2022 Autumn Budget

[Jaygti]

Thing is though some thing are difficult to predict. Take shares for example, as you know it's all about predicting human behaviour. It's what the people (or the herd of sheep) are going to judge whether the share price is worth buying, the price can be super cheap but if the herd of sheep don't buy into it then the price will never go up.

The difference with the economy though is that if you pump more money into it then the amount of money passed around will only increase. This increase of passing money around is what causes inflation.

In my opinion they haven't calculated the effect of the increase of pensions and the living wage. The pensions increase is an extra £10.8 billlion pounds per year in pensioners pockets. The living wage is an extra £2.9 billion pounds per year in their pockets. That's just under £15 billion pounds that the economy will swallow up.

For reference the whole of the NHS budget including all the wages is £163 billion pounds per year. So all the amulances, hospitals, gp's.... all that with all that equipment, buildings heating, wages, medicines... well all that costs £163 billion. So the £15 billion increase in pensions and the living wage is 10% of the NHS budget.

It's a hell of a lot of money that is being 'added' to the economy. The key word there is 'added'. It's newly created money that's being added. When a business makes money it's taking money from somewhere else and putting it into their business, it doesn't actually increase the money in the economy, all a business is doing is taking money from someone else. However, if you increase pensions and the living wage then you are pumping the economy with more money. The pensions is newly created money, the living wage is a forced inflation of peoples wages come from the government.

So I don't believe inflation will drop, it will do the opposite because of the above reasons. The energy cost cap increase also adds to the problem as it gives the go ahead for the energy companies to go in and buy at an even higher wholesale price as they know they can pass on the higher costs to the people.

Still Nah!

1stly you say that no one can accurately predict what inflation will be, and then you proceed to do just that.

2nd lay Pensioners and people on benefits may have a bit more money , but almost everybody is down big time, which will more than cancel it out.

3rd lay don’t comment on the energy price cap when you don’t understand it.
The price cap is worked out on an average of the wholesale gas price over a 3 month period. It’s set by Ofgem , NOT the power companies.
April 23-June 23 started yesterday.
The Energy companies can buy gas whenever the want. In fact it helps them if they buy low their profits will be higher.

It doesn’t effect the cap.

If the wholesale gas prices drop the the price cap could even come in lower than the £3000 limit set by the chancellor.

 

[ched999uk]

The other thing is that the inflation we currently have is not caused by consumers buying too much stuff. It has been caused by things out of consumers control. i.e. the invasion of Ukraine meant demand for gas and oil rocketed as most of the West won't buy Russian fuel. Then because of the war there is very little Sunflower oil or wheat coming out of what was the biggest global supplier. The knock on effect has pushed the price of most things through the roof as everything relies on fuel.
In normal times the Gov wouldn't be so strapped for cash but after all the money that was spent dealing with Covid and leaving the EU has left the finances in such a poor state.
It's like one thing after another that's creating a perfect storm.

Remember that the pensioners and people on benefits will get their rise in April so they will have had to deal with the 10% price rises already so the rise will only get them back to where they where - if you believe that inflation is only 10% that is!

I really hope the measures reduce inflation but realistically everything isn't going to come back down. Just look at how much petrol/diesel has shot up and at first their was public outcry now no one mentions it as we have 'accepted' it as normal!

 

[Iron Giant]

Thing is though some thing are difficult to predict. Take shares for example, as you know it's all about predicting human behaviour. It's what the people (or the herd of sheep) are going to judge whether the share price is worth buying, the price can be super cheap but if the herd of sheep don't buy into it then the price will never go up.

The difference with the economy though is that if you pump more money into it then the amount of money passed around will only increase. This increase of passing money around is what causes inflation.

In my opinion they haven't calculated the effect of the increase of pensions and the living wage. The pensions increase is an extra £10.8 billlion pounds per year in pensioners pockets. The living wage is an extra £2.9 billion pounds per year in their pockets. That's just under £15 billion pounds that the economy will swallow up.

For reference the whole of the NHS budget including all the wages is £163 billion pounds per year. So all the amulances, hospitals, gp's.... all that with all that equipment, buildings heating, wages, medicines... well all that costs £163 billion. So the £15 billion increase in pensions and the living wage is 10% of the NHS budget.

