Jaygti
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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.