The headline figure of 2.3% looks good (remember it's still above target) but the MPC won't
I find it remarkable that the figure is even close to 2% and whether an interest rate cut is delayed a month or two is not as important as the battle to control inflation seems to have been won
I would just add if the BOE had done their job properly interest rates would have been rising longer towards the long term average which we are now seeing
I'm not sure the battle is won. Services inflation is still 5.9%. The headline is being dragged down by energy, which will be transient. Unless services inflation falls back, the headline number will revert back to a too high level once the drop in utility prices falls out.
Services inflation combined with wage inflation is potentially a *good thing* as it further erodes UK private indebtedness, in a way that (imported) goods inflation with wage stagnation was a decidedly bad thing. I don’t think we should worry too much about service sector and wage inflation - it’s those energy and commodity prices we don’t want to see going up again.
Sure, if you don't mind living in an economy with permanently high inflation. In the long run that implies higher real interest rates too, which makes any debt problems worse. Inflation can only ever be a temporary benefit to the economy, in the long run it is a big negative. And looking at the details of these numbers, they're worse than the headline. The BOE will not be cutting rates next month. Or to put it another way, if the BOE cuts rates next month it is a worrying sign that they don't care about inflation.
The real significance of the fall in CPI is that real wages are now rising fast. It won’t be long at the present rates until the long squeeze on wages is set off and we are back to the “normal” of rising living standards.
Of course this is an average. In reality those on minimum wages are already doing better whilst many in the public sector are well behind.
Will any of this feed through in time for the election? I would suspect not. Too many people are still struggling and the mortgage increases will far outweigh these marginal gains.
It's better than it not happening, but won't be enough.
Markets have responded by significantly reducing the likelihood of a rate cut in June. Only 1 or 2 this year.
Not sure that fits in with the Sunak /Moonrabbit plan.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Poland has gone from 50% to 80% of UK per capita GDP in the last ten years PPP. If the trend continues it should overtake the UK within the next ten years.
And of course are dramatically expanding their military. It's almost like somebody wrote an article about it...
Are Lib Dems in London chasing the Conservative vote, as suggested yesterday?
Now - I'm quite cynical about Lib Dem Electioneering, and I think they will pretty much tell anyone whatever they want to hear in order to garner a few votes, including telling voters that they will do the exact opposite in different places. My phrase is "local populism".
Yesterday I picked up an article about Schrodinger's "rogue cyclists" (which I think is an undefined group that voters are supposed to have in their heads and be scared of) from the Ed Lucas the Lib Dem candidate for Cities of Westminster and London. Not as bad as the gunk in the Telegraph, but with distinct notes of Susan Hall type language, claims and prejudices.
(He's kindly answered my slightly sharp comment, so I've got to go back today and do a point-by-point explication.)
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Nor are we living in autarchic isolation either since exports are about 33% of our GDP and imports 38%.
But Remainers or Rejoiners or whatever they are never let facts get in the way of a good rant.
5 million unemployed anyone? House price crash? No foreign alliances or diplomatic agreements?
Always wrong and never learn.
Did you hear the interview? He went well beyond simply saying we’re not rejoining the single market (note the question was about the single market ie EEA, not the EU) and treated us to a bizarre speech on how Britain needs to fix all its domestic woes rather than engaging in international cooperation, as if the two were mutually exclusive.
I’m sure he’ll welcome your support for Labour policy though.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
This is the sorpasso predicted for between 2030 and 2035 based on medium term trends, heralded by Tusk earlier this year.
It may well take longer but Poland’s catch up since 1989 has been simply stunning. And EU membership has propelled it.
It's also on the purchasing power parity basis. GDP per capita in nominal terms is still more than twice as high in the UK than in Poland.
I don't know anything about how the PPP figures are calculated, but a naive interpretation suggests that a huge problem in the UK is simply that everything is more expensive then it ought to be. If a future British government can reduce the cost of living and the cost of doing business (without simply hammering wages) then it would provide a massive boost to the country.
