The next recession

[seafoid]

I'm no economist, but the current rise in inflation, is it not being driven by supply chain issues (Brexit/Russian Oil/Gas) and Corporate greed rather than too much spending and not enough demand?

Raising the interest rates will have a huge impact on those with mortgages and may already feel squeezed by the prices of everything else going up and could lead to a lot of defaulting!

I struggle to see how that is going to reduce inflation.

I'd say interest rates will go up next month again and for a few months at a steady pace.

I wonder how high they'll go up?

https://www.ft.com/content/88a23f52-e225-4fd4-b812-46a7fe4ef630
"Decio Nascimento, chief investment officer at hedge fund firm Norbury Partners, which is up about 7 per cent this year, says market confidence in how quickly US inflation will fall back to 2 per cent is "preposterous" compared with historical precedent. Odey, meanwhile, expects the market's "cast-iron belief" that the Fed has done enough to control inflation will be undermined this autumn. As markets adjust, he expects large sell-offs in conventional government bonds and big gains in index-linked bonds"

Interest rates could easily go to 6-8%
If they do go for 30 year bond ETFs when inflation is dead because the returns will be fantastic.
At 8% a thirty year bond is worth 11.48
At 1% a thirty year bond increases in value to 26.03, a return of 127%.

[seafoid]

#seniorhurling

https://www.ft.com/content/25451156-434a-4c36-96ef-774d99c89688

In the International Energy Agency's judgment, it is quite possible that global oil production will be inadequate to meet demand as soon as next year.

American shale cannot expand at the same rate again. Although the largest US shale oil formation — the Permian Basin in western Texas and south-eastern New Mexico — is projected to reach record output next month, overall US output is still more than 1mn barrels per day below what it was in 2019..

The best geological prospects for a game changer akin to what happened in the 2010s lie with the huge Bazhenov shale oil formation in Siberia. But western sanctions mean that the prospect of western oil majors helping Russia technologically is a geopolitical dead end.

Running electricity grids on solar and wind base loads will require technological breakthroughs on storage. It is impossible to plan with any confidence what progress will have materialised in 10 years, let alone next year.
The only way forward is realism for the short term, recognising that there is no way back to cheap energy, allied to radical, long-term ambition.


This coming winter will bring a reckoning. Western governments must either invite economic misery on a scale that would test the fabric of democratic politics in any country, or face the fact that energy supply constrains the means by which Ukraine can be defended.

[armaghniac]

In the very short term we have to manage this. In the medium term we need more nuclear. In the longer term the renewables can be pushed on.

[seafoid]

https://www.ft.com/content/bac15cb3-bbc4-48bf-88d0-7b67ad4949e7

AC: We will necessarily see a slowdown. As a matter of fact, it's a desired slowdown in the short term, because that will establish the conditions for much better growth in the medium term. And I think the key aspect that will really determine how deep the economy could go down, is the nexus between the real sector and the financial sector.

[seafoid]

https://www.ft.com/content/778e65e1-6ec5-4fd7-98d5-9d701eb29567

UK and European wholesale natural gas prices are already trading at close to 10 times normal levels and other forecasters have also raised their inflation predictions

[seafoid]

The Union is a liability for the North  at this stage


https://www.ft.com/content/778e65e1-6ec5-4fd7-98d5-9d701eb29567


It added that the shifts would lead to inflation "entering the stratosphere". "We now expect CPI inflation to peak at over 18 per cent in January," said Benjamin Nabarro, chief UK economist at Citi.
UK and European wholesale natural gas prices are already trading at close to 10 times normal levels and other forecasters have also raised their inflation predictions.

Goldman Sachs and EY said they expected an inflation rate of at least 15 per cent around the start of next year and the Bank of England said this month that inflation would exceed 13 per cent towards the end of the year.

Nabarro said Citi's new forecasts had taken account of a 25 per cent increase in wholesale gas prices last week and a 7 per cent rise in wholesale electricity prices.
"Even with the economy softening, last week's data reaffirmed the continued risk of pass through from headline inflation into wage and domestic price setting could accelerate,"
The rate of inflation has exceeded expectations in most months of this year as price rises have spread through the economy. The ONS said it stood at 10.1 per cent in July, the highest level in more than 40 years and the highest rate among G7 countries.

