pass onto the consumer…

Sigh.

He said 'workers' asking for higher wages specifically.

And most importantly if he's speaking in defence of the BoE - and wanting inflation to come down why have the BoE raised the price of money 11 times?

Simple fact - wages lag the cost of living. Why do workers bear the brunt of policy decisions?

The man's an out of touch economically illiterate idiot.

The reasons for why we entered this spiral weren’t explicitly stated (probably for good reason), but the results are evident. Energy prices will decrease (they should’ve already if it weren’t for our backward system), food prices might not, unless businesses decrease profits, but almost certainly ALL other price increases will remain unless someone calls out the substantial profits that some people/businesses will be making at the end of this cycle.

So again, if that's the case they why are the BoE making people poorer by increasing the price level of money?

Such a silly take.

And there is no 'we' in a 200,000 wage.

Cheap money has masked the fact that as a population we’ve been getting steadily less well off compared to peers

If you're talking about low interest rates that's been a feature of our economy and has been encouraged.

The government seem to be banking on the fact that inflation will fall and all will be forgiven (I'm not even sure it will- brexit & war in Ukraine aren't going away anytime soon, it might even kick off in Taiwan, Sudan is looking to create a surge in refugees & fighting there has overspilled before)

But the damage being done here now will be long lasting, children growing up in poverty are affected for life
Debt is being racked up that won't be paid off soon and are high interest rates here to stay?

https://www.bbc.co.uk/news/business-64235996

Have to say I agree, with all the unavoidable cost increases due to external factors, then raising base rates to add to the misery seems the wrong approach. Its like sticking the knife in when people are already on their knees.

What did BOE give its staff as a payrise this year? Can't find the article but I think I read an average of 7%. I'll be lucky for 3% (been 1-2% in the last 5 years) so as far as I'm concerned I'm already taking one for the team.

Mates in the financial industry are doing ok, not inflation based rises, but close. Several seem to have been promoted to new job titles with extra pay but are infact doing the same role, otherwise competitors poach the staff with big pay increases. Seems its mostly the public sector thats expected to 'accept being poor'

Basically the BoE have got it all back to front and looking for someone to blame.

Truth is inflation is a blend of factors. And the BoE have only one tool and need to protect their decisions.

This was primarily a supply side inflation problem. The remit of monetarism is to encourage unemployment by increasing interest rates. To slow the economy and hope for the best. Trouble is you pass income to asset holders which can stoke inflation and effectively tax people who borrow. No secret who it benefits.

Does this seem a fair and rational approach to the failure of policy?

The burden of lowering inflation is being passed to the poorest. Shafted by austerity or low wages.

Time for it to stop.

I thought social classes had all but disappeared a long time ago. I don't think they're coming back either.
We might collectively be a little poorer but we're still doing very well overall.

Plenty of work for those who want it, which is the main thing.

I can't believe people still use that German PCP stereotype. Usually only used by green eyed monster type or terminally bitter snobs and reverse snobs alike.

Nicky Campbell with Richard Murphy on 5live now.

Basically the BoE have got it all back to front and looking for someone to blame.

It's got very little if anything to do with the BoE - and their remit is entirely defined by the Govt anyway.

But Tories gonna Tory, and the cult members aka useful idiots will find someone else to blame.

It’s got very little if anything to do with the BoE – and their remit is entirely defined by the Govt anyway.

That is true.

But they have a choice not to raise rates or cut rates.

The BoE are an agent of government. So yep they're one and the same in my book as they're unlikely to deviate from the way the government expects them too.

2% set by government.

Already accepted it.

Doesn't mean I'm happy about it, or the causes (mentioned repeatedly above).

If the cost of stuff sold was 95% salary costs then the theory might stack up, but its not, it can't be over 10-20% max (in terms of the UK labour force contribution to goods on the shelves). Inflation is measured in terms of real goods, and so if you add 10% to the salary base, real goods prices should only go up by around 1-2%. If you then add another 2% to the salary base to compensate, then its 0.2% and so on.

Wage inflation has very little to do with the price of stuff on which inflation figures are based, and so trying to use one as a lever to fix the other is pointless.

No, the BofE are not an agent of government, and you might want to reflect that if they were more tied to government things might be a lot worse. They're not responsible for austerity, other policies of deliberate underinvestment that have led to reduced productivity, Brexit and 10 years of economic policy and mismanagement that have led to this conclusion.

And bluntly , yes, the UK is poorer as a result of what people voted for and the government promised and delivered.

Plenty of work for those who want it, which is the main thing.

Doesn't mean that work pays the bills though. In work poverty is being normalised. This may not be the case for you, but that's the thing with this deliberate devaluation of wages... when you're already up to your neck in it, these changes happening to us "all" can destroy your life... where as others will just have to give up some "nice to haves".

Yep, the UK is in a shit position (economy and productivity) and people need to realise that. You generally don't get paid well and have a good standard of living in a rundown shit country.
It is noticeably worse than it was 20 years ago.

No, the BofE are not an agent of government, and you might want to reflect that if they were more tied to government things might be a lot worse.

Nonsense.

They are the fiscal agent of government and wholly owned by the UK government.

The BoE governor is appointed by the chancellor as is the majority of the MPC. Government sets the inflation target.

And an act of Parliament defines intervention by the Chancellor if necessary. But they won't because it's a handy way of the government appearing their hands are tied.