The headline figure of 2.3% looks good (remember it's still above target) but the MPC won't
I find it remarkable that the figure is even close to 2% and whether an interest rate cut is delayed a month or two is not as important as the battle to control inflation seems to have been won
I would just add if the BOE had done their job properly interest rates would have been rising longer towards the long term average which we are now seeing
I'm not sure the battle is won. Services inflation is still 5.9%. The headline is being dragged down by energy, which will be transient. Unless services inflation falls back, the headline number will revert back to a too high level once the drop in utility prices falls out.
Services inflation combined with wage inflation is potentially a *good thing* as it further erodes UK private indebtedness, in a way that (imported) goods inflation with wage stagnation was a decidedly bad thing. I don’t think we should worry too much about service sector and wage inflation - it’s those energy and commodity prices we don’t want to see going up again.
Sure, if you don't mind living in an economy with permanently high inflation. In the long run that implies higher real interest rates too, which makes any debt problems worse. Inflation can only ever be a temporary benefit to the economy, in the long run it is a big negative. And looking at the details of these numbers, they're worse than the headline. The BOE will not be cutting rates next month. Or to put it another way, if the BOE cuts rates next month it is a worrying sign that they don't care about inflation.
Possibly one cut by the end of the year to 5.0%. Possibly none at all. As other posters have mentioned there are lots of factors occurring now/in the pipeline to push inflation up again.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Nor are we living in autarchic isolation either since exports are about 33% of our GDP and imports 38%.
But Remainers or Rejoiners or whatever they are never let facts get in the way of a good rant.
5 million unemployed anyone? House price crash? No foreign alliances or diplomatic agreements?
Always wrong and never learn.
Did you hear the interview? He went well beyond simply saying we’re not rejoining the single market (note the question was about the single market ie EEA, not the EU) and treated us to a bizarre speech on how Britain needs to fix all its domestic woes rather than engaging in international cooperation, as if the two were mutually exclusive.
I’m sure he’ll welcome your support for Labour policy though.
As soon as they get into nr 10 they will encounter reality and subsequently their numbers will drop. Then they will throw red meat at the rejoiners to keep them onside. Also, statista just registered its lowest ever brexit support.....again.... it is simply political gravity. Fact is we have to accept that the first step to reversing brexit is getting the tories out and we will not properly know how labour will govern till they are in office.
Just had one of those brilliant “customer service” calls where I feel sorry for the agent. Mobile number calls. “Hello it’s x from y. We need to book an engineer to upgrade your business electricity meter. It’s already booked No sir it isn’t that’s why we’re calling I read off the booking appointment Ah yes sir that is only booked for one meter we need to do the other. Great! They are already coming No sir we need to book an appointment”
And then painfully run through a script which allows zero flexibility whatsoever. To get a second appointment at the same time as the other on the same day at the same time with the same guy. They’re still insisting I need to complete the form before the work despite it being the exact same details. No sir we can’t just copy it across.
Tell you what, I don’t have time for that. Do what you want. It’s your meter.
The headline figure of 2.3% looks good (remember it's still above target) but the MPC won't
I find it remarkable that the figure is even close to 2% and whether an interest rate cut is delayed a month or two is not as important as the battle to control inflation seems to have been won
I would just add if the BOE had done their job properly interest rates would have been rising longer towards the long term average which we are now seeing
I'm not sure the battle is won. Services inflation is still 5.9%. The headline is being dragged down by energy, which will be transient. Unless services inflation falls back, the headline number will revert back to a too high level once the drop in utility prices falls out.
Services inflation combined with wage inflation is potentially a *good thing* as it further erodes UK private indebtedness, in a way that (imported) goods inflation with wage stagnation was a decidedly bad thing. I don’t think we should worry too much about service sector and wage inflation - it’s those energy and commodity prices we don’t want to see going up again.
Sure, if you don't mind living in an economy with permanently high inflation. In the long run that implies higher real interest rates too, which makes any debt problems worse. Inflation can only ever be a temporary benefit to the economy, in the long run it is a big negative. And looking at the details of these numbers, they're worse than the headline. The BOE will not be cutting rates next month. Or to put it another way, if the BOE cuts rates next month it is a worrying sign that they don't care about inflation.
