Which is it

[selby]

     The BBC slated the government unmercifully when inflation was going up as their fault and asked the questions every day what were they going to do about it.
      Now it is coming down the government have very little to do with it and is just a natural world wide trend they are not responsible for.

[BillyStubbsTears]

Have you got any links for where the BBC that you don't watch did that Selby?

[ravenrover]

Would that be because the Govt claimed inflation was out of their control, now they claim the credit when it is coming down.
Name 3 actions the Govt has taken to bring inflation down, I'll wait

[Donnywolf]

We've taken action and halved inflation says the Prine Miniature and if he wasn't a twisted lying WhatsApp losing person maybe 10 PC of Electorate
might believe him

[Pancho Regan]

     The BBC slated the government unmercifully when inflation was going up

I must have missed that Selby - can you enlighten me?

[i_ateallthepies]

Stick to football, Selby.

[Branton Red]

Blaming the Government for the high inflation we've suffered is ridiculous (unless you were against sanctioning Russia for invading Ukraine).

Crediting the Government for inflation subsequently falling is equally ridiculous.

There is little a Government can do in the short term to stymie global supply shock cost push inflation.

The latest inflation figure of 3.9% is good news esp against the latest wage inflation numbers of 7.3%.

However it strongly suggests that the Bank of England were far too aggressive in increasing interest rates in the summer.

Many people (esp the relatively poor) have suffered unnecessary additional hardship due to this and economic growth has been strongly subdued as a result.

An error that is unlikely to be corrected, and will therefore continue to cause unnecessary hardship and lower growth, until inflation falls close to the BoE's 2% target (which I also disagree with at least as a short term goal given current economic conditions).

[ravenrover]

Did not the disaster of 49 days help kickstart the inflation rise?

[BillyStubbsTears]

BR

I'd broadly agree with that. I know we have differences on the effect of Brexit on inflation, but that is a small issue compared to the cost shock of 21/22. The Govt wasn't to blame for that. And yes, those one off cost increases dropping out of the inflation figures is nothing to do with the Govt either.

One thing I would say is that the insanity of the Truss term did cause us problems in increasing interest rates that the Govt has to pay to refinance borrowing. That's had an effect on the BoE's freedom of movement.

But I agree with you that we really should be having a debate on the 2% target. It's going to be hard to screw down inflation to that level. And on the bigger stage, the GFC showed that with a 2% target, there's not much leeway when a deflationary shock hits to get interest rates below inflation and stoke demand. Does feel like a vitally important lesson not learned.

[BillyStubbsTears]

The cost push issue is worth reflecting on. It's a sobering thing to think about.

What caused it was a reduction in "stuff" available to buy on international markets. Mainly oil and gas, but also grain, and space in container ships as the world rebounded from COVID.

The way the market works is, if there's less to buy and people still want to buy, prices go up.

But income doesn't. We were having to pay more as a nation for imported fuel, food etc. But we didn't have any more money.

In simple English, that means that we, overall as a country, could afford to buy less stuff in 2023 than we could in 2022. We had as much money, but we were poorer in what that money could buy.

That is an inescapable fact for the country as a whole. No getting round it. That's the sobering point. There's no way that the country can manage that without someone taking a hit.

The issue then is, who bears the costs? If half the population get a pay rise in line with inflation, that is taking money away from the other half of the population who will therefore be hit even harder.

The fair way to do it is to make sure that those just getting by, poorer pensioners, disabled, low paid, unemployed etc, see their income rise to keep pace with inflation. And the rich are expected to tighten their belts and pay higher taxes to facilitate that. Because they won't starve  - just have one fewer holiday.

In practice, it's gone a bit differently. The Govt has actually done a decent job of protecting the very vulnerable. State pension, minimum wage and key benefits have gone up in line with inflation. But beyond that it's been a free for all. The Govt has screwed down public sector wage rises and private sector wages have done much better. That's going to badly affect the attraction of teacher, nurse, council worker jobs etc for years to come. 

[Branton Red]

BR

I'd broadly agree with that. I know we have differences on the effect of Brexit on inflation, but that is a small issue compared to the cost shock of 21/22. The Govt wasn't to blame for that. And yes, those one off cost increases dropping out of the inflation figures is nothing to do with the Govt either.

One thing I would say is that the insanity of the Truss term did cause us problems in increasing interest rates that the Govt has to pay to refinance borrowing. That's had an effect on the BoE's freedom of movement.

But I agree with you that we really should be having a debate on the 2% target. It's going to be hard to screw down inflation to that level. And on the bigger stage, the GFC showed that with a 2% target, there's not much leeway when a deflationary shock hits to get interest rates below inflation and stoke demand. Does feel like a vitally important lesson not learned.

Billy

Agreed. This is not quite as interesting as debating with you when we disagree 

The 2% target made much more sense when it was first implemented.

The other side to your deflationary shock point is how the target can stymie attempts to grow the economy given the current economic climate.

We have low unemployment (great), we've ended FOM and there is political pressure to reduce/subdue immigration numbers. Relatively high nominal continual wage inflation is to be expected. Certainly higher than 2%.

However the Government/next Government aim to grow the economy (increased govt spending, increased investment, tax cuts, a more progressive tax system) it will also stimulate demand, which increases inflation. Which triggers the BoE to increase interest rates given the 2% target, which cuts economic growth.

High inflation is very bad news - it makes everyone poorer. But some inflation is necessary for economic growth. We shouldn't be scared of inflation of say 3-3.5% whilst unemployment is low and wage inflation high.

[Bristol Red Rover]

Blaming the Government for the high inflation we've suffered is ridiculous (unless you were against sanctioning Russia for invading Ukraine).

Crediting the Government for inflation subsequently falling is equally ridiculous.

There is little a Government can do in the short term to stymie global supply shock cost push inflation.

The latest inflation figure of 3.9% is good news esp against the latest wage inflation numbers of 7.3%.

However it strongly suggests that the Bank of England were far too aggressive in increasing interest rates in the summer.

Many people (esp the relatively poor) have suffered unnecessary additional hardship due to this and economic growth has been strongly subdued as a result.

An error that is unlikely to be corrected, and will therefore continue to cause unnecessary hardship and lower growth, until inflation falls close to the BoE's 2% target (which I also disagree with at least as a short term goal given current economic conditions).

I know you'll probs not be interested, but Johnson went to Ukraine to tell them not to negotiate with Russia, as they were doing, in April 22. He said the west will do this and that and all would be good. Didn't work out for Ukraine, didn't work out for UK including re inflation. I believe Johnson was part of a government.