Energy Bills

[hippo]

On 30/06/2022 at 21:17, foreveryoung said:

One of my clients today mentioned, the big haulage companies who buy there own fuel are seeing a huge drop in fuel costs, they are just not being passed on to the public. Not sure the truth in this, surely they wouldn't still charge us top money at the pumps??

The low value of sterling v the dollar has an impact.

[hippo]

7 hours ago, Genie said:

The public are having the piss taken out of them by energy providers.

Martin Lewis or somebody needs to explain what’s going on here.

We have been told that we need to pay much more for gas, electric, petrol and diesel because of supply issues, post-covid demand, the war in Ukraine etc etc etc but all that seems to be happening is the suppliers have used those things to crank up their margins.

The UK government (I know haha) should start by rejecting any increases to the fuel cap in October. 

As an aside - I don't know how Martin Lewis has the rep he does - a lot of his information is impractical if not useless and some of it just plain wrong.

This week he highlighted an investment fund which if you invest at least £50 now - you will get a free £50 in 12 months. However it's a capital at risk investment

[bickster]

21 hours ago, Genie said:

My fuel light is on, about 60 miles. I need to do a proper drive on Tuesday, i’m gonna wait till Monday night and hope. Cheapest near me is 195.7

I just bought £20 worth at that price, thats the cheapest I've seen for a few weeks, however, I am seeing a little glimmer of a reduction here and there. The most expensive was 205.9 and its now the cheapeast near me at 197.9 (Cheaper than tesco)

[Davkaus]

6 minutes ago, hippo said:

As an aside - I don't know how Martin Lewis has the rep he does - a lot of his information is impractical if not useless and some of it just plain wrong.

This week he highlighted an investment fund which if you invest at least £50 now - you will get a free £50 in 12 months. However it's a capital at risk investment

It was a good deal tbf. Wealthify's funds are globally diversified index funds, so if if you lose anything more than a few quid on the invested capital, we're going to be in for bigger problems than losing some of our £50, and they called out that there is a risk of not getting the cashback if Wealthify goes bust in the next 12 months.

Straight up doubling your money over 12 months assuming the markets flat line is hard to say no to, and they called out the risks responsibly, IMO.

Obviously, Wealthify isn't a particularly good platform, and they're hoping to hook you in and earn more than that £50 from expensive fees in their managed funds, so it's certainly not for me as a long term investment platform.

[hippo]

1 minute ago, Davkaus said:

It was a good deal tbf. Wealthify's funds are globally diversified index funds, so if if you lose anything more than a few quid on the invested capital, we're going to be in for bigger problems than losing some of our £50, and they called out that there is a risk of not getting the cashback if Wealthify goes bust in the next 12 months.

Straight up doubling your money over 12 months assuming the markets flat line is hard to say no to, and they called out the risks responsibly, IMO.

Obviously, Wealthify isn't a particularly good platform, and they're hoping to hook you in and earn more than that £50 from expensive fees in their managed funds, so it's certainly not for me as a long term investment platform.

Ok fair enough. 

They did highlight the risk as you correctly say.

Personally I think it's leading people (maybe those who can least afford it) into risky investments.

 

[Genie]

39 minutes ago, bickster said:

I just bought £20 worth at that price, thats the cheapest I've seen for a few weeks, however, I am seeing a little glimmer of a reduction here and there. The most expensive was 205.9 and its now the cheapeast near me at 197.9 (Cheaper than tesco)

I had to cave in and buy today as I’m out and about tomorrow. Didn’t go mad, hopefully we see some drops next week.

[tinker]

13 hours ago, Genie said:

For us last year it was pre-agreed July RPI +0.5% this year but it’s looking unaffordable. It would be well over 12%. Maybe closer to 14%.
Theres a counter offer of 6% + £5k being tabled but i’m not sure how it’s going to go. There will be a vote on it in the coming weeks. >12% is good and all, but I’d also like to still have a job in 5 years time.

Mmmm have they put the prices of  their goods services or products up to cover inflation? My guess is they have or they will do. If they negotiated a deal are they willing to give back some of the concessions they asked for when they negotiated this RPI +0.5% deal, I bet they haven't. 

Inflation should not be paid for by squeezing the workers , big businesses want it that way, they want us to all pay for it while they increase profits by RPI by increasing there final sale price or fee by RPI. It's all a big lie and a way to squeeze more for less out of the working class. 

Talk about making strikes illegal as well, the mind boggles at how we have got where we are, slavery is on its way back by stealth. 

[Davkaus]

3 hours ago, tinker said:

Mmmm have they put the prices of  their goods services or products up to cover inflation? My guess is they have or they will do.

Good scam, isn't it. RPI rising is a direct consequence of everyone putting their prices up, it's the measure of consumer-facing price increases. Yet they use that measure as a justification to put their prices up again.

