>>458618
>Low consumption

But these are the good guys. The brave patriot scrooges who refuse to spend even a penny more than they need to.

>>458618

We'd be happy if they were low consumption, but they aren't. They've got gold-plated pensions, which they're all too happy to piss up the wall on conservatories and cruises and wanky furniture and seeing The Rolling Stones at Wembley. They feel financially secure because the core of their income is inflation-indexed, but they also have cash in the bank that they're keen to splash about before they get too old to enjoy it and before inflation erodes it away.

>>458617

>The principle thing that bothers me about it is how the people who are going to pay here are the people who already feel the squeeze but the people who need to be targeted are just going to get away with it, and because of that, that's why it's not going to be effective.

Interest rates are inherently a blunt tool, but they're the only tool available to the BoE. The government have a lot of more subtle levers to pull that could suppress inflation or more equitably distribute the burden, but they aren't willing to do it. They want to bring down inflation, but they also don't want to be seen to be doing anything that affects the living standards of their core voters. Our current government is completely paralysed by indecision, infighting and cowardice and everything is going to keep getting worse at a predictable rate until we get a general election.

>>458617
>Then I'd enact a few taxes of the sort the Mail and Express would call a "raid" on middle class upper earners and un-mortgaged retirees, the kinds of people who otherlad points out are driving a lot of the spending and yet who are totally immune to interest rates.

Perfect opportunity to merge income tax and national insurance.

Base rate is now 5%. Gilt yields are suggesting that it'll average 5.5% over the next three years.

>>458639

It's not going to make things easier for Sunak. On a few levels.

>>458640
Before today's announcement the market expectation was that the base rate wouldn't fall below 4% until December 2027, but it fes like every month the BoE are announcing that what's really happened is worse than they predicted.

>>458640
Easier for what?
He's got a year left in power give or take a few months. Finding a miracle to save the economy does him no good at all, longer term strategic thinking for the Tories at this point is that a deeper recession in the coming years just makes it more likely that Labour will only get one term in parliament before being kicked back out.

>>458642

He'll still have to keep a straight face during the election campaign and pretend it's not all just a piss take.

The losses for the Conservatives will be disastrous any way you look at it, but just saying fuck it, we'll try again in five years will not help them. There will already be countless backbenchers with iffy seats in obscure constituencies who'll be doing a lot of angry shouting behind closed doors on election night. But if you don't keep up appearances and at least tell your die-hard supporters to go and vote for you regardless, some of the more important MPs might lose their seats as well, and that's when the whole party could start fighting itself from within. These internal power struggles can last years, just look at Labour after ARE GoBro lost in 2010. Building up a new Tory candidate will also take years, but whoever that will be in five years time will not have it easy uniting warring party factions if Sunak only leaves behind scorched earth.

>>458642

The Tories have fucked themselves for a generation, independent of the current economic woes. The received wisdom is that people naturally become more conservative with age, but that's just confusing correlation with causation. People become more conservative when they have assets worth conserving and people normally accrue more assets as they age. That's why right-to-buy and privatisation were cornerstone policies for Thatcher - by transforming millions of council tenants into homeowners with share portfolios, she created millions of natural conservatives who didn't feel the need for a cradle-to-grave welfare state.

A tenant in their forties or fifties is no more likely to vote Tory than a tenant in their twenties; the age of the average Tory voter is increasing in tandem with the age of the average homeowner. That was temporarily sustainable for the Tories because of the demographic effects of the baby boom, which created an abnormally large cohort of people who had their prime working years during the Thatcher government. That wasn't going to last forever and the baby boomers are now starting to die off. Younger generations aren't achieving the kind of financial milestones that push them towards voting Tory in anywhere near the numbers necessary to sustain a Tory majority.

The Tories might hope that a long recession will push people back towards them, but that isn't how the electoral calculus works. Unless there is a seismic crisis on the scale of 1979 during the first term of the Starmer government, a protracted recession will only push people further away from the Tories.

>>458645
>the age of the average Tory voter is increasing in tandem with the age of the average homeowner.

Have you got anything to back that up? In 2010 every age category (that bothered to vote) were more likely to vote Tory over Labour apart from 18 to 24 year olds and in 2019 the crossover age for voting Tory over Labour was 40.

The average age of the first-time buyer hasn't really changed since 2006. Last year first-time buyers made up around 53% of all mortgage sales, compared to 37% in 2006 with a gradual upward trend in between.