This doesn’t look permanent. As in the US it’s being a bit more stubborn, but in an economy where wages are rising but goods and commodity prices are flat people’s standard of living rises.
Household net debt fell remarkably during Covid but that’s been accompanied by economic stagnation and soaring government debt as people stopped spending. If we’re not careful we could find ourselves like many other countries in a Japanese spiral.
The BoE almost certainly won’t cut rates next month, but maybe they should. We need economic growth, badly. Once the economy’s growing many other problems fix themselves.
Just had one of those brilliant “customer service” calls where I feel sorry for the agent. Mobile number calls. “Hello it’s x from y. We need to book an engineer to upgrade your business electricity meter. It’s already booked No sir it isn’t that’s why we’re calling I read off the booking appointment Ah yes sir that is only booked for one meter we need to do the other. Great! They are already coming No sir we need to book an appointment”
And then painfully run through a script which allows zero flexibility whatsoever. To get a second appointment at the same time as the other on the same day at the same time with the same guy. They’re still insisting I need to complete the form before the work despite it being the exact same details. No sir we can’t just copy it across.
Tell you what, I don’t have time for that. Do what you want. It’s your meter.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Nor are we living in autarchic isolation either since exports are about 33% of our GDP and imports 38%.
But Remainers or Rejoiners or whatever they are never let facts get in the way of a good rant.
5 million unemployed anyone? House price crash? No foreign alliances or diplomatic agreements?
Always wrong and never learn.
Did you hear the interview? He went well beyond simply saying we’re not rejoining the single market (note the question was about the single market ie EEA, not the EU) and treated us to a bizarre speech on how Britain needs to fix all its domestic woes rather than engaging in international cooperation, as if the two were mutually exclusive.
I’m sure he’ll welcome your support for Labour policy though.
As soon as they get into nr 10 they will encounter reality and subsequently their numbers will drop. Then they will throw red meat at the rejoiners to keep them onside. Also, statista just registered its lowest ever brexit support.....again.... it is simply political gravity. Fact is we have to accept that the first step to reversing brexit is getting the tories out and we will not properly know how labour will govern till they are in office.
It will require an articulate Daisy Cooper-led Lib Dem challenge to keep their feet to the fire.
Labour don’t need to promise rejoin, that would be horrendously distracting and divisive at the moment, they just need to do better than put their fingers in their ears and parrot Daily Mail talking points.
'Then, in 2020, Lehrer put out a statement saying that he had placed everything he ever wrote in the public domain. His lyrics and sheet music are now available for anyone to use or perform without paying royalties. The statement ended: “Don’t send me any money.” This is unheard-of. Famous performers usually maximise their royalties income. In my book about the 60s, I quoted the odd line from songs by the likes of the Beatles and the Rolling Stones, and my horrified publishers took the lot out. The royalties would bankrupt them, they said.'
Tom Lehrer did, of course, not depend on his performances for any income. And, in fact, was only ever a very part time performer (was it 37 concerts)?
But yes, it was still a great gesture. I downloaded several of his songs from his website - not sure if it's still up.
I remember my pretty straight parents slightly shocking themselves by buying bootleg copies of his albums at the market in Singapore on reel to reel tape. I wasn’t allowed to listen to Vatican Rag for some years after. Pollution, Vernon Von Brown and multi nuclear armament were the ones that I enjoyed most at the time.
Janet Yellen, the US treasury secretary, has urged the EU to intervene urgently to dampen the growing export levels of Chinese cut-price green technology including solar panels and wind turbines, pushing European leaders to move to a full-scale trade war.
Wait:
Why would we want to not import cut price solar panels that reduce our dependence on imported oil and gas?
If the Chinese want to sell us solar panels at less than cost, there is no way that is anything other than outstandingly good news for the UK.
Huge question.
One Starmer will face very soon.
Is it Net Zero or protect "out dated" jobs and technologies?
Swing voters in, say, the Midlands know what they want.
And yet, maybe - grab these cheap net zero products and run with it. Certainly AEP at Telegraph thinks so iirc. We are in a massive inflection point and we have lost the first round of solar/EV. Can we catch up with some kind of next gen techology? New types of battery? Technology, markets, capitalism, Schumpeterian growth can be brutal.
