• Our booking engine at tickets.railforums.co.uk (powered by TrainSplit) helps support the running of the forum with every ticket purchase! Find out more and ask any questions/give us feedback in this thread!

What would you like to see announced in this year’s March budget?

Status
Not open for further replies.

RuralRambler

Member
Joined
7 Aug 2020
Messages
152
Location
Brentford
I was listening to a discussion about inflation on the radio a few days ago during which someone was suggesting inflation, as a lasting consequence of the current situation, could be up in double figures in another 10- 15 years time. He wasn’t expecting any immediate sudden rise, but did think that by the end of the decade inflation rates and interest rates could begin to rocket up as they did during the 1970’s.

He was pointing out that we haven’t really had any significant inflation in this country now for nearly 40 years and so only people over the age of 60 can really remember it. These days, especially after the last few years of exceptionally low interest rates, people just do not have an experience of high interest rates. I can’t really remember it very well but I can remember when I first started working and I had a standard building society savings account which was paying an interest rate of around 15%. In this area the high streets were full of building societies who were all competing for the money from miners accepting redundancy payments. They did very well during the first few years whilst the interest rates were so high.

It really depends on how other countries come out of covid. We're not in a vacuum. Exchange rates will affect imports/exports - we don't know how exchange rates will fare as that is the most obvious thing that changes if our partner economies come out of covid at different speeds to us - could be positive or negative for us. Interest rates are influenced by our country's credit rating which depends on our economy - if we come out strongly, then interest rates remain low. Inflation is a funny one. If the economy is too strong, then that drags up inflation. If raw material costs increase (due to exchange rate or shortages or different supplies), then prices will be forced up due to higher costs. But if people have no money, prices will be held down regardless of whether raw material costs increase or not, thus squeezing margins, reducing tax take, increasing unemployment (if firms close), etc. At the end of the day, we don't have as much influence on our economy as we'd like to think.
 
Sponsor Post - registered members do not see these adverts; click here to register, or click here to log in
R

RailUK Forums

bramling

Veteran Member
Joined
5 Mar 2012
Messages
17,685
Location
Hertfordshire / Teesdale
I was listening to a discussion about inflation on the radio a few days ago during which someone was suggesting inflation, as a lasting consequence of the current situation, could be up in double figures in another 10- 15 years time. He wasn’t expecting any immediate sudden rise, but did think that by the end of the decade inflation rates and interest rates could begin to rocket up as they did during the 1970’s.

He was pointing out that we haven’t really had any significant inflation in this country now for nearly 40 years and so only people over the age of 60 can really remember it. These days, especially after the last few years of exceptionally low interest rates, people just do not have an experience of high interest rates. I can’t really remember it very well but I can remember when I first started working and I had a standard building society savings account which was paying an interest rate of around 15%. In this area the high streets were full of building societies who were all competing for the money from miners accepting redundancy payments. They did very well during the first few years whilst the interest rates were so high.

I think that’s a very good summary, and the bit about many of today’s younger people not appreciating the dangers of inflation is very relevant.

The difficulty today is that so many people’s existence is built upon debt (which to be fair isn’t entirely their fault). High interest rates would be absolutely ruinous for many people.

I’m already sensing that yesterday is starting to prove a “wake up” moment for some people. The problem is it’s too late, the damage has been done.

Meanwhile another decent restaurant in my town has just gone out of business...
 

brad465

Established Member
Joined
11 Aug 2010
Messages
6,968
Location
Taunton or Kent
I was listening to a discussion about inflation on the radio a few days ago during which someone was suggesting inflation, as a lasting consequence of the current situation, could be up in double figures in another 10- 15 years time. He wasn’t expecting any immediate sudden rise, but did think that by the end of the decade inflation rates and interest rates could begin to rocket up as they did during the 1970’s.

He was pointing out that we haven’t really had any significant inflation in this country now for nearly 40 years and so only people over the age of 60 can really remember it. These days, especially after the last few years of exceptionally low interest rates, people just do not have an experience of high interest rates. I can’t really remember it very well but I can remember when I first started working and I had a standard building society savings account which was paying an interest rate of around 15%. In this area the high streets were full of building societies who were all competing for the money from miners accepting redundancy payments. They did very well during the first few years whilst the interest rates were so high.
I think that’s a very good summary, and the bit about many of today’s younger people not appreciating the dangers of inflation is very relevant.

The difficulty today is that so many people’s existence is built upon debt (which to be fair isn’t entirely their fault). High interest rates would be absolutely ruinous for many people.

I’m already sensing that yesterday is starting to prove a “wake up” moment for some people. The problem is it’s too late, the damage has been done.
US Fed Chair Powell gave a speech today that seemed very naïve to inflation fears in the markets recently, suggesting patience in withdrawing Fed support and keep money policy loose despite economy improvements and possible rises in inflation. He triggered a sudden sell-off in long-term US Treasury debt a bond yield % rise as a result, continuing a recent uptick in this rate (currently around 1.5%). All these bubbles and short-termism will come home to roost before long.

I'm not sure how much much this budget has proven to be a "wake up moment", at the moment at least everyone is arguing about some of the measures in it, unless I'm not looking in the right places.
 
Status
Not open for further replies.

Top