I had to pull my children out of £38,000-a-year private school because of the soaring cost of living… It's been a nightmare finding a good state school

https://archive.ph/2yZMi

>>458647

A three year increase in the age of the average first-time buyer doesn't sound like a lot, but it equates to about 1.5 million fewer people getting on the housing ladder. It also understates the impact of housing affordability, because people who never buy their own home don't count towards that stat.

The government have attempted to get more people on the housing ladder by loosening affordability criteria and through schemes like help to buy and shared ownership, but that has bottled up a crisis that we're seeing play out right now. A lot of people could just barely afford to buy a house when the base rate was almost zero, but they're staring down the barrel of negative equity and repossession now that interest rates are returning towards historical norms.

The 2019 GE was weird for all sorts of reasons - two very idiosyncratic party leaders, a single-issue campaign oriented around Brexit etc - so it bucked the broader age trends. At the 2017 GE the crossover age was 47, which I think is far more representative of "normal" general election dynamics.

That's some top DM clickbait there. I particularly like the 4 massive photos of 3 kids, which are all tagged as 'posed by models'. Coupled with the complete lack of details, it hits all the necessary buttons.

https://www.reuters.com/world/uk/uk-supermarket-bosses-reject-profiteering-charge-2023-06-27/

>British supermarket executives rejected allegations they were profiteering through a cost of living crisis on Tuesday, telling lawmakers they had taken a hit to profit by not passing onto consumers the full force of pricing pressures they face.

>Trade unions and politicians have accused the supermarkets of "greedflation", saying they've been too slow in passing on to consumers falls in global commodity prices.

>Executives from market leader Tesco (TSCO.L), Sainsbury's (SBRY.L), Asda and Morrisons, appearing in front of the lower house of parliament's business and trade committee, rejected this charge, saying their profits fell last year.

>"We make 4 pence in every pound which I don't think is any example of profiteering," Tesco commercial director Gordon Gafa said.


At some point of the equation, they must still be lying.

>>458689

Britain has higher food inflation than similar countries for one main reason - Brexit. High energy and labour costs are affecting pretty much everyone, but only Britain has decided to massively increase the cost and complexity of importing food. Everyone involved knows this, but no-one is willing to admit it.

The major supermarkets are publicly-traded companies and their accounts are a matter of public record. Anyone can look at those accounts and see for themselves that food retail is a very competitive business and supermarkets operate on very thin margins. Accusations of profiteering are completely unfounded, but they're going to persist unless we're willing to confront some obvious truths.

>>458690
You're being too simplistic - the reason is that we're utterly dependant on global market prices and we're starting from what can be seen as a lower starting point for certain essentials.
https://www.bbc.co.uk/news/business-65833619

Brexit may have some impact but it ignores the strategic vulnerability we've built into our supply chain. And our food could be A LOT cheaper if we didn't fall for the bleach bogeyman. Imagine what US food prices would do for the poor in Britain.

>>458693
Have you been to (bits of) the USA recently? It's no longer the land of cheap plenty.

>>458694

I've read something where they said that a jar of supermarket strawberry jam can now be up to $10. They are hurting more than we are.

Supermarkets and other fuel retailers will be forced to publish live prices under a new scheme aimed at stopping them overcharging, the government says. It comes after Britons were found to have paid an extra 6p per litre for fuel at supermarkets last year as weak competition let them charge more.

The Competition and Markets Authority (CMA) has been investigating the UK fuel market following concerns that falling wholesale prices are not being passed on to consumers. According to the watchdog, supermarkets were usually the cheapest place for fuel but competition was "not working as well as it should be". It found that:

- Average annual supermarket margins on fuel had increased by 6p per litre between 2019 and 2022 - equivalent to £900m in extra costs for drivers.

- Morrisons' and Asda's targeted fuel margins for 2023 had doubled and tripled respectively since 2019.

- Sainsbury's and Tesco had followed suit and raised their prices, suggesting competition had "weakened".

- Increased margins on diesel across all retailers had cost drivers an extra 13p per litre from January 2023 to the end of May 2023.

https://www.bbc.co.uk/news/business-66085232

>>458757
>competition was "not working as well as it should be"

Well, that's another way to describe a "Price-Fixing Cartel", I suppose.

