:thumbup: Looks like we will all have to tighten our belts for the good of the country :thumbup:
Mervyn King: "Higher import and energy prices and taxes have squeezed real take-home pay by around 12%"
Mervyn King has said that the squeeze on UK take-home pay is necessary.
Speaking in Newcastle, the Bank of England governor said the current high inflation rate was unavoidable as the UK economy adjusts to higher commodity prices and becomes more competitive.
He said inflation was likely to rise further to 4-5% in the coming months, before falling back sharply from 2012.
And he implied that the Bank would thwart attempts by wage-setters to keep up with the above-target price rises.
please someone tell me...how British industry is going to recover, if we all have less money, to spend on goods. We will either not buy, or more than likely turn to cheap foreign imports. That's really going to help the economy that !!!
Also..please can you tell me, how The Bank Of England....can dictate the selling price of anything in private industry ???. Fact is Mr King....your predictions and policies have seen to have failed. You need to re-evalueate what your doing,.....or resign and let someone else who maybe has a more progresive idea take it forward.
Dean,
He's actually saying that he "will thwart attempts by wage setters to keep up with price rises."
Which means that he will stop employers giving above inflation or even inflation equalling pay rises. Given that most employers are currently cautious and would be resistant to large pay rises then this won't be too difficult to achieve across the economy as a whole.
But if wages go up, then the cost of goods go up and then people will need another pay rise :doh:
Well yes the banks can dictate prices especially the Bank of England, they can make it financially easier for cheaper imports, they can influence government and thier policies, they can increase the interest rates on British manufacturers, they can do many things which roll down to the highstreet.
Cure - Why not follow the example of countries like Germany, buy a Mercedes, Volkswagon or BMW and it is VAT free (they call it Mervestoier at least thats how you pronounce it god knows how you spell it)
Basically if a product is made in your country you don't charge VAT, this would lower the price of British built products, Toyota cars for instance made in Derby many Sony, Samsung and other "Japanese" products and of course products we have always made and produced in this country such as Staffordshire pottery.
Firms find it better to compete against imports from countries that have cheap labour or cheap tax on industry.
Foregein Firms find it more profitable to build manufacturing bases in the UK instead of other areas of europe.
This in turn creates more jobs in the UK.
Yes there is a big loss of VAT income to the government coffers but this is compensated by the boom in "buying british" and the decrease in unemployment.
My new car cost around £25,000 VAT element £5000, I bought a Citroen made in France, what is that I could have bought a similar car made in Britain but without having to pay the £5000 VAT, I would have been able to afford a better british car or saved myself some money, either way there is a very good chance a british car would have been the option for me to take.
Mids you have a good understanding of economic tools and how such things as interest rates can affect companies policies on a number of issues.
I like your idea on waving the VAT on British made goods especially as this would feed through to us giving less VAT back to Europe. However I would think that we would fall foul of European Directives that we can't unfairly subsidise British industry to the detriment of our European partners.
If as you say the Germans do it with their Motor industry then I guess this is just another example of the Brits doing it when other member states work round it .
European Directives = good point - so let's get out of europe, the very threat of that would make them think twice, the rest of europe rely heavily on the financial input of the United Kingdom to prop up the less wealthy nations such as Lithuania.
What does being a member of the EU actually do for us, mostly they dictate what we can and cannot do, would the rest of europe cease to trade with us, not a chance, do you think France, Germany and others could afford to stop selling thier products here in the UK ?
What is the richest country in the world, not europe but the world ? The answer is Switzerland, oh I know we have a lot of rich arabs but that is mostly rich individuals, The Swiss population are by most standards well off, with low taxes, high paid jobs, and a extremely good standard of living, a checkout girl in Switzerland has 3 times as much spare cash as those in other parts of the world, she has a nice house/apartment, a nice car, 2 or 3 holidays a year etc.
What is the difference between Switzerland and the rest of Europe? - Switzerland is not in the EU, do we refuse to import thier chocolate, cheese, army knives or cuckoo clocks, do thier neighbours Italy, France or Germany refuse to sell to them, not a chance, those 3 countries rely heavily on thier exports to the Suisse.
It was nice of you to say I had a good understanding of how it works, but that is kinda scary, I failed my 11+ left school at 16, flunked college after 4 months and got a job instead of further education, I have no GCSE's, CSE's or other qualifications no matter what they are called, I am not a well educated man, so if I can see solutions albeit that they might need tweaking why can't our highly paid politicians and thier advisors ?
