Petrol - isnt this where fears of inflation started? There's all you
need to take your kids to school, we are told, it's in the country
somewhere, just not in the right places. So it's only haulage.
Later,
we are told it is a multitude of small, short-term issues, of which
panic-buying fuel is but the latest, and once we're through we'll be in
global-Britain times enjoying our prosperity, power and independence to
the max.
But will we? As it feels as though the situation is
worsening, with bad surprises flying in every week. And for the causes,
don't look local, because these are global supply chain problems. Of
course.
Looking at why the army is being sent in and why
temporary visas (as it is only a short-term problem) are being issued
(and already extended):
working conditions, pay, red tape, laziness
and over-sensitivities, many drivers quitting because of the lockdowns,
not training up new HGV operators, and not women, Brexit causing many to
return home, giving a shortage of 100,000 drivers. That's a lot and you
do wonder what the RHA has been doing - all asleep in their cabs!
We
are talking about logistics for retail food and fuel, but that's not
all. What we are talking about is shipping costs, and gas price rises
and a drop in sterling, we're concerned about inflation and interest
rates, tax rises both 2.5% NI (yes, 2.5%) and local authority tax rises,
and ultimately how all this joins up to the medium and long term as
concerns the EU FTA, the break-up of the kingdom, and beyond that to
recession, debt-collapse, climate change, migrations, the rise of China.
We can imagine low interest rates and high inflation, followed by high interest rates and recession. If high-wage, capital is going to replace labour and put those low-wage often immigrant, workers on the dole, at taxpayer expense.
It's a lot for Boris to think about (we are getting into a cult figure status).
Can
we see what's happening through this glare of more and more short-term
problems? Saunders is interesting
https://www.telegraph.co.uk/business/2021/10/09/brace-interest-rate-rises-warns-bank-england-rate-setter/?li_source=LI&li_medium=liftigniter-rhr.
Oil prices have reached a three year
high, $80 a barrel, and climbing thanks to output disruptions and this
high demand. Traditional oil companies are selling out and investing in
green, adding to supply problems and green is much more expensive.
Germany is now back to relying on coal and on Putin!
Then
there's the construction sector where more than one in three businesses
can't get the materials, goods and services they need within the UK. How
will a young person rehab the flat they've just bought? What effect on
the target of 300,000 housing starts?
The gas surge closed two of
the UK’s big industrial fertiliser plants in a completely unexpected and
inflationary surprise, showing graphically how everything is connected
to everything and everywhere there are knife-edges,resulting in more
govt takeover in the "market" economy and state aid and yet more
borrowing.
Food prices and staples. Commodities. Is this the start of a new supercycle?
So now we have inflation at 4 per cent for the
short-term, plus a possible base rate rise early next year, possibly even
this year 2021. America same same. Plus if we enter the land of 5% inflation
there will be the threat to stock markets, not just imminent tapering.
Still,
no significant upturn in unemployment nor substantial corporate
distress. Only inflation, supply difficulties that threaten the economic
recovery (which is already faltering).
And what about the jobs of
those coming off furlough? Will they want to back to work? Will
employers have work for them? Given the worsening outlook.
Only
worries and questions. No real answers. Yet everyone is talking of
recession. And the Prince of Norway offers the UK help with food and
fuel. That's quite humiliating.
Sort out the short term, the
central bank needs to say no interest rate rises medium term, but the
long term is surely out of the hands of management or politicians.