Ocado have lured me back in with discount codes but their fresh produce is much worse than it was about six months ago, particularly their carrots, bananas, melons and mangoes. I guess if places were middle class people tend to shop are struggling to supply fresh food then we must really be fucked.

I don't know about you lads, but in the past year my water bill has gone down from £72 per month to £44 per month. The only change I've made is that I've turned the plumbing off on my toilet and I manually fill the cistern with a jug instead.

>Private equity backed supermarkets Asda and Morrisons did not pay a penny of corporation tax last year, as new disclosures shed a light on how buyout firms minimise tax by loading their companies up with debt.

>In the decade before they were bought out by their current private equity owners, they paid an average of more than £200 million of corporation tax a year between them.
But since their buyouts, their profits have been reduced to losses, mostly due to hefty interest payments on the new debts loaded onto their balance sheets. As corporation tax is only levied on profits, they pay nothing.

>Last year, Tesco and Sainsbury, who are more conventionally financed, paid corporation tax of £247 million and £120 million respectively. Britain’s headline rate of the levy rose from 19 per cent to 25 per cent this year. Accounts filed by Asda at Companies House this month showed its finance costs, principally interest payments on debts, came to £395.5 million, pushing Britain’s third largest supermarket to a £74 million pretax loss. Meanwhile, Morrisons shelled out £406 million on financing costs, which contributed to a £1.3 billion pretax loss.

>The supermarkets have been under scrutiny in recent months over allegations that they have been profiteering from rises in the cost of food.

https://www.thetimes.co.uk/article/asda-and-morrisons-pay-zero-business-tax-wdgp9g88c

>Magnum and Marmite-maker Unilever has reported profits rose by a fifth over six months, based almost entirely on raising its prices. The consumer goods giant said that across the business, pre-tax profit rose 21% to €5.2bn (£4.4bn) but the number of goods that it sold fell.

https://www.bbc.co.uk/news/business-66299138

Brazen profiteering.

Got my coupon for spending over £100 at Lidl last month. It used to be money off, but now it's a free tub of ice cream instead.

>>459271
Wait until you notice that those mega packs of chicken they do are actually more expensive by weight. The same is true on all the chicken sizes. Getting a two-pack of chicken breast with all the packaging is cheaper than any larger item.

CEOs of UK’s 100 biggest listed companies received average increase of 16%

https://www.theguardian.com/business/2023/aug/22/ftse-100-bosses-given-average-pay-rise-of-500000-in-2022

Supports what I've been saying for a while. They keep saying "muh wage price spiral", but if there is a wage price spiral, it's coming from the top. The data shows us that's the only place it possibly can come from, because above average earners are the only segment receiving consistent above average payrises. The rest of us have all become poorer in real terms than we would have been ten years ago.

>>459805
>above average earners are the only segment receiving consistent above average payrises

That's 50% of the population and no I'm bloody not.

>>459816

>that's 50% of the population

No it isn't.

This country has a very steep curve for income distribution with the vast majority of people on or below the £33,000 median, a smaller group on your "professional" sort of six figure money, and then a small handful making silly money off everyone else's back.

When you look at the numbers, this country is much less well off than it thinks it is. That used to be offset by still having a functional state that provided you a lot of things without needing to worry about it, but you can't say the same today.

One of you bossman economists explain why my idea that I had this morning won’t solve all economic woes everywhere.

Interest rates are going up to slow down the economy, right? And the government can’t afford to increase public-sector wages, or pay for schools or the NHS, because they have no money. And they can’t increase taxes because, get this, it’s bad for the economy. That’s what Liz Truss was all about, and most economic experts do at least agree with her on that: lower taxes can stimulate the economy. So perhaps you see where I’m going with this: instead of tackling inflation by increasing interest rates, couldn’t we tackle it by increasing taxes instead? That way, at least the government get the money instead of the bankers.

>>460456

The most obvious thing to do right now is things like bump up taxes on high earners, maybe not directly through income tax but by things like the proposed VAT on private schools, etc.

The problem is the inflation and stagnation we are facing right now isn't caused by the classic "wage price spiral" you always hear the talking heads bleating about. They're only saying that because it protects their own interests at the expense of the wider economy.

What we have is a situation where the poorest are not getting any better off, but the wealthy are, and the pace at which this dynamic deepens is accelerating too. It's like a car where the wheels are different sizes at each end. It'll still drive alright to a point, but eventually it'll just be a ridiculous and obviously impractical deathtrap with monster truck wheels at the front and Morrison's trolley casters at the back.