It's a hell of a lot of money that is being 'added' to the economy. The key word there is 'added'. It's newly created money that's being added. When a business makes money it's taking money from somewhere else and putting it into their business, it doesn't actually increase the money in the economy, all a business is doing is taking money from someone else. However, if you increase pensions and the living wage then you are pumping the economy with more money. The pensions is newly created money, the living wage is a forced inflation of peoples wages come from the government.

So I don't believe inflation will drop, it will do the opposite because of the above reasons. The energy cost cap increase also adds to the problem as it gives the go ahead for the energy companies to go in and buy at an even higher wholesale price as they know they can pass on the higher costs to the people.

I've got nowt to say now really as @Cghwindowcleaning @Jaygti & @ched999uk have given some great input and I'm in agreement with the 3 of them as there are too many factors and facets that have and will all come into play.

I said to you early this year about us being in unprecedented times and no one could have ever predicted what has happened in the last 2-3 years, back then you disagreed with me about what an economist said on Radio 2 about not giving into wage increases as the economy needs money to drive the economy now you are saying the opposite that inflation will rocket,

covid has no doubt screwed up every economy and country across the world, we and most are on our asses and debt-laden, the scales need balancing or at least a bleedin good attempt and to get the feckin workshy lazy bar stewards off their asses instead of decent hardworking people being the ones who are actually taking the real hit and having to go to foodbank's to feed their families and rely on overdrafts credit cards and loans to be able pay their bills

 

[Chris34]

Still Nah!

1stly you say that no one can accurately predict what inflation will be, and then you proceed to do just that.

2nd lay Pensioners and people on benefits may have a bit more money , but almost everybody is down big time, which will more than cancel it out.

3rd lay don’t comment on the energy price cap when you don’t understand it.
The price cap is worked out on an average of the wholesale gas price over a 3 month period. It’s set by Ofgem , NOT the power companies.
April 23-June 23 started yesterday.
The Energy companies can buy gas whenever the want. In fact it helps them if they buy low their profits will be higher.

It doesn’t effect the cap.

If the wholesale gas prices drop the the price cap could even come in lower than the £3000 limit set by the chancellor.

No you mistunderstand me. You said to check out the boe forecast implying that that is how inflation is going to go over the coming months. All I said was that they were wrong last year, have been wrong in the past... and in 'my opinion' they are completely wrong now. I then gave my reasons for why I think they're wrong.

The second point you mention is correct, the more money that the pensioners and those on benefits and low paid will be cancelled out by the price rises. But that's exactly what I'm saying, you said it yourself 'price rises', that's inflation.

The third point I do actually understand it. It's very simple, if the energy providers are given the ok to charge a higher price then that's what they will do. Yes they will try and get it at a lower price, but that doesn't mean they have to pass on the lower price to the customers, even though they are supposed to reduce the price based on the actual profit they make, they'll make clever use of that money to make most of it disappear and keep the appearance of those profits low. Also with such high windfall taxes put on them the government will be happy to turn a blind eye in return for the higher tax collections.

 

[Chris34]

I said to you early this year about us being in unprecedented times and no one could have ever predicted what has happened in the last 2-3 years, back then you disagreed with me about what an economist said on Radio 2 about not giving into wage increases as the economy needs money to drive the economy now you are saying the opposite that inflation will rocket,

Sorry I misunderstand what you're saying there. Are you saying that the economist was saying not to give in to wage increases, and saying that I disagreed with that and said there should be wage increases?

 

[Jaygti]

No you mistunderstand me. You said to check out the boe forecast implying that that is how inflation is going to go over the coming months. All I said was that they were wrong last year, have been wrong in the past... and in 'my opinion' they are completely wrong now. I then gave my reasons for why I think they're wrong.

The second point you mention is correct, the more money that the pensioners and those on benefits and low paid will be cancelled out by the price rises. But that's exactly what I'm saying, you said it yourself 'price rises', that's inflation.

The third point I do actually understand it. It's very simple, if the energy providers are given the ok to charge a higher price then that's what they will do. Yes they will try and get it at a lower price, but that doesn't mean they have to pass on the lower price to the customers, even though they are supposed to reduce the price based on the actual profit they make, they'll make clever use of that money to make most of it disappear and keep the appearance of those profits low. Also with such high windfall taxes put on them the government will be happy to turn a blind eye in return for the higher tax collections.

