Contract rates not obeying inflation

[eek]

I agree with the first part and encouraging offshoring is one of the main ways the government has tried to destroy us.

I agree less with the idea that paying money to foreigners who don’t pay NI somehow increases the tax base and means the public sector should award themselves massive pay rises. Perhaps you could elaborate a bit more on that?

It came from

The reason for that is because our various governments have hated us and done everything they can to destroy our lives.

which to me read like an anti-IR35 argument. And IR35 is a problem but it's because the way we work is so abused by others that we get continually caught in the cross-fire.

[hugebrain]

It came from



which to me read like an anti-IR35 argument. And IR35 is a problem but it's because the way we work is so abused by others that we get continually caught in the cross-fire.

Which is strange when I didn’t even mention IR35!

I thought it was mostly immigrant visas and managed service companies this week?

[eek]

Which is strange when I didn’t even mention IR35!

I thought it was mostly immigrant visas and managed service companies this week?

Oh you don't even need to be an MSC provider - HMRC just requires an Agency that is crap at doing accurate paperwork. The Cover | s44: a new line of attack for HMRC? (the-cover.com)

[jamesbrown]

Oh you don't even need to be an MSC provider - HMRC just requires an Agency that is crap at doing accurate paperwork. The Cover | s44: a new line of attack for HMRC? (the-cover.com)

An interesting continuation of the same pattern (and clearly explicit policy) of targeting outside IR35 contractors en masse (MSC, Chapter 10 and now this), rather than through the expensive and often unsuccessful route of Chapter 8 IR35. It really is a no brainer and tribunal judges seem to be obliging so far, which doesn't bode well for the MSC legislation.

[dsc]

Oh. And there is a really simple cure for inflation. Slash VAT. It will take a year for that to impact the actual inflation figures, but as inflation is likely to come down on its own not long after (it's not 'rampant', it's a supply side shock caused by Russia, Covid and Brexit), that would be harmful meddling. We're going to have to ride this out as the only answers to the poverty increases are to throw more cash at the poor which is ultimately self-defeating.

I'm not so sure inflation will die down so quickly as I doubt the Russia issue will get resolved so quickly (supply issues also don't look like they are fixing themselves fast enough). Unless of course the west decides enough is enough and they will simply abandon Ukraine on the promise that Russia doesn't go any further and everyone goes back to using russian gas. I do agree however that we have to "absorb" inflation, there's no easy way out which is not really something a lot of people want to listen to.

[jamesbrown]

I'm not so sure inflation will die down so quickly as I doubt the Russia issue will get resolved so quickly (supply issues also don't look like they are fixing themselves fast enough). Unless of course the west decides enough is enough and they will simply abandon Ukraine on the promise that Russia doesn't go any further and everyone goes back to using russian gas. I do agree however that we have to "absorb" inflation, there's no easy way out which is not really something a lot of people want to listen to.

Agree. As long as Europe depends heavily on imported gas (and, realistically, it does in the coming small number of years), Putin will use this to turn the screw by reducing/stopping flows through Nord Stream 1. He can easily afford to do this. A large part of the current inflation is energy prices, but the concern is whether it will become more broad-based (which it seems to be doing) - once that happens, it is very hard to reverse without an enormous recession.

[Lance]

I'm not so sure inflation will die down so quickly as I doubt the Russia issue will get resolved so quickly

If Russia doesn't get resolved, and all other things being equal, then inflation will drop off next year.
Cos inflation is about change in price. Once the price has risen, if it stays the same the inflation curve will revert down to 0.

Inflation is a measure of the change of price not the price. In engineering terms it is a measure of acceleration not velocity.
So unless the supply side gets worse, or demand side inflation (wage rises etc.) increases, inflation will reduce.

[dsc]

If Russia doesn't get resolved, and all other things being equal, then inflation will drop off next year.
Cos inflation is about change in price. Once the price has risen, if it stays the same the inflation curve will revert down to 0.

Inflation is a measure of the change of price not the price. In engineering terms it is a measure of acceleration not velocity.
So unless the supply side gets worse, or demand side inflation (wage rises etc.) increases, inflation will reduce.

Ah yes of course, but how can wages remain the same considering an increase in cost of pretty much everything which then has an impact on cost of services / goods? From what I remember a fairly large chunk of the UK inflation wasn't energy related (base inflation is around 6%? with the total being 10%ish?).

[jamesbrown]

If Russia doesn't get resolved, and all other things being equal, then inflation will drop off next year.

The "all other things being equal" is doing a lot of heavy lifting there. We're currently looking at an energy price cap of £4k+ next year, but it could go even higher. These cost pressures will feed through again next year, they are continuing. The longer they accelerate, the more likely they are to become embedded and broad-based, meaning persistent inflation and dramatic monetary policy intervention, followed by deep recession. I think that outcome is at least as likely as the benign outcome where inflation drops and there is no push through into long-term inflation expectations. We'll see.

[Lance]

The "all other things being equal" is doing a lot of heavy lifting there. We're currently looking at an energy price cap of £4k+ next year, but it could go even higher. These cost pressures will feed through again next year, they are continuing. The longer they accelerate, the more likely they are to become embedded and broad-based, meaning persistent inflation and dramatic monetary policy intervention, followed by deep recession. I think that outcome is at least as likely as the benign outcome where inflation drops and there is no push through into long-term inflation expectations. We'll see.

You may be right. I'm not a fortune teller.
But the financial markets don't think so.

For example you can get a fixed term mortgage, with a goof LTV for around 2% for 2 years. 3.2% over 5 years.

If inflation was as embedded as say it might be, interest rates are going to be going up. If the lenders thought that was the case they wouldn't be offering those mortgage rates.

Supply side shock from covid, brexit and Russia are the causes of the current inflation. All of which are only going to impact inflation in the short term.