Tuesday 13 July 2021

Inflation (part 94)

Not for the first time this year, I can't help drawing attention to surging energy prices:  they are continuing strongly.  Wholesale gas in Europe has doubled (sic) in the past 4 months, with electricity, coal and carbon rocketing also.  I don't recall anything quite like this since oil went to $147 for a nanosecond in 2008.

The recovery programmes are starting to kick in.

Post-covid wages are obviously under huge upwards stress in many sectors.  Catering staff can't be found, as any trip to the pub / restaurant / hotel will readily confirm.

Where on earth is this heading?   Very uncomfortable for some - even the triple-locked pensioner might be queasy.  Sunak has balls if he seriously proposes to short-circuit that.



E-K said...

Where is it leading ?

A nation more economically divided than it has been in 100 years.

The Tesla class able to travel and eat out and the rest unable to afford to do so.

Live music, for example.

A friend near Reigate used to follow his favourite pub band (I've seen them, they're awesome.)

Now only playing garden parties for the WFH elites.

Shrinkflation, Mars Mars are shrinking in their wrappers.

Don Cox said...

Shrinkflation is helping me to get my weight down.

Don Cox

dearieme said...

I'd like to see Sunak cut corporation tax to 10% and promise to raise it to 15% when the world cartel does so.

He should cut employers' NICs too.

Pay for it by abolishing Foreign Aid and HS2. Piece of cake!

Anonymous said...

MPs seem determined to get foreign aid to 15%.

CityUnslicker said...

When prices of oil etc go down, rarely do we hear talk of deflation. A lot of the price rises are getting things back to where they were pre-pandemic - is this truly inflationary over say a 5 year cycle?

Wages for some sectors I get because thanks to brexit/covid the casual labour they need is not coming back soon enough for them.

More worrying, specialisation of key resources in the hands of russia and china (e.g. rare earths, lithium) is going to be really inflationary and could be 1970's oil shock sized if certain events play out.

andrew said...

One sort of inflation is where the price of goods rise in response to an external shock.

Another sort of inflation is the result of the middle - class subsidies handed out over the last couple of years.

People living in the big city commuter belts have been 150-600 per month better off as a result of not commuting. they feel rich and have been bidding up the prices of houses, art, not so much cars as there was nowhere to go and holiday homes.
I think this is called demand-pull.

If I am right do not panic.

This is because
a) people start commuting again and so the excess money gets spent on commuting and the demand pull fades.
b) people do not start commuting again and shortly employers start replacing these expensive remote workers in the commuter belt with cheap remote workers in frome and the demand pull fades.

E-K said...

Andrew: Yeah. People near Frome are cheap. I know this for sure !!!

There is no getting away from the fact that basics, such as paying for a roof, keeping the space under it warm and getting to work to pay for it all is going to get hideously expensive. That is now Government policy.

Most who work from home won't be doing so for long. There will, however, be a Working from Home elite who will form the Tesla class.

Eventually there will be gated communities and a country looking a bit like Sth Africa but without the sunshine.

I am also bothered by news that Westminster security will be forced to wear masks while it will be optional for MPs and Ministers.

This class distinction is becoming visible and unpleasant as we saw at the G7

The plebs standing to attention in masks while the politicians glad-hand and are allowed to behave normally.

Masks masks masks...

I cannot stress that this is an even more important line in the sand than Brexit and fishing.

We are creating two classes of citizen here. Humans and Servants.

E-K said...
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E-K said...
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E-K said...


Racism in football.

The problem has never been racism. The problem has always been football, it brings out the worst in people, which is why I've always hated it.

No other sport needs a "Kick it Out" campaign.

So ban football.

Alas it wasn't Priti who was stoking up tensions - taking the knee at football matches was deliberately provocative. And the England successes have been completely overshadowed by three days (and counting) of BBC hysteria without any acknowledgement that 55 million people did not insult Marcus Rashford.

We are under a three prongued attack: BLM, Greenism and Covid.

The Left couldn't win the votes so now they are making the country ungovernable. Mostly via the industrial wing of the Labour Party which is the NHS.

Lockdown = National Strike in all but name.

Elby the Beserk said...

And on that bombshell, do feat on another paper from the GWPF analysing the real costs to us idiot taxpayers of NetZero.

Essentially the whole country will need rewiring, recabling, heavy duty new fuse boxes and deep deep pockets...


