Cost of living!

[MPx]

Still not quite with why the negativity on the BoE raising the base rate.  I do get the point about inflationary pressures being (probably) mainly a capitalist world issue and outside the control of any UK institution.  But that doesn't stop the incessant demands (whipped up by our rabid media) for "something to be done".  The demand seems to be mainly aimed at the Government but partly at the Bank of England.  I think I've said before that the BoE has but one lever to pull.  The base interest rate.  So 12 times a year it can go up, stay the same, or go down.  That's it.  No more magic bullets.  If the economy were equivalent to driving a car then you might argue the BoE has control of the brake pedal.  Just that one pedal, and with no advanced knowledge, let alone control, of what any other body who might have other controls in their grasp might do or be planning to do.  The government have fiscal control (mostly taxes) but also to an extent money supply.  So more levers than the Bank has, but no overall control. 

Its certainly possible to make things worse than they need to be - maybe thats the source of the complaints.  But there's no way of "taking control" in any meaningful way. 

Both the treasury and the Bank have significant sized departments full of economists with impecable qualifications - many of them properly clever people.  There will be almost the same number of different ideas about what is the right thing to do. There's a huge amount of pseudo science undertaken with incredibly complex maths and modelling to explain, predict, and forecast the effects of change.  One problem is that in the end Economics is really a behavioural science with many assumption made based on what "a reasonable man" would do.  However the historical evidence is that neither the markets nor the population consistently act like " a reasonable man" so things never quite turn out as expected.  We might all have our own ideas of how simple it would be to make things better...but honestly, if your ideas did work it would be more luck than judgement.

[TdM]

And yes, increased unemployment is better than inflation. Inflation is hard to deal with, unemployment and recession is relatively easy to tackle, although it would be preferable to avoid 

Interest rates and doom mongering from the central bank tries to reduce borrowing and spending to minimise inflation and guide people to put money away. It is arguably how much effect it has when energy prices are rampant but it will have some effect at least.

[Bibs]

17 minutes ago, TdM said:

That would be because producers sell their electricity at global market rates for a kWh. Doesn't matter how you made it or what it cost to produce it gets sold at the same rate therefore, global rates up? We all pay more.

Wait, what?

Our bills have been legally mandated to include a levy to give these non-nationalised companies cash to build renewables infrastructure to be able to produce and sell energy elsewhere with zero benefit to us?

[Frickin_idiot]

6 minutes ago, Bibs said:

Wait, what?

Our bills have been legally mandated to include a levy to give these non-nationalised companies cash to build renewables infrastructure to be able to produce and sell energy elsewhere with zero benefit to us?

Socialised risk, privatised profit it seems. 
Maybe I am grossly oversimplifying but it doesn’t sit well with me putting the great unwashed at the mercy of the market but then circumnavigating the market with these climate levies.

[Barrykearley]

Interestingly the UK is one of the few places never to have had a revolution - yet 

[RobinB5]

23 minutes ago, Barrykearley said:

Interestingly the UK is one of the few places never to have had a revolution - yet 

1642-1660 might have something to say about that Barry.

[Barrykearley]

🤣 proof you should never believe anything you read on the internet @RobinB5 - looks like we are overdue one now then

[RobinB5]

To be honest it was only Marx who called it a (bourgeois) revolution and it didn't end well for Cromwell and friends in the end anyway.

[PaulCP]

11 hours ago, MPx said:

Still not quite with why the negativity on the BoE raising the base rate.   
 

One problem is that in the end Economics is really a behavioural science with many assumption made based on what "a reasonable man" would do.  However the historical evidence is that neither the markets nor the population consistently act like " a reasonable man" so things never quite turn out as expected. 

Nail on head with the 2nd quoted para.

It is not the BoE increasing interest rates that most people object to, it’s how the banks behave afterwards. Instant increase in loan & mortgage rates and delayed fractional increase in savings and investment rates (which for the past 10 years have not Bly been a small fraction of lending rates) = further increase in margins & hence profits for banks.

You are correct, the high street banks do not act like a “reasonable man”

[phil flash]

On 04/08/2022 at 17:38, Bibs said:

I'm still struggling with this. If we're getting so much power from our own renewables, why are prices going through the roof? While I appreciate they won't be free (even though we paid for the infrastructure) how are our bills tripling?

 

 

Good question..  trouble is "The Renewables" have a tendency to overclaim their contribution...  what's happening NOW can always be found here ...

http://gridwatch.templar.co.uk/ 

[C8RKH]

17 hours ago, RobinB5 said:

1642-1660 might have something to say about that Barry.

Was that a revolution? Where the common man rose up and overthrowed a tyrannical whatever?

Or was it Toff on Toff using the blood of the common man to settle their scores?

[RobinB5]

5 hours ago, C8RKH said:

Was that a revolution? Where the common man rose up and overthrowed a tyrannical whatever?

Or was it Toff on Toff using the blood of the common man to settle their scores?

Revolutions don't have to be class based, just a forced replacement of an existing order.