[blandy]

21 minutes ago, Davkaus said:

Good scam, isn't it. RPI rising is a direct consequence of everyone putting their prices up, it's the measure of consumer-facing price increases. Yet they use that measure as a justification to put their prices up again.

It's not altogether a scam, though. Oil goes up, so diesel goes up, so haulage costs go up, so the price of stuff hauled goes up, so wages go up (or workers leave), so the cost of hiring Labour goes up, so the cost of goods goes up...and then the cost of services goes up and etc. and then interest rates go up to dampen demand, but higher interest rates mean higher borrowing costs which means higher prices....

There's a bunch of profiteering and margin widening going on, but inflationary spirals are as old as the hills.

[CVByrne]

The difference between now and the 1970s inflation is back then we all ended up in a prices v wages spiral where one would chase the other and then fuel the next round of it. This time wages on averages won't grow even half  as much as this years inflation rate. Along with the interest rate rises and the natural forces which will drive energy and food prices back down (increase production to capitalise on the high prices drives those prices back down). The recession we'll enter into this year should stamp down on the remaining parts of inflation (restaurants, hotels etc..). 

I think by this time next year we'll be back to growth and inflation will have dropped dramatically. 

[foreveryoung]

2 minutes ago, CVByrne said:

The difference between now and the 1970s inflation is back then we all ended up in a prices v wages spiral where one would chase the other and then fuel the next round of it. This time wages on averages won't grow even half  as much as this years inflation rate. Along with the interest rate rises and the natural forces which will drive energy and food prices back down (increase production to capitalise on the high prices drives those prices back down). The recession we'll enter into this year should stamp down on the remaining parts of inflation (restaurants, hotels etc..). 

I think by this time next year we'll be back to growth and inflation will have dropped dramatically. 

Really? This leveling up project by the government has never been so far away. The huge corporates and fat cats are getting richer by the day and screwing the lower classes. No top brass in the government has ever known the true price of a bottle of milk admittedly, but I never have I known in my lifetime the government to be so far away or disinterested from the financial reality of what's going on.

For me, it's all excuses to claw money back for the government, while the big companies are loving the conservatives for allowing for obscene profiteering while this 'project' is running.

[CVByrne]

2 minutes ago, foreveryoung said:

Really? This leveling up project by the government has never been so far away. The huge corporates and fat cats are getting richer by the day and screwing the lower classes. No top brass in the government has ever known the true price of a bottle of milk admittedly, but I never have I known in my lifetime the government to be so far away or disinterested from the financial reality of what's going on.

For me, it's all excuses to claw money back for the government, while the big companies are loving the conservatives for allowing for obscene profiteering while this 'project' is running.

The government are irrelevant in this situation. They have essentially zero power to affect inflation or the coming recession. Central banks are raising the interest rates to curb inflation and cause a short (they hope) recession.

Yes, inflation is in part caused by the massive money printing and furlough schemes where Governments paid people to stay at home during Covid. This bit of inflation and its gap to real wage growth is the tax we have to pay (in part) for that. 

[foreveryoung]

4 minutes ago, CVByrne said:

The government are irrelevant in this situation. They have essentially zero power to affect inflation or the coming recession. Central banks are raising the interest rates to curb inflation and cause a short (they hope) recession.

Yes, inflation is in part caused by the massive money printing and furlough schemes where Governments paid people to stay at home during Covid. This bit of inflation and its gap to real wage growth is the tax we have to pay (in part) for that. 

I wouldn't say they are irrelevant at all. They can play a huge part in bringing inflation down.

[CVByrne]

35 minutes ago, foreveryoung said:

I wouldn't say they are irrelevant at all. They can play a huge part in bringing inflation down.

Can you elaborate for me how they can do that? Giving support to homes to lessen the impact of the energy bills doesn't affect inflation 

[tinker]

37 minutes ago, CVByrne said:

Can you elaborate for me how they can do that? Giving support to homes to lessen the impact of the energy bills doesn't affect inflation 

I can, tax is a percentage, prices go up  tax revenues go up, especially with energy as 40% of the price we pay is tax or vat. The retailer for fuel makes very little in comparison , the big winner is the government in tax revenues. How much of the the energy cost is made up of workers wages? Very little I would guess but they won't get their share of the prices increase , it will go to the business owners and governments as they will say they can't afford to give the worker the RPI rate, despite raising the final prices by RPI. 

The government could either limit the amount of tax and vat they take from energy or tie the fuel price to the cost of a barrel rather that let market forces (greed) dictate the price.

