Nimrod103 wrote:BullDog wrote:Yes, believe it when you see it? The UK over the longer term has a pretty poor record on inflation. We now have an economy almost entirely dependent on imported goods if all kinds and consumer spending. That makes us extremely vulnerable to what happens beyond our borders and IMO even more difficult to keep a lid on inflation.
Evans-Pritchard's argument is that Globally populations are getting older and therefore less productive and dynamic, and therefore less prone to inflation. Also, he sees no let up in Global competition and trade which will continue to drive down prices (NB he and other pundits often talk of deflation, when they really mean dis-inflation. It is extremely rare for money to actually increase in buying power).
However, the push for net zero around the World (but particularly in the UK) will be highly inflationary. In the UK we continue to run big deficits, and there is no prospect of ending deficit spending, and that is highly inflationary as well. Higher public sector remuneration can be achieved either by taxing more or borrowing more. We seem to have reached the limits of taxation such that I think our economy will be seriously impaired. So borrowing it must be, and thus we go another step towards the poor house. Our only way out is to cut unnecessary public expenditure ruthlessly, but no significant political party is advocating that.
The UK political system is its downfall. Just repeatedly pendulum swings and selling the silver (assets). China's more constant mid/longer term based political system is now transitioning from saving (selling steel at below production cost ...etc.) to one where now it will be in decades of uplifting its population from field workers to middle-class and with less need to pull in foreign currencies.
The UK is becoming no different to any other prior case where bad management (political system) has led to over-dependence upon imported goods/services/skill but where that flow stagnates to leave the population relatively poor. The typical individualistic answer is ... to emigrate. As those that can afford to move self-exile, the 1% that pay a third of the total income tax take, so that leaves the 99% remainder having to pay 50% more in taxes just to fill that hole alone.
Inflation is just another form of taxation, so yes there is a tendency for both in the UK to increase. QE is just one means to induce inflation. State can print/spend money, albeit via suggested independence between the Bank of England and Treasury, that devalues all other notes in circulation that is inclined to induce inflation.
The UK would be better served by a technocratic political system, one that planned out beyond a five year window. Stability/consistency. In contrast we're pretty much doomed to continue with the pendulum Lab/Con swings of prior decades, micro management and inconsistency/instability. Relegated to a insignificant bunch of cold/wet islands to the north of mainland continental Europe, where the majority political choice is none-of-the-above (abstainers) given that neither Lab nor Con would permit any change (more often in power despite fewer than 1 in 5 of the population having voted for them).
If there were a candidate in each constituency that stood for a technocratic system alternative, ending of the existing Parliamentary system, I suspect it could gain considerable momentum. But in the absence of that or other form of 'revolution' it will be just business as usual, managed decline. Instances such as it taking 6 months for a governing party to elect a new leader, only to replace them 40 days later, or blowing over £100Bn on wasted furlough where only some were paid to stay at home, not others, in effect making that totally pointless.