I won’t bother with the inflation argument, what will be will be.

But if the power companies can source gas at a lower price they have to pass it on.
If the wholesale Gas price drops, so will the price cap, there’s no way around it.

 

[Chris34]

Shares don't work like that or not for most.I have shares in a company they are a very strong company should they develop a new product or post a good pre tax profit the share price will hold or go up if they remain stagnant or post a loss or a product doesn't come to development the price will drop it has nothing to do with how many people are buying them.,
Of course if every one wants in and there aren't many shares avalable then that will push the price up but that would be a short term gain for sellers.

It's like the current inflation most of this high inflation is based on all the free covid money floating about factored in with a supply and demand issue.This money would have all but gone now and cheap borrowing is all but ended.People won't keep chucking money about like they have as they just won't have it.

Giving 10% rise to those at the bottom isn't going to fuel inflation some of these people can barely afford to eat or heat there homes.These people at the bottom aren't using that extra to buy cars, holidays or home improvements meals out etc.

The rise in interest rates and gas,elec and fuel factored in with the high cost of everything else will make even those who can afford it with money to become cautious and not spend this will slow the economy and inflation down.

Actually shares do work like how I say, you're wrong on this. If you have more people buying than selling it drives the price up, if you have more people selling than buying it drives the price down. Ironically it works like inflation. A companies profits however bare very little resemblance to how a share price will move.

You can read about it here, the part about human behaviour is way down the page under the heading 'market sentiment'

Forces That Move Stock Prices

You can't predict exactly how stocks will behave, but knowing what forces affect prices will put you ahead of the pack.

www.investopedia.com

But ultimately what drives a share price is how many people buying vrs how many people selling. Nothing else matters.

But going back to inflation, well it doesn't matter if people are more cautious, if the cost of something is high and people are able to pay that price that the cost will only go up, not down. So inflation will stay and only increase as all the other public services get pay rises, council tax rises etc.

We'll see who is right and who is wrong but I don't believe the boe forecast, I believe it will continue at around 15% per year and raising interest rates won't stop it. I think it's much more ingrained on the economy due to the lack of cheap energy.

 

[Chris34]

I won’t bother with the inflation argument, what will be will be.

But if the power companies can source gas at a lower price they have to pass it on.
If the wholesale Gas price drops, so will the price cap, there’s no way around it.

Not an argument, a discussion ?

I think the problem is once a government can see a way of getting more in tax then there is no going back. They're expecting £10 billion from the windfall tax on the energy companies next year. Just like they do with the fuel prices at the pumps, they'll turn a blind eye to excesses in return for the high tax income. It doesn't matter which government is in, once they find another way to tax that's easy to monitor and collect, they stick with it.

 

[Iron Giant]

Sorry I misunderstand what you're saying there. Are you saying that the economist was saying not to give in to wage increases, and saying that I disagreed with that and said there should be wage increases?

I was raking into the back of my memory which ain't that great at times so may have got slightly muddled, the economist said that we need to curb spending and not give in to wage increases as people spending money would drive inflation up, then if my memory serves me correctly you disagreed with what I'd said the economist had said and you said people need to spend money to drive the economy

 

[RyeCleanLiam]

So they should pay the same road tax as everyone else there vehicles cause damage and wear and tare to the roads the same as diesel , I also don't agree with reduced rates for lower emissions cars as they also cause damage ,lower fuel consumption they will benefit from using less fuel so their running costs will be less .

VED or road tax isn't even spent on the roads infrastructure anymore. That's a well known fact. All VED is based on emissions to try and motivate people to buy cleaner cars and vans. If you made everyone pay the same tax then there is no incentive to buy cleaner vehicles.

 

[Iron Giant]

VED or road tax isn't even spent on the roads infrastructure anymore. That's a well known fact. All VED is based on emissions to try and motivate people to buy cleaner cars and vans. If you made everyone pay the same tax then there is no incentive to buy cleaner vehicles.

I'd say there is every incentive for those who wish to do their bit to cause less impact on the environment which is a reason for some but no doubt not all

 

[ched999uk]

VED or road tax isn't even spent on the roads infrastructure anymore. That's a well known fact. All VED is based on emissions to try and motivate people to buy cleaner cars and vans. If you made everyone pay the same tax then there is no incentive to buy cleaner vehicles.