[blandy]

1 hour ago, CVByrne said:

inflation is in part caused by the massive money printing and furlough schemes where Governments paid people to stay at home during Covid

Why do you think that? Normally, I would agree, where a gov't basically prints a ton of extra money and it goes into circulation, then absolutely this would fuel inflation, but the furlough money replaced wages with 80% of wages - it moved a wage burden from businesses who had no income to the state, so people were worse off, but not driven completely skint - so the actual amount of money in circulation didn't go up. Thus furlough I'm not sure fuelled inflation at all.

This inflation bubble is pretty much worldwide and certainly pan European and is IMO caused by the combo of people spending following being confined to home, Energy price rises as a result of the war in Ukraine, the situation in China where shipping and manufacturing was (and still is ) badly impacted by their extremely strict Covid restrictions, which has led to a global shortage of all kinds of stuff, from microchips to steel goods to toys, to whatever - all the stuff China makes for cheap. And then there's Brexit, for the UK, which has resulted in severe labour shortages, across the board and in key areas like haulage and travel (as we're seeing) though these are also apparent to a lesser extent elsewhere, as people decided they didn't want to go back to crap low paid jobs, or full time in the office type work, or that they could earn more money in other sectors, or that they can't be doing with the extra admin and paperwork due to Brexit.

[foreveryoung]

Noticing Supermarket fuels more expensive than ya Shell and Esso's now???

[Genie]

If 1 supermarket breaks from the pack the prices will tumble.

Places like Morrisons and Tesco aren’t even doing the 5p and 10p off a litre promo’s anymore. 

[CVByrne]

17 hours ago, blandy said:

Why do you think that? Normally, I would agree, where a gov't basically prints a ton of extra money and it goes into circulation, then absolutely this would fuel inflation, but the furlough money replaced wages with 80% of wages - it moved a wage burden from businesses who had no income to the state, so people were worse off, but not driven completely skint - so the actual amount of money in circulation didn't go up. Thus furlough I'm not sure fuelled inflation at all.

This inflation bubble is pretty much worldwide and certainly pan European and is IMO caused by the combo of people spending following being confined to home, Energy price rises as a result of the war in Ukraine, the situation in China where shipping and manufacturing was (and still is ) badly impacted by their extremely strict Covid restrictions, which has led to a global shortage of all kinds of stuff, from microchips to steel goods to toys, to whatever - all the stuff China makes for cheap. And then there's Brexit, for the UK, which has resulted in severe labour shortages, across the board and in key areas like haulage and travel (as we're seeing) though these are also apparent to a lesser extent elsewhere, as people decided they didn't want to go back to crap low paid jobs, or full time in the office type work, or that they could earn more money in other sectors, or that they can't be doing with the extra admin and paperwork due to Brexit.

We have a set amount of goods and services in the country/world. Call that number 1000. We had at beginning of 2020 say 2400 bln pounds in existence. Over the last decade or so the Bank of England has bit by bit printed money and grown the money supply between 2010 and 2020 it grew from 2100 to 2400 so a 14% increase in a decade. This is because disinflationary forces have held sway. Globalisation has reduced costs, fracking has reduced energy costs, wage growth has stagnated and corporate profits hold sway for all companies. So printing money causes a bit of inflation to counteract that

Pandemic hits. It forces governments to intervene in the economy like never before. They rightly subsidise wages, give government backed loans to companies etc. So in the space of a year or so the central banks has printed 25% more of all the pounds in existence and sent it out to people and companies, 2400 is now 3000, that's double the amount of pounds printed in a year than was printed in a decade. But we still have 1000 amount of stuff. Add to that, demand isn't curtailed like in a normal recession, demand is pent up. So now the lockdowns and curbs on society end. People go back to life and they want to do everything, buy everything do life. This massive glut of demand causes inflation in normal times. But now we've 25% more money in existence and still 1000 amount of stuff, the cost of that stuff will rise a lot because there is a lot more money in existence to buy the same amount of stuff. 

So we have lots more money and we have huge pent up demand unleased at the same time. Biggest inflationary wave that can hit the global economy is unleashed. Now the governments of the world wanted some inflation - transitory inflation - because it's essentially the secret tax. If I owe 1bln pounds to be paid back in 30 years. If I have lots of inflation over that time, the purchasing power of the pound is reduced and the size of the economy grows in nominal terms but it's not grown in real terms. The currency is just devalued and so when I pay it back it's worth a lot less per pound than it was when I borrowed it. 

When all currencies are feeling inflation because all central banks printed so much money it's not too bad for governments. Nobody can lose faith in your economy and your currency because everyone is having inflation. But we all get to benefit from the devaluing of all our currencies at the same time and the value of what we owe. The people who will take the cost of this are the people of those economies, us. My monthly pay buys me less stuff than it did in 2020. 

[CVByrne]

I explained what would happen just over a year ago in the investing thread, pages 22 and 23