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just to make things a bit harder to survive this has become headlines..
From looking at my current spending it's more like 15 to 18%!
We're far from being the only country in an inflationary bind - it's happening all over the world, and the causes are fairly easy to identify:
1. World agricultural prices have risen by 60% in twelve months.
2. The cost of oil has virtually doubled in a year, and that affects the cost of almost everything we buy, including energy.
3. China's demand for wheat has gone through the roof, as tens of millions of Chinese people are taking to eating 'Western' white bread, and other wheat products.
4. Cereal production - particularly in America - has fallen as more and more farmers turn to growing lucrative bio-diesel crops.
As manufacturers find their raw-material costs and overheads rising they naturally seek to compensate, and one way to do this is to raise the prices of the goods they produce. We're asked to pay more for the things we want, and we compensate in two ways - either we buy less, effectively lowering our standard of living - or (more likely) we ask our employers for higher wages.
Bingo! You have spiraling inflation. The Bank of England can tackle inflation by raising interest rates, but if that happens when the economy is slowing anyway it could make matters worse. The truth is, we all have to grin and bear this for a while, and we'll come out of the tunnel - The Bank of England thinks things will start to improve early next year.
In the meantime, expect to see some tense moments between industry and employees as wage demands are turned down.
Nothing really new, we went through a period a bit like this in 1978/80. Inflation hit 25% and mortgage interest was 15%. People managed (I had two very young children at the time) by tightening their belts and using money saved for a `rainy day`.
Now if you don`t have savings because you like your foreign holidays, fancy car, eating out, designer clothes, new furniture, .........
Perhaps you could ask the Government to bail you out as they did Northern Rock!!!!
Like johndrew above I also bought up two young children at about the same time and managed surprisingly well. Even if inflation doubled it`s present rate of say 4% it will be nothing like as bad as it has been in the past.
As for blaming the present government for everything that goes wrong in the economy read FE posting above and I think you will agree that this nor any other government is to blame for all our ills.
FE you stated "The Bank of England thinks things will start to improve early next year" likewise the goverment often use the term "Dont worry" pretty much the same with Northen Rock i dont trust the bank of england or the goverment i had a conversation with a taxi driver lastnight who said "WHY" isnt the goverment reducing the tax on petrol to help our stuggling economy "to which i replied"i dont understand it all" & i dont i cant understand why gordon Brown isnt looking into reducing the tax on Petrol/Diesel to help the economy the protest's are going to get bigger & longer & if they goverment wont budge then i see CHAOS in teh UK & not in the furture more months then years...enlighten me please why the goverment cant or wont reduce the tax on fuel please..i am genuinly lost on lack of knowledge...
You are slightly out.
Inflation peaked at 26.9 per cent in 1976 and resulted in the Labour Chancellor, Denis Healey, having to go cap in hand to the IMF for a £2.3bn loan.
That led to the Winter of Discontent in 1978-79 and the resulting triumph of Margaret Thatcher, who eventually took the string out of the unions' excessive power.
For every tax cut a government makes it will match it with a spending cut. So where do you suggest the government makes it`s spending cuts, defense, the health service or perhaps roads or education.
Where would you cut back on spending so that us motorists stop complaining about the high price of petrol?
It is more the money that this government has wasted in the past that is infuriating, massive rises in pay for doctors and consultants for either the same or less amounts of work, money pumped into education without any real progress, thousands of extra public servants, the billions wasted on iraq and afganistan, not to mention the lives lost, failed IT systems, helicopters stored in a hanger. Dont say that these are just a fraction of the national budget, fractions all add up. It is NOT the governments money, they don't have any it is our money they waste
You stated "For every tax cut a government makes it will match it with a spending cut. So where do you suggest the government makes it`s spending cuts, defense, the health service or perhaps roads or education" not realy maybe this would be better spent here OR if the americans that helped the UK to Destroy afghanistan contributed towards this £600 Million i wouldnt have such a issue BUT...
Also our market & its tax payers money....
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