Scrutable

Bird on a Fire wrote: ↑

Fri Jan 28, 2022 3:02 pm

It's a less rosy picture at Asda, where she shops - loads of Smart Price products disappearing
https://twitter.com/BootstrapCook/statu ... xxh7w&s=19

That's a completely irrelevant picture at Asda. What is being checked is whether an exact named item from 2019 is still available. All that matters is whether there is an equivalent product at an equivalent price. There is no need for it to have the exact same name. The same applies to Sainsburys. The picture of a page from a notebook shows lemons at 22p each sold in packs of five as Sainsburys Basics. Those are not available today, but instead you have Imperfectly Tasty Lemons x 5 for 68p. That's 13.6p each, so cheaper. The fact that they's sold under a different name is irrelevant.

But it goes further than that. This approach assumes the buyers have a wealthy mindset. Like Howard Hughes, they want a specific thing and they buy it regardless of the price. He wanted a discontinued ice cream, so had a custom order made at great expense. A poor person cannot afford to be obsessed with getting exactly what they got last week, the week before, and so back to time immemorial. They switch depending on what is cheaper at the time they shop. They look for offers - BOGOF or discounts on specific sizes or on brands being promoted. Assuming that you can calculate a poor person's inflation by having a fixed basket of goods is stupid.

Gfamily wrote: ↑

Fri Jan 28, 2022 1:33 am

f.cks sake!
What's the minimum order for a tescasda/sainsborrisorisons.com order?
Serious question.

There isn't one. You can just walk in and buy any single item.

Millennie Al wrote: ↑

Sat Jan 29, 2022 3:15 am

Gfamily wrote: ↑

Fri Jan 28, 2022 1:33 am

f.cks sake!
What's the minimum order for a tescasda/sainsborrisorisons.com order?
Serious question.

There isn't one. You can just walk in and buy any single item.

Reading .comprehension lessons needed?

Above inflation rises in a number of essentials according to the Graun.

Factors include climate-related shortages of durum wheat and oilseeds, fertilizer up because of gas prices and increased labour costs in the meat industry.
https://www.theguardian.com/business/20 ... -is-rising

monkey wrote: ↑

Fri Jan 28, 2022 3:03 am

Gfamily wrote: ↑

Fri Jan 28, 2022 1:33 am

f.cks sake!
What's the minimum order for a tescasda/sainsborrisorisons.com order?
Serious question.

I looked up Sainsbury's. They say

Delivery Charges

Orders under £40 will be charged £7 for standard delivery
Orders over £40 will vary between £1- £4.50.
Minimum order value £25​

Couldn't be bothered looking at others.

£2.95 for orders under £30 from Aldi.

And that's for delivery in up to a few days time. So you better have food in the cupboard.

I don't really want to get mired in the inflation/average stuff but just to say that looking at income only e.g. whether someone works full time isn't a whole lot of good unless you also take debts, loans etc into consideration as well as standard outgoings. Honestly I'm not sure how that pans out population wise, I can't look into it now, but just wanted to mention it.

discovolante wrote: ↑

Sat Jan 29, 2022 7:26 pm

I don't really want to get mired in the inflation/average stuff but just to say that looking at income only e.g. whether someone works full time isn't a whole lot of good unless you also take debts, loans etc into consideration as well as standard outgoings. Honestly I'm not sure how that pans out population wise, I can't look into it now, but just wanted to mention it.

Following on from this, this is a relevant article.

Families hit by the cost-of-living crisis are being targeted by credit firms offering “buy now, pay later” deals on weekly groceries, pet food and hot drinks.

Shoppers are urged to spread their payments for staple foods and treats to help cope with “these difficult times”. One promotion states: “Regardless of your credit rating, we will offer you a tonne of credit to do your shopping with.”
...
The Treasury is to publish proposals later this year on regulating the sector, which is not covered by consumer credit laws because no interest is charged on the debt. Some of the firms do charge transaction fees and penalties for late payments.

One in three buy now, pay later users have missed a payment or made a late one, according to a report published last year by the welfare charity Citizens Advice. The report found consumers using the credit products had also been charged £39m in late fees over one year.

Iceland seem to be quite heavily involved,

The UK firm Zilch, which describes itself as the “fintech darling of the UK”, is one of the first buy now, pay later providers to be operating with consumer credit authorisation from the Financial Conduct Authority (FCA), but faces scrutiny over its promotion of its product for groceries, beverages and home-delivered food...