>>460456
It's political suicide. If you raise taxes then people can directly see it affecting them in their payslips. Raising interest rates is less tangible.

>>460456

The government doesn't control interest rates, the Bank of England does. They have complete political independence, combined with the legal duty to maintain interest rates at the 2% target. They know that interest rates are a blunt tool, they know that the burden will disproportionately fall on the small minority of people who pay a mortgage, they know that it's wreaking havoc on the private rented sector, but they can't do anything about it and it's not really their problem.

The government could reduce inflation more quickly and more fairly, they could push the costs of high inflation onto people who can most afford it, but they don't want to. Whether they don't want to because of ideology, because of incompetence or sheer rabbit-in-the-headlights panic, I don't know.

>>460460

>Whether they don't want to because of ideology, because of incompetence or sheer rabbit-in-the-headlights panic, I don't know.

I think it's quite reasonable to suggest it's both. They're ideologically opposed to anything vaguely redistributive, and at the same time they've got fuck all clue what they are doing.

At least five or six years back the party was still coherent enough they might have recognised that in a situation like this it's very much needs must, even if it goes against their beliefs; but at this point they are just doing all they can to stop the party being fully wiped out of existence at the next GE.

>Co-op's food business lost £33m in the first six months of this year as shoplifting cases hit a record high.

https://news.sky.com/story/falling-food-inflation-linked-to-retailers-cutting-prices-not-costs-coming-down-co-op-ceo-warns-12966318

>>460823
Nice to see the old tactic of putting two facts in a headline and implying a connection is going strong.

>>460824
>The boss of the Co-op grocery chain has called on the police to take shoplifting more seriously and says he is frustrated by a lack of action against thieves who cost the business £33m in the first half of 2023.

>The Co-op has seen crime, shoplifting and antisocial behaviour jump 35% year-on-year, with more than 175,000 incidents recorded in the first six months of this year – or almost 1,000 incidents every day.

>While historically thieves have targeted certain products such as cigarettes, he said they were now stealing all kinds of items from confectionery to meat and health and beauty products.

>Hood said the Co-op had invested £200m in body cameras for staff, CCTV and other measures to keep employees safe as the group was losing stock worth more than £70m a year. He said he was becoming “increasingly frustrated” about police inaction, claiming they failed to respond to 71% of reports of serious crimes.

https://www.theguardian.com/uk-news/2023/sep/21/co-op-boss-urges-police-to-take-shoplifting-more-seriously-after-33m-cost

What do you mean?

WE'RE IN A RECESSION.

>>462845
Hurray! Look where all the attempts to avoid a recession have got us. Look what a shitshow it's been. My conclusion is therefore that this is the start of the age of things finally getting good again.

>>462852
Personally I think it's another tick in the "Soviet-esque decline" theory I'm committed to. It appears the "solution" our splendid and wise government are considering is more austerity, which as we all know was such a success the first time we were this close to once again being a land of milk and honey until COVID crashed the party. Still, what are the odds of another pandemic in a decade doing the exact same thing?

I don't want to be overly pessimistic, but I am of the genuine and heartfelt belief that the country is knackered. As in, it's done, endgame, finito. Nowhere do I see bold solutions that will properly fix anything, let alone ones that might create something better than what went before it. Worse still, we're almost a generation removed from a time when the state was seen as a force for, well, much of anything really, but specifically for the betterment of the nation. The UK is quite literally beginning to forget that the nation is supposed to work for us, as much as we are for it. Combined with the technological and cultural stagnation we have, the latter half of the twentieth century is beginning to look like some kind of "Five Good Emperors" era long fluke. Again, I don't want to be pessimistic. Besides, that's now two lazy historical comparisons I've made, so it's clearly time for me to shut the fuck up.

>>462852
>Look where all the attempts to avoid a recession have got us.

We've spent over a year in coordination with almost every nation on Earth trying to tame inflation by raising interest rates.

>>462845

Oh they've finally noticed have they? Christ.