[Barrykearley]

In that case @RobinB5 one could argue we have that every 5 years

[C8RKH]

19 hours ago, RobinB5 said:

Revolutions don't have to be class based, just a forced replacement of an existing order.

So if it's toff on toff then not a revolution, just a tiff?

You get my point. I agree with the previous poster in that I don't recognise what I would regard as a revolution at that time.

[RobinB5]

You can define 'revolution' however you want to. The formal definition though has nothing to do with class. 

[Kimbers]

They are saying Electricity & Gas bills are going up as high as £4200 a year by November! My how we laughed as our electric bill on its own is already £372 a month! I'm already there and thats without any heating aspect!

 https://www.bbc.co.uk/news/business-62475171

[march]

I have been watching heating oil prices and they may have bottomed out (just been talking to the local garage owner and he has said petrol is dropping but heating oil is going up). May be a good time to order the winter heating oil if people have not already done so.

Edited August 9, 2022 by march

[Techyd]

1 hour ago, Kimbers said:

They are saying Electricity & Gas bills are going up as high as £4200 a year by November! My how we laughed as our electric bill on its own is already £372 a month! I'm already there and thats without any heating aspect!

 https://www.bbc.co.uk/news/business-62475171

Wow - what is your standing charge and unit rate if you don't mind me asking?  That sounds like an awful lot to me, but then you might be using a lot of electricity to account for that!

I think last month by elec was £114 (25.44kWh and 23.03 standing charge)

 

[Chillidoggy]

2 hours ago, Kimbers said:

They are saying Electricity & Gas bills are going up as high as £4200 a year by November! My how we laughed as our electric bill on its own is already £372 a month! I'm already there and thats without any heating aspect!

 https://www.bbc.co.uk/news/business-62475171

Are you growing cannabis in the loft?

[Kimbers]

18 minutes ago, Chillidoggy said:

Are you growing cannabis in the loft?

2 Young adult lads who play computers 24/7, both Wendy and I work from home most of the time, so that's 2 more computers. Hottub, Aircon.......... need I say more?

[andydclements]

3 hours ago, march said:

I have been watching heating oil prices and they may have bottomed out (just been talking to the local garage owner and he has said petrol is dropping but heating oil is going up). May be a good time to order the winter heating oil if people have not already done so.

I'd been watching it also, and came to that sort of conclusion, so ordered 1000 litres a couple of weeks ago, to pretty much take us to next summer. I had 500 earlier when the level was getting down and at the time had hoped to see a bit of a drop, Prices then fluctuated and did eventually drop but levelled out and so I pulled the trigger pretty much when they were talking of Germany's gas supplies being a looming problem (can see markets running away when somebody says a big consumer will need more energy)

[PaulCP]

Re gas & electric prices, luckily I opted for a 2 year fixed rate in July 2021. At the time I was fuming since the new rates represented an increase was 40% over my previous deal, but pleased I took the gamble with the 2 year fix option rather than my usual 1 year. All purely down to luck, no science involved on my part.

Not being smug at all since I have been reading reports suggesting that the cap is likely to continue increasing during next year. Hence I am trying to prepare myself for the big hit that is going to land right on my chin next July.

Our current consumption equates to an annual coat of £1850, I’m expecting that to increase to £5k plus at my next renewal 😟

[Dan E]

1 hour ago, Kimbers said:

2 Young adult lads who play computers 24/7, both Wendy and I work from home most of the time, so that's 2 more computers. Hottub, Aircon.......... need I say more?

Computers cost absolutely nothing to run all that lot flat out wont be more than £15 a month, the aircon and hot tub however. Your bill is ridiculous, do you have electric heating or something, mind you you wont be using that at the moment . 3kw of A/c is going to cost you say 15p an hour so 24hrs solid is just over a oner a month. Something is wrong there my friend obvs all IMHO

[Kimbers]

Electric heating in 2 outside offices, Dishwasher is used once a day, Both my boys work in very hot enviroments so washing machine is used at least once a day. No gas here so Oven is Electric, Heating is turned off so hot water is on emersion electric as well. 2 fridges, Xbox, 2 computers, Aircon every night in our room, Fans in the boys rooms, Kettle must get boiled 7-8 times a day minimum. Main TV, Sky, Tropical Fish tank....... Plug in car normally plugged in for full charge in 6 hours a day....forgot about that one.

Think the hottub and Aircon plus kettle will be highest use?

 

[Bibs]

Get one of the Octopus overnight tariffs and temper use of dishwasher/washing machine overnight. Put the hottub on an overnight timer too unless that needs to be on 24/7 and set the AC to sleep mode (ours has it) where it lowers output throughout the night until it's on 'fan only' after a couple of hours of cooling, you'll not notice as you're asleep and it'll still keep you cool. 

I pay a quarter of the daily cost per kwH overnight and we set all that plus the car charging for between 12:30 and 4:30 am. 50% of our monthly use is on the cheaper cost tariff and it's less than 8p/kwH compared to 40p during the day. 

They're doing the £50 each deal again if you sign up here - https://share.octopus.energy/tan-bloom-811