The firm was last week advertising buy now, pay later at Iceland. Two large salmon fillets were promoted for a “1st payment” of £1.50; a box of 40 pouches of Winalot dog food was promoted for a “1st payment” of £2.25; and a carton of 24 cans of Whites fizzy lemonade was promoted for a “1st payment” of £1.75. The remaining balance of the shelf price is paid over six weeks.

Every little helps, as they say. The higher cost of credit for the bottom 20% is another poverty tax so it's encouraging to see simple and cheap offerings becoming available. Get these offerings properly regulated and there's a lot to like.

Obviously a big part of cheap grocery shopping is taking advantage of big packs, 3 for price of 2 offers, and buying double when a product is on offer one week and buying zero the next week. Credit enables this - but many people literally don't have the kitchen storage space. A big sack of rice is one thing, but having two packets of cornflakes, two jars of curry sauce and so on presents a physical problem.

But generally speaking, for the organised shopper (such as those who track prices in notebooks) the arrival of very cheap credit is excellent news. In theory a once a month massive shop at the cheapest store can replace multiple trips to the more expensive nearby store, yet with the money still going out on a weekly timetable.

And it enables one off events - a birthday treat for the kids with a Dominos takeaway can be covered over several weeks. I suspect this is actually how these offerings will be used, because spreading the load of one-off/unexpected spend is so tough without cheap credit.

lpm wrote: ↑

Sun Jan 30, 2022 10:41 am

And it enables one off events - a birthday treat for the kids with a Dominos takeaway can be covered over several weeks. I suspect this is actually how these offerings will be used, because spreading the load of one-off/unexpected spend is so tough without cheap credit.

For predictable events, credit is usually an unnecessary (but very attractive) expense. If you save £1 per week to save for a brithday, you'll have £52 plus interest, while if you pay on credit, the same £1 per week lets you buy £52 less interest. Although interest rates are currently very low, loans have an overhead to arrange, so will incur significant cost. So cheap credit can easily make people poorer. The effect is amplified if it tempts them into miscalulation of what they can afford and the interest payments get out of hand.

Millennie Al wrote: ↑

Mon Jan 31, 2022 3:03 am

lpm wrote: ↑

Sun Jan 30, 2022 10:41 am

And it enables one off events - a birthday treat for the kids with a Dominos takeaway can be covered over several weeks. I suspect this is actually how these offerings will be used, because spreading the load of one-off/unexpected spend is so tough without cheap credit.

For predictable events, credit is usually an unnecessary (but very attractive) expense. If you save £1 per week to save for a brithday, you'll have £52 plus interest, while if you pay on credit, the same £1 per week lets you buy £52 less interest. Although interest rates are currently very low, loans have an overhead to arrange, so will incur significant cost. So cheap credit can easily make people poorer. The effect is amplified if it tempts them into miscalulation of what they can afford and the interest payments get out of hand.

Credit is still important for unexpected expenses, and its another way that being poor is expensive.

A well off person can get short term credit almost for free (just pay off the credit card in a few weeks time when the next bill comes in and don't pay any interest). Whereas the alternative for someone without a credit card is often a high interest payday loan. If someone needs longer term credit a secured loan will probably be at 3-4% interest or less, whereas an unsecured loan will cost ten times as much.

Real interest rates are of course negative. These short term instalment deals are at zero or low rates, partly subsidised by those who handle them badly.

For anyone who can borrow cheaply, particularly anyone with a fixed mortgage, inflation is going to erode debt quite significantly. 2.8% offers are still out there for short term loans. Borrow £10,000 for 5 years and total interest is only £718, compared to debt erosion of about £1,300 at 5% inflation.

There are interesting arbitrage possibilities at the moment, for example sell a used car now for crazy current prices, buy a new car on very low interest PCP terms, sell that car in a few years after inflation's done its work. Negative real interest rates implies we should all consider how to bring spend forward.

This burst of inflation is going to have different impacts, depending more on personal circumstances than average deciles. The minimum wage is going up by 6.6% in April. The Universal Credit allowance is increasing by 8% or 14%, plus the taper rate going from 63p to 55p - for the working poor these changes offset the £20 cut in UC. Public sector pay rises will give a cut in real wages, private sector might be higher than inflation.

