Inflation woes

[jaywalker]

I have a strong sense we are sleep-walking into more trouble than we realise.

Today I had notification that my parents' care costs will rise 5% next month. The reason given is the rise in the minimum wage (with more to follow in subsequent years). Do you think their pensions rise by that much?

But this is before the effect on wages/supply-of-care-labour: as EU workers leave to more rational climes (or are simply excluded by this contemptible government) we will realise that we have seen nothing yet.

[dbboy]

Also see http://www.eastdulwichforum.co.uk/forum/read.php?20,1780323,page=2

[jaywalker]

To be clear, I probably do subscribe to Friedman's general view. The reason living-wage increases are inflationary is that the BofE is expanding the money supply faster than a cheetah on speed. I have nothing against the idea of a living-wage.

Where a government has an unsustainable deficit (no danger whatsoever of that in the UK of course :-) ) then inflation is the only course open to it.

Hence the desperate moves to cancel RPI adjusted state-pensions, and try to get us to forget that housing costs have anything at all to do with inflation (the ludicrous CPI).