Go long on wood, fur coats and generators.

lilith said...

Nothing cheap about Frome any more. Guardian writers moving here and waxing lyrical about how cheap and friendly it is have made it expensive and grumpy. Only the other week our local was listed #3 or #4 in The Times for best country pub, which means it will be impossible for six months. If I have to wear a mask on T F London it will be a balaclava.

I'm fully expecting to be told I can't use my oil fired boiler and as a result, becoming very hardy indeed. There won't be many under 50 who can remember life without radiators. We are currently losing the generation who were excited to only have to share the tap/loo with next door. The politicians will reckon if our grandparents managed, so will we.

Anonymous said...

"eventually there will be gated communities"

Pretty much every new house in our village, which has moved from country folk to director class in the last ten years, has electric gates. Once (say 1990) you only had them if you were in a big house near a big city. Before that (1960s) you wouldn't have them at all. I remember in the 80s a lot of ground floor flats in places like Wandsworth had barred windows or those sliding grilles.

Anonymous said...

PS - Steve Baker and his "take the knee" crap - looks like we have a ready made replacement for Teresa 'Nasty Party' May.

Maybe he's been misquoted - he seems generally to be a good egg.

andrew said...

The mid-80s
I had a friend whose parents lived in a small cul de sac in a v.v. nice part of hampstead.
Sting to one side and Terry Gilliam to the other. All the garden hedges and fences were low so it looked like the gardens all joined up and a lovely view for about 100m
Then someone moved in and built a big fence.
Then everyone else did.
They gained in privact but lost something much larger.

E-K said...

Lilith - I was only joking. (Just to be clear)

I remember life without central heating/double glazing too and really deep winters. No micro-fibre clothing then - just a knitted sweater and hat and gloves that Mum made.

Icicles off the single pane windows and a good hour to stoke the fire and get any warmth... having been startled awake by a mechanical Noddy alarm clock.

Fucking shit, it was.

Thank GOD for the Gobblin Teasmade.

WHHIIIIIIRRRRRR all night long then PSTCCHHHHH P-KERRRRRRR K-K-KERR... PLOP PLOP then BZZZZZZZZZZZZ ! and "Ahh ! Lovely cuppa tea that ! Mmmmmm !"

E-K said...

Greta would not be going for it if she'd had my upbringing.

I say stuff the Manitees.

lilith said...

E-K, you made me laugh anyway!

Ah, those '70's nights...waiting for my bloody feet to warm up and finally accepting I would have to learn to sleep with blocks of ice at the end of my legs. Even in the 80's most places just had those damp producing gas fires on wheels that singed your eyebrows when you lit them.

formertory said...

@ E-K: We are creating two classes of citizen here. Humans and Servants.

Absolutely. Now fast-forward 800,000 years (through the imagination of that man-of-his-time, the old fascist H G Wells) and we'll have the Eloi (eternally childlike descendants of the Millennials) and the Morlocks (hungry descendants of the present-day political classes).

A pox on them all, and their knees.

formertory said...

Particularly their bloody knees.


E-K said...

Knees... as though I need reminding ! (Took me 10 minutes to get up this morning)

Lilith.. I can still smell the paraffin fumes every time I have Ready Brek !

Jan said...

Reminds me of the Parkray we had in one place. There was a coal chute in the front path leading to a cellar so we had a delivery of coal for every winter. We ran radiators from the Parkray although they never seemed to get very hot. This was in the 80s and we thought we were being very radical and if there were any power cuts as in the late 70s we would be sorted.

Unfortunately the sulphur in the coal rotted the flue which went up the chimney and over time we were being slowly poisoned by sulphur dioxide. You could smell it when the wind was blowing from the SW. If it ever went out overnight there was a devil of a job to relight it whilst freezing in your pajamas. Getting a gas boiler was bliss.

lilith said...

Yes, Jan, bliss indeed. However they are coming for our boilers. You will need to be Tony Blair or Richard Branson to maintain a heating system. Us peasants can put on a jumper and huddle around a cheap Chinese candle.

Matt said...

The eco-conscious have never experienced a cold house either because they were from upper middle class families or because they are too young (millennials).

Both imagine that getting rid of cheap energy won't be a problem and that it's simple to replace it with windmills running off unicorn flatulence.

Too late to fix it once both groups realise the world has turned to crap. So presumably they'll come up with some way to keep themselves in comfort and screw everyone else.