>>462853

I share your pessimism, but if it's any consolation I don't think it's just us. It's happening all over the west. We built our houses out of straw and we just put blind trust in the big bad wolf of globalisation not to blow them down- Fundamentally, without me getting into too much of that lefty ranting I'm prone to, you just can't run a healthy economy on services and financial voodoo alone. But our leaders have not been concerned with a "healthy economy", they are robber barons. We see the same shit situation for average people where housing costs are spiraling, wages stagnant, inflation biting all across the US, Canada, and Europe. It's alright if you are wealthy and own some property, but if you don't, you're fucked.

The post war consensus isn't coming back either, and I am not afraid to point part of the blame on immigration for that too. Part of the UK's rather unique approach to socialism was deeply tied to our national pride and patriotic sense of "doing our bit", which we were owed our welfare in return for. That social contract has been eroded and as generations of people from countries who simply don't have that contract (and especially in the case of our Eastern European friends, are deeply pessimistic about anything resembling it thanks to their home countries histories with socialism), begin to make up more and more of our population, it's hard to see how we can revive it.

I was going to say something about how it's not all Doom and gloom and there is some potential hope but I can't remember what it was now.

>>462853

The Resolution Foundation recently produced a very good paper on how to get us out of this mess. The crux is that the average British household would be about eight grand a year better off if our rate of growth had kept pace with France or Germany. It is possible to learn from our mistakes and catch up on growth with some reasonably low-hanging fruit, but the Tories haven't even tried because they've been so preoccupied with their own factional bullshit. We're in a very deep hole and there's no quick or easy way out, but there is a way out.

Remember the early 2000s when nobody really cared about politics because it was all boring and everything was basically fine? We could have that again.

https://economy2030.resolutionfoundation.org/wp-content/uploads/2023/12/Ending-stagnation-final-report.pdf

Recessions are a bit stupid because it was clear we were in one last year, you could feel it, but we only get told we were in a recession last year now. It doesn't feel as bad now as it did then.

>>462856
I don’t think “growth” is the answer. Back in the Theresa May days, the Conservatives kept saying, “You might think we’re fucked, but look, we have growth! So actually everything is fine because look at all this growth.” And it was bollocks then so I suspect it is bollocks now. What we need is an economy that leads the world in something. China has that, America has that, Germany has that, and they’re smashing it out of the park. Italy doesn’t have that, France doesn’t have that, we don’t have that, and we’re all miserable and doomed. Now, maybe Jeremy Hunt or whoever it was at the time was being misleading when he trumpeted our 0.2% growth as a booming golden era, but if you can claim there’s growth because millionaires are getting richer while everyone else isn’t, then growth is not the best way to measure a successful economy.

>>462860

There hasn't been a decoupling between output per hour and wages like we've seen in the US - the problem is that output per hour hasn't gone up. Outside of London, British firms have Eastern European levels of productivity, mainly due to a lack of investment. We do lead the world in financial and legal services, but that has very little impact outside of the capital.

What does have an impact is the enormous number of mediocre businesses that are built around cheap labour rather than capital investment. The textbook example is the fact that the number of automatic car washes in the UK has declined, because it's cheaper to just hire a Bulgmanian with a sponge and a bucket. The same thing is replicated across the economy; Britain has the highest proportion of low-skilled, low-wage service sector workers of any developed economy.

Inequality is very high in the UK, but it's not because we have an unusually high number of super-rich people. Our top-heavy, London-centric economy is mostly a result of exceptionally low productivity outside of London. We have far too many people working in nail salons and gyms and pointless admin jobs that don't contribute very much to the bottom line; even with German levels of taxation we can't have German standards of living, because there just isn't enough money in the economy to spread around.

>>462861

In sine respects I think it can be argued that's a chicken and egg problem, right? There's no money to spread around because it's all concentrated at the top, and the people in those positions are only interested in investing it in real estate and so on. Thus the lower levels of the economy never experience the investment they need to see productivity growth, which keeps them low.pay, which means nobody has the money to spend to support businesses that would increase productivity... It's all circular innit?

The question is what can we do to get money into the regions and not just the capital.

>>462862
Leaving the EU didn't help there; that forced some money out into the regions. Conservatives promised this money would be maintained on leaving, this was of course an obvious lie that was proven very quickly.

I do find it difficult to feel sorry for northern turkeys who voted for Christmas, though.

WE'RE OUT OF THE RECESSION. SUNLIT UPLANDS FROM NOW ON!

https://www.bbc.co.uk/news/business-68983741

>>464040
99p Petrol here we come. Right lads?