When you have a very large fixed outgoing in a mortgage it's often easy for a price rise at inflation to leave you better off, despite higher National Insurance and energy bills, and despite general inflation. For a typical household with a largish mortgage I reckon it's a 2x to 3x multiplier - a pay rise of 5% translates into a post tax, post mortgage pay rise of 10% to 15%. Of course energy bills are going to eat a lot of that away. But about 75% of UK mortgages are fixed rate and this is a major softening of the cost of living blow.

Woodchopper wrote: ↑

Mon Jan 31, 2022 8:19 am

Millennie Al wrote: ↑

Mon Jan 31, 2022 3:03 am

lpm wrote: ↑

Sun Jan 30, 2022 10:41 am

And it enables one off events - a birthday treat for the kids with a Dominos takeaway can be covered over several weeks. I suspect this is actually how these offerings will be used, because spreading the load of one-off/unexpected spend is so tough without cheap credit.

For predictable events, credit is usually an unnecessary (but very attractive) expense. If you save £1 per week to save for a brithday, you'll have £52 plus interest, while if you pay on credit, the same £1 per week lets you buy £52 less interest. Although interest rates are currently very low, loans have an overhead to arrange, so will incur significant cost. So cheap credit can easily make people poorer. The effect is amplified if it tempts them into miscalulation of what they can afford and the interest payments get out of hand.

Credit is still important for unexpected expenses, and its another way that being poor is expensive.

A well off person can get short term credit almost for free (just pay off the credit card in a few weeks time when the next bill comes in and don't pay any interest). Whereas the alternative for someone without a credit card is often a high interest payday loan. If someone needs longer term credit a secured loan will probably be at 3-4% interest or less, whereas an unsecured loan will cost ten times as much.

And a poor person who is struggling to buy enough food is very likely to have a one off expense, or get their benefits sanctioned*, and miss a payment, triggering charges, even on 0% loans like the Iceland ones mentioned here.

*Probably for such crimes as being on a bus that broke down on the way to the job centre, or not being able to get through on a telephone line at the appointed time, or under the new rules, being poor.

54% increase in gas and electricity.

This is the awful blow to the first two deciles.

It's back to the bad old days of only heating a single room.

The "average house" metric seems a dud way to look at it. But I think it means variable prices will be:

Electricity - from 21p/22p to approx 33p per kwh

Gas - from 3.9p to 6.0p per kwh

Digging into the Ofgem stuff, looks like slightly better for electricity and worse for gas.

Depends on region, and assuming paying by DD, but appears to be

Electricity - 28p per kwh

Gas - 7p per kwh

The cost of living crisis for various salaries going up by 6.6%.

£20,000 pa

+£898 post tax pay rise
-£130 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£418 pa = £8 extra per week to pay for inflation in groceries etc

£30,000 pa

+£1,347 post tax pay rise
-£255 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£742 pa = £14 extra per week to pay for inflation in groceries etc

£50,000 pa

+£1,941 post tax pay rise
-£505 NI tax increase
-£700 energy bills
+£0 Council Tax rebate
+£200 energy loan in October

+£936 pa = £18 extra per week to pay for inflation in groceries etc

Conclusions: if you've got a badly insulated home and a high gas bill you're screwed. If you don't get a 6.6% pay rise you're screwed. If you're on a variable rate mortgage you're screwed. If you're comfortably off you'll still need to cut back on some luxuries. We're not as rich as we thought we were.

So, looks like that recent pay rise I got will be in one hand and straight out the other.

Have to say I was listening to Sunak at lunchtime and laughed more than a little at Peter Bone's question.

TopBadger wrote: ↑

Thu Feb 03, 2022 3:15 pm

So, looks like that recent pay rise I got will be in one hand and straight out the other.

Yes, in real terms average earnings have recently fallen to about the same level as in 2007, as was recently reported on the news. But unemotional statements like that don't tend to hit the fan as loudly as a £700 average increase in gas bills.

It is indeed the low end that suffers the most. They are the most likely to be in badly insulated premises, which they can't do anything about because they are owned by crap landlords (both private and public sector) who provide them with poorly insulated buildings and costly heating systems.

What really ought to happen as a minimum is that benefits for the unwaged and low-waged are increased so as to preserve the inflation-adjusted value of their income, as measured by an inflation index that relates to the cost of living increase that is experienced by that class of people.

If a government was really interested in actually levelling up, that group of people should have an increase in benefits that raised their income above the rate of inflation, and, more than that, above the rate of any net increase in real incomes experienced by the wealthier half of the population.