[seafoid]

https://www.cnbc.com/video/2022/10/11/says-strategist.html

[armaghniac]

While prices remain high, the energy price situation is moving in the right direction generally
https://www.euronews.com/my-europe/2022/10/10/europes-gas-prices-reach-three-month-low-as-consumer-demand-and-industrial-production-decl

[theskull1]

"Energy crisis: Europe's gas prices hit three-month low as demand falls"

Its late Autumn .....How can demand be falling?

[seafoid]

"Energy crisis: Europe's gas prices hit three-month low as demand falls"

Its late Autumn .....How can demand be falling?

Companies changing how people work, energy saving, higher costs cutting energy use etc

[theskull1]

Most people working from home have been working from home solidly for more than 2 years seafoid, so that argument doesn't hold IMO.
Will I understand that a lot of people will indeed be turning off lights they don't need and will turning down the thermostat as well to save on energy use, that surely is going to be offset by the increasingly darker evenings and colder temperatures?

[armaghniac]

"Energy crisis: Europe's gas prices hit three-month low as demand falls"

Its late Autumn .....How can demand be falling?

Companies changing how people work, energy saving, higher costs cutting energy use etc

Big users of gas may have changed to oil, or reduced production. People cutting back is in the ha'penny place.

[seafoid]

NI food inflation

https://www.belfasttelegraph.co.uk/news/uk/how-everyday-food-items-have-risen-in-price-in-the-past-12-months-42078625.html
Here are some examples of how the cost of food has risen in the past year.


The figures are based on the Consumer Prices Index (CPI) measure of inflation and have been published by the Office for National Statistics.
In each case, the figure is the percentage change in the average price over the 12 months to September 2022.
Low-fat milk 42.1%
Margarine and other vegetable fats 30.5%
Whole milk 30.2%
Jams, marmalades and honey 28.1%
Butter 28.0%
Olive oil 27.2%
Cheese and curd 23.1%
Pasta and couscous 22.7%
Eggs 22.3%
Sauces, condiments, salt, spices and culinary herbs 22.1%
Frozen vegetables other than potatoes 20.3%
Potatoes 19.9%
Ready-made meals 19.0%
Poultry 17.2%
Meat 15.3%
Bread 14.6%
Fish 13.5%
Yoghurt 12.8%
Crisps 11.8%
Edible ices and ice cream 11.5%
Fresh or chilled vegetables other than potatoes 11.1%
Pizza and quiche 9.7%
Fruit 8.8%
Rice 6.8%
Breakfast cereals and other cereal products 6.8%
Confectionery products 6.1%
Sugar 4.7%
Dried fruit and nuts 4.6%
Chocolate 3.3%

[Milltown Row2]

NI food inflation

https://www.belfasttelegraph.co.uk/news/uk/how-everyday-food-items-have-risen-in-price-in-the-past-12-months-42078625.html
Here are some examples of how the cost of food has risen in the past year.


The figures are based on the Consumer Prices Index (CPI) measure of inflation and have been published by the Office for National Statistics.
In each case, the figure is the percentage change in the average price over the 12 months to September 2022.
Low-fat milk 42.1%
Margarine and other vegetable fats 30.5%
Whole milk 30.2%
Jams, marmalades and honey 28.1%
Butter 28.0%
Olive oil 27.2%
Cheese and curd 23.1%
Pasta and couscous 22.7%
Eggs 22.3%
Sauces, condiments, salt, spices and culinary herbs 22.1%
Frozen vegetables other than potatoes 20.3%
Potatoes 19.9%
Ready-made meals 19.0%
Poultry 17.2%
Meat 15.3%
Bread 14.6%
Fish 13.5%
Yoghurt 12.8%
Crisps 11.8%
Edible ices and ice cream 11.5%
Fresh or chilled vegetables other than potatoes 11.1%
Pizza and quiche 9.7%
Fruit 8.8%
Rice 6.8%
Breakfast cereals and other cereal products 6.8%
Confectionery products 6.1%
Sugar 4.7%
Dried fruit and nuts 4.6%
Chocolate 3.3%

If there's a good reason to stop eating shite food that's it right there, good man seafoid

[An Watcher]

Just chocolate for me from now on