Standard of living to plunge at fastest rate since 1920s

[TimberWolf]

Bank of England chief Mervyn King: standard of living to plunge at fastest rate since 1920s - Telegraph

Highlights of his beamingly positive and optimistic economic forecast include:

• Biggest threat facing the Bank’s Monetary Policy Committee was rising inflation
  
• No imminent hope of a rise in interest rates in coming months because of the poor economic outlook
  
• Savers and “those who behaved prudently” would be among the biggest losers in the squeeze
  
• Boom times for bankers

[Zippy]

Well, thanks - that's cheered me up no end.

[AtW]

WGAS about standard of living? So long as deflation (meaning your money buy more stuff) does not get us it's ok...

[TimberWolf]

WGAS about standard of living? So long as deflation (meaning your money buy more stuff) does not get us it's ok...

I take it you are being ironic. As in, they were telling us deflation was the concern, not that anyone believed it, and now they are buttering us up for hyperinflation, as per real plan.

[TimberWolf]

Your savings belong to us

-- bankers

[AtW]

now they are buttering us up for hyperinflation, as per real plan.

The real plan is so horrible that it can't be told.

[CheeseSlice]

WGAS about standard of living? So long as deflation (meaning your money buy more stuff) does not get us it's ok...

According to this FT blog, the BoE are loving this situation

Nothing could cheer the Monetary Policy Committee more. Now it can bat away suggestions it should be raising interest rates with the comment that this would be nuts as the economy is again contracting. High inflation is nothing to worry about if the economy is still in intensive care.

[AtW]

BoEs job is to keep inflation under control - they might be "independent" but if they are not doing their job (which evidently is the case), what are the mechanisms for this "independent" body to get some reality check, ie fired?

IMHO this year real inflation will really pick up - a lot of firms deferred price raises from the last few years and now they'll be forced to do it on one big WHACK.

I reackon 10% real inflation this year. The only thing that will be getting cheaper this year is sasguru

[CheeseSlice]

I find it quite amusing how Mervyn thinks he can sway employers and employees to leave wages alone during a period of massive inflation.....

"Attempts to resist their implications for real take-home pay by pushing up wages would require a response [from the Bank's monetary policy committee]."

i.e. If you push your bosses for higher salaries, we'll only raise interest rates and hence your mortgage repayments.... So suck up your pay cuts, and enjoy your tripe sandwiches!

[AtW]

I find it quite amusing how Mervyn thinks he can sway employers and employees to leave wages alone during a period of massive inflation.....

High unemployment helps ...

Problem is that current inflation is not due to wages going up too high - this is due to essential stuff like fuel, food, materials going up in price - essentially this is new tax on the West that is paid out to foreign countries that supply those basic materials.

The good news is that in exchange some lucky wealthy representative of those countries will be buying Premiership Football Clubs, overpriced overhyped footballers etc...

Maybe EPL should grow up to 100 clubs? This would sort out football in UK