But what we get instead is a hotchpotch of dubious measures that are complex to administer, insufficiently targeted on those who most need them, and fall well short of relieiving the cost of living increase for those who suffer it most. Why aren't I surprised?

lpm wrote: ↑

Thu Feb 03, 2022 12:33 pm

The cost of living crisis for various salaries going up by 6.6%.

£20,000 pa

+£898 post tax pay rise
-£130 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£418 pa = £8 extra per week to pay for inflation in groceries etc

£30,000 pa

+£1,347 post tax pay rise
-£255 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£742 pa = £14 extra per week to pay for inflation in groceries etc

£50,000 pa

+£1,941 post tax pay rise
-£505 NI tax increase
-£700 energy bills
+£0 Council Tax rebate
+£200 energy loan in October

+£936 pa = £18 extra per week to pay for inflation in groceries etc

Conclusions: if you've got a badly insulated home and a high gas bill you're screwed. If you don't get a 6.6% pay rise you're screwed. If you're on a variable rate mortgage you're screwed. If you're comfortably off you'll still need to cut back on some luxuries. We're not as rich as we thought we were.

Apparently we're not allowed to ask for pay rises https://www.bbc.co.uk/news/business-60206564

Do your patriotic duty, peasant.

Stephanie wrote: ↑

Thu Feb 03, 2022 5:25 pm

Apparently we're not allowed to ask for pay rises https://www.bbc.co.uk/news/business-60206564

Governer of Bank of England tells workers not to ask for pay rises. Pope tells people not to ask for abortions. Bears carry on sh.tting in the woods.

IvanV wrote: ↑

Thu Feb 03, 2022 6:03 pm

Stephanie wrote: ↑

Thu Feb 03, 2022 5:25 pm

Apparently we're not allowed to ask for pay rises https://www.bbc.co.uk/news/business-60206564

Governer of Bank of England tells workers not to ask for pay rises. Pope tells people not to ask for abortions. Bears carry on sh.tting in the woods.

Did we mention that the Pope recently told people to pay taxes?

shpalman wrote: ↑

Thu Feb 03, 2022 6:06 pm

IvanV wrote: ↑

Thu Feb 03, 2022 6:03 pm

Stephanie wrote: ↑

Thu Feb 03, 2022 5:25 pm

Apparently we're not allowed to ask for pay rises https://www.bbc.co.uk/news/business-60206564

Governer of Bank of England tells workers not to ask for pay rises. Pope tells people not to ask for abortions. Bears carry on sh.tting in the woods.

DId we mention that the Pope recently told people to pay taxes?

That’s one of the bits of Christian theology that Constantine liked.

Stephanie wrote: ↑

Thu Feb 03, 2022 5:25 pm

lpm wrote: ↑

Thu Feb 03, 2022 12:33 pm

The cost of living crisis for various salaries going up by 6.6%.

£20,000 pa

+£898 post tax pay rise
-£130 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£418 pa = £8 extra per week to pay for inflation in groceries etc

£30,000 pa

+£1,347 post tax pay rise
-£255 NI tax increase
-£700 energy bills
+£150 Council Tax rebate
+£200 energy loan in October

+£742 pa = £14 extra per week to pay for inflation in groceries etc

£50,000 pa

+£1,941 post tax pay rise
-£505 NI tax increase
-£700 energy bills
+£0 Council Tax rebate
+£200 energy loan in October

+£936 pa = £18 extra per week to pay for inflation in groceries etc

Conclusions: if you've got a badly insulated home and a high gas bill you're screwed. If you don't get a 6.6% pay rise you're screwed. If you're on a variable rate mortgage you're screwed. If you're comfortably off you'll still need to cut back on some luxuries. We're not as rich as we thought we were.

Apparently we're not allowed to ask for pay rises https://www.bbc.co.uk/news/business-60206564

Well I'm glad that the Bank of England understands the power of collective action anyway.

Don't worry, the government knows what to do about increasing energy bills.

Sciolus wrote: ↑

Thu Feb 03, 2022 8:52 pm

Don't worry, the government knows what to do about increasing energy bills.

The fun question in this scheme is how are the government going to handle repayments to these loans fairly?

Can't do it by property, as properties change hands, including to people who aren't even renting right now (students, children)
Can't do it by person, because then you could avoid repayment by changing the named person on the account, unless you have to repay in full when the account changes. Which then impacts people who move regularly the most, who are more likely to be poorer.
Can't do it by raising the standing charges, because then you are charging people who aren't currently paying bills for loans other people got - effectively just delaying inflation.