The idiotic idea that passing this process to a group of people you can't remove democratically - especially when effectively operating cruel and regressive policy is ridiculous.

Don't ever buy into centrist thinking that the BoE being 'independent' (to set rates) is somehow a smart move that is benefiting is.

Look around you.

They’re not responsible for austerity, other policies of deliberate underinvestment that have led to reduced productivity, Brexit and 10 years of economic policy and mismanagement that have led to this conclusion.

I'm not saying the BoE is responsible for that. We are saying raising interest rates is not a solution and makes things worse.

They are raising the price level of money with the intent of causing unemployment to slow demand. That's policy.

Side point: BoE Governor is a Brexit supporter and that might not feed into his role officially but what do you think his mindset might be?

The idiotic idea that passing this process to a group of people you can’t remove democratically

Why would it be a requirement that operators of a technical job are democratically elected / removable? Most people don't know much about economics, including most on here. I know a tiny amount but am not qualified to decide on the competency of the head of the boe.

As a self employed person I am now earning less than the minimum wage and that's trying to run a sole trader business.
But feeling grateful that I've got work and have had to take more on from an outside source (not just my own customers) to try and earn some money.
Too much stock tied up in the business and being old, so not in a position to try and change professions now.

Without all the peripheral stuff, the statement is true, a lot of people aren't living within their means, credit is easy, shiny stuff is always nice, but in a time like this, it's all about getting yourself into good financial order and not continuing to spend outside of your income.

As for the other stuff, yes, Brexit has cost us dearly, as most of us knew it would, yet nobody held to account for the destruction caused by all those lies, same with the interest rates going up and up at the same time as BoE/Government/etc telling us it's not like other inflationary crisis', so why stick rates up, why when we were in a financial mess in the late 2000s were we able to magic up hundreds of billions, yet can't come up with a couple of billion to give our teachers, doctors, nurses, etc a payrise in line with the inflation partially caused by UK PLC?

Yes, lots to whinge about, but also people need to be smarter over this period, i hear people complaining about low payrises, or inflation, yet they're off to Disneyland for a 12k holiday with their family, or rolling up in a new car with finance, you can't burn both ends of the candle!

i hear people complaining about low payrises, or inflation, yet they’re off to Disneyland for a 12k holiday with their family, or rolling up in a new car with finance, you can’t burn both ends of the candle!

Hang on, don't conflate these two things. There are certainly some people who are less well off than they were, but can still go on nice holidays etc. Just less nice than they could previously; which in itself is irritating because you expect your standard of living to go up, not down.

But, and this is crucially important, there are far more people complaining about being poor who are actually poor and cannot even heat their homes never mind go anywhere on holiday. PLEASE don't mix up these two situations.

people need to be smarter over this period

And this is an example. Who are 'people' in this instance? Sure, some people are bad with money (like me) but that isn't always the same people who are poor. By following this line of thought, and writing about it on social media, you are victim blaming and consequently letting off the hook the people who are really responsible for this colossal long term ****-up.

Just been in Australia for a couple of weeks - people over there generally shocked at the ‘poverty’ wages here, whereas in Oz A$30 (about £20) is the minimum and having to pay A$40 to get someone vaguely competent. Perfectly understandable why people are leaving the NHS in droves when they can double the pay.
In terms of company excessive “profits” there have been two factors at play. Firstly a reluctance to invest in technology or skills to improve productivity - it’s far easier to negotiate a pay rise when your output has increased. Secondly, a preference for execs to increase dividends through share buy-backs and thus increase their own bonuses and pay

credit is easy, shiny stuff is always nice.

I hate to bring her up again, but this was the policy introduced by Thatcher; to exchange liveable wages that kept in line with inflation with easy access to personalised credit, and has basically been the economic policy for every government since. The BoE can hardly blame then people for doing what they been encouraged to do for the last 40 years.

The mash nails it

Accept that you are poorer' says mugger

Is now a good time to start the REJOIN campaign in earnest...

Why not? what have we got to lose?

The man’s an out of touch economically illiterate idiot.

I'm fairly sure he's probably read the same MMT book as you.

And a few hundred more books on economics as well.

There is a shocking lack of optimism on this thread.

There will be a general election in less than 18 months time. Not one single opinion poll this year, nor last year, has given the Tories a lead over Labour, in fact you have to go back to 2021 before you see that. And we are talking about Labour leads way beyond any margin of error.

All the evidence points to the Tories not being able to form a government in a few months time, and Labour quite possibly having a large majority.

Indeed despite being previously very keen to call early general elections to give their new leaders a mandate from the people, as was the case with Theresa May and Boris Johnson, the Tories have steadfastly refused to seek a mandate from their last two leaders precisely because they knew that they would lose the general elections.

Yet despite all that this thread appears to be wallowing in doom and gloom and engulfed in pessimism about the future.

It is a measure of the complete lack of confidence in the Labour Party's ability to improve on the current situation.

If the current Tory government is anywhere near as bad as most people make them out to be then it should be relatively easy for the next Labour government to significantly improve the situation.

In fact so easy that most of the punters on here seem to feel that the primary problem is that all Tory politicians are "thick as mince".

However very few, if any, believe that getting rid of the Tories will make much difference. Sadly I agree with them.

The only way things are likely to change is when people stop believing that the Tories are the problem.