As of 2017 the second year VED is the same for all petrol or diesel cars!! Plus if purchase price is over £40K then an extra £520 per year for first 5 years.
The previous system was based on emissions which did encourage people to get 'cleaner' cars - no idea why they changed tack.

I always thought VED should have been added to fuel. That way the vehicles that use most fuel pay most VED, it would be a perfect system, cheap to run as collection is done as part of fuel tax etc so no additional expense. Vehicles that do lots of miles would pay more, than the ones that do very few miles, heavy vehicles use more fuel so more VED. I couldn't see why anyone wouldn't make it part of fuel duty.

As for cleaner vans - VED doesn't change on vans dependant on diesel or petrol emissions. Gov don't want to encourage businesses to get more economical vans as they make lots of ££ out of fuel duty etc.

We are now starting to get to the point that electric vehicles are 'costing' the Gov lots of revenue hence them bring in a charge for VED in 2025. I'm still interested to see how they cover the loss of ££ from electric cars users not having to buy petrol or diesel!!

 

[scottish cleaning service]

I think road tax used to bring in £40 Billion a year and would be great if it went into the roads or new roads. No road tax is a non starter or the Gov loses alot of easy money. Electric batteries are very heavy so cause more wear and tear on the roads.

 

[THL4KEL]

At least all this revenue planned to be collected will be put to go use to pay luxury hoteliers one million pound contracts to house the influx of immigrants that arrive daily on our shores.

 

[Pjj]

VED or road tax isn't even spent on the roads infrastructure anymore. That's a well known fact. All VED is based on emissions to try and motivate people to buy cleaner cars and vans. If you made everyone pay the same tax then there is no incentive to buy cleaner vehicles.

I hear what you are saying but all vehicles cause ware and damage so all should contribute to it whether road tax is spent on roads or not why should ones who can afford to pay for brand new electric or economical cars get it free , that’s discrimination.

 

[Chris34]

I think road tax used to bring in £40 Billion a year and would be great if it went into the roads or new roads. No road tax is a non starter or the Gov loses alot of easy money. Electric batteries are very heavy so cause more wear and tear on the roads.

One thing with electric vehicles that I can see there being a problem is the acceleration. The amount of torque will mean the tarmac gets churned up.

 

[Chris34]

I was raking into the back of my memory which ain't that great at times so may have got slightly muddled, the economist said that we need to curb spending and not give in to wage increases as people spending money would drive inflation up, then if my memory serves me correctly you disagreed with what I'd said the economist had said and you said people need to spend money to drive the economy

Yeah I can't remember the exact discussion but it does ring a bell. I would definitely not agree with holding an economy back to curb inflation and I fully agree with people getting more money. What I don't agree with however is the bank of englands inflation forecast. I don't think the rate of inflation is good but their methods of forecasting and how to control it is all wrong imo, but we'll see.

 

[Iron Giant]

Yeah I can't remember the exact discussion but it does ring a bell. I would definitely not agree with holding an economy back to curb inflation and I fully agree with people getting more money. What I don't agree with however is the bank of englands inflation forecast. I don't think the rate of inflation is good but their methods of forecasting and how to control it is all wrong imo, but we'll see.

only time will tell mon ami

 

[eson]

If the wholesale gas prices drop the the price cap could even come in lower than the £3000 limit set by the chancellor.

Hi, you do understand the price cap is the average expected ££££ spent on energy by the average household. There is no actual £3k cap. You still pay for what you use . . . it could be more than £3k or less than £3k. The chancellor has not set a £3k limit at all. The chancellor's cap is the cost per unit. We all still pay for the number of units we use. Just clarifying

 

[Windowcleaningfleet]

Just listened to part of the end of the budget. Looks like inflation is going to absolutely rocket. Minimum wage is going to £10.42 in April. Don't let them 'poor little old little old pensioners' claim poverty when you're putting up their price, they're getting another £870 next year.

This is going to push inflation up a lot further. It's a bold budget and it's good that they're not tinkering around the edges... but inflation is going to hit the roof now.

U just got to crack on with it, put a £1.00 increase on your prices every year.

 

[dazmond]

My prices are going up next April just as the pensioners get their pay rise.....perfect timing!?