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    And what do you think will happen to the inflation level in lets say, a year's time?
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    Cost push inflation innit. That and the increase in the money supply through quantative easing.
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    according to my econ class
    its cost push inflation and other external factors which we cant control
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    The price of everything has been soaring in recent months. Oil has pushed petrol up about 23p higher than 6 months ago which pushes food and clothing prices up then the transport companies have to put their prices up just to keep afloat.

    The Government didn't help by putting VAT up to 20% either.

    They say inflation will come back down to 2-2.5% next year but I doubt that, prices would have to come back down and stay down and that doesn't look likely with fuel predicted to be £1.50+ per litre within a few months, again pushing the cost of everything else up with it,
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    VAT rise is built in, and oil prices have risen.
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    Inflation will keep rising regardless of what the politicians say. Government has no or little control over inflation.
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    World demand for food, oil and metals is increasing, their prices go up. We import this stuff so have little control over it.
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    People have no reason to save due to low interest rates, its cheap to borrow then before, therefore people are spending more, demand goes up which supply cant meet, so price goes up. Also people are buying more imports causing import penetration, it mayb imports r getting more expensive and that our demand for imports are very inelastic.
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    (Original post by CalB92)

    They say inflation will come back down to 2-2.5% next year but I doubt that, prices would have to come back down and stay down
    you do realise that inflation of 2% still means prices going up on average by 2%.

    I don't understand what you were trying to say here?
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    (Original post by danny111)
    you do realise that inflation of 2% still means prices going up on average by 2%.

    I don't understand what you were trying to say here?
    Sorry but I'm going to need some proof of that!
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    (Original post by yoyo462001)
    Sorry but I'm going to need some proof of that!
    http://en.wikipedia.org/wiki/Inflation
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    Still not swayed. I don't believe Inflation is equal to its definition :naughty:
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    All the money that was printed though Quanititative Easing is now sloshing around in commodities markets which is pushing up prices.

    That is my reckon.
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    The reason is that the demand for raw materials and commodities such as oil or gas is on the high. Simple economic theory would tell you that as demand increases, so does the price. The fact that we use all these raw materials and commodities, we as in the business in the UK and the people in 1 form or another (as the final product or the raw material) means that we also have to pay these higher prices. The source of the higher demand is coming from the emerging economies such as India and China. Not to mention the fact that there is a limited amount oil left in the world.
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    In a word, commodity prices ..oh noes that's two words

    nowt to do with QE tho, until asset prices revitalise (**** knows when that'll be with the economy flatlining), and little to do with low interest rates as growth (and specifically the 'recovery' shift in aggregate demand) is negligable

    I saw stagflation as a strong future possibility back in 2008, remember discussing it with a member of E&Y ITEM club at the time of the crunch but he was fairly dismissive of the idea, pitty tha fool! :mrt:

    ITEM Club Outlook for 2011 seems reasonably sound tho :holmes:
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    (Original post by yoyo462001)
    Still not swayed. I don't believe Inflation is equal to its definition :naughty:
    http://www.amazon.co.uk/General-Theo.../dp/1573921394


    http://www.amazon.co.uk/Unemployment...1701386&sr=1-1

    take your pick
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    Cost push inflation and low interest rates blah blah blah. It's not that bad to be honest, given we just came out a recession.
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    I found this author approached the subject in question very well not to mention the superb use of mathematical techniques.
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    (Original post by yoyo462001)
    I found this author approached the subject in question very well not to mention the superb use of mathematical techniques.
    You have reached the limit of how many posts you can rate today!
 
 
 
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