But - maybe issues with how labour is used to produce such cheap products?
Who would be a politician in these changing times?
I don't think you can catch up without the industrial foundations. If we saturate our market with cheap imports this has to be done on the understanding that we're never going to be competing with the Chinese on mass market green technologies.
Solar panels are very low tech. And once you reach a certain saturation point, demand is going to drop to essentially zero. So, why on earth would the UK want to subsidise their production.
The reality is that solar is becoming so cheap that it will produce essentially all energy two decades from now. And the panel makers will make essentially no money at all, because it is a low barrier to entry, low margin business.
And there won't be technologies that follow it, because solar is going to produce such a surfeit of energy, that we're not going to need them.
This is a very optimistic take. I hope you're right. I worry that when you factor in all the real costs, solar may still have a long way to go to be competitive.
On what basis ?
Solar LCOE now 29% lower than any fossil fuel option, says EY
Solar is the cheapest new-build electricity in many markets, even amid inflation and price rises, said EY, noting that the global weighted average LCOE for solar is now 29% lower than the cheapest fossil fuel alternative. Large-scale energy storage is also quickly becoming more cost-competitive and sophisticated, it said.
Solar has rapidly fallen in average LCOE globally, from more than $400/MWh in the early 2010s to about $49/MWh in 2022, down 88%. Wind power LCOE has fallen roughly 60% over the same period...
It's only going to get cheaper over time, relative to other energy assets. There are still incremental improvements to be wrung out of cost of materials, panel efficiency and manufacturing efficiency. There's also the possibility down the road of polysilicon ingot production using solar generated power (Saudi Arabia's future industry ?) China will probably reduce its industry subsidies over time, but panel demand and production isn't going to fall over the next decade at least.
The efficiency of generation usage is only going to improve, too - with increasing storage, not least as the number of EVs grows.
What are the counter arguments ?
The counter argument is that renewables are intermittent, not despatchable. Yes, EV batteries will help, but the cost of GW/GWh scale battery storage sites needs to be factored in. And when we have a high pressure system with lots of cloud in January, we'll be buggered if we don't keep paying for thermal plants to sit there ready.
And if we all have to install heat pumps, we'll be cold as well as dark if the power goes off.
The real significance of the fall in CPI is that real wages are now rising fast. It won’t be long at the present rates until the long squeeze on wages is set off and we are back to the “normal” of rising living standards.
Of course this is an average. In reality those on minimum wages are already doing better whilst many in the public sector are well behind.
Will any of this feed through in time for the election? I would suspect not. Too many people are still struggling and the mortgage increases will far outweigh these marginal gains.
It will take time for these real wage gains to offset the previous declines, though. The voters may not have long memories but they're not goldfish.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people anymore, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Could have come out of the mouth of John Redwood.
Yes. It's a particularly stupid comment. But I think it does reveal a hidden truth. Starmer and therefore his Labour party is uninterested in foreign affairs. Remarkably Sunak also has little interest, but delegates to Cameron who seems to be doing a good job. I doubt Lammy will be effective for Starmer. Foreign affairs could trip up the next government I suspect.
Labour's first policy is to win the next election. If they gave the slightest indication of movement towards EU membership or the tabloid toxic thing that goes with it, FoM, they will risk losing it.
The only reason SM/FoM is not toxic now is that neither party of possible government is prepared to talk about its possibility.
The media are dying to have the tiniest crack in that door; once there they will place the issue front centre stage.
The Tory, with social democrat modifications is the only option.
There is no point in thinking that the media or voters are rational about this. They are not.
And yes, it's Labour's own fault for not getting the majority centre in parliament to Brexit to 'Norway for Now' when they had the chance.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people anymore, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Could have come out of the mouth of John Redwood.
That is Labour policy and am surprised Labour supporters object to it
'Then, in 2020, Lehrer put out a statement saying that he had placed everything he ever wrote in the public domain. His lyrics and sheet music are now available for anyone to use or perform without paying royalties. The statement ended: “Don’t send me any money.” This is unheard-of. Famous performers usually maximise their royalties income. In my book about the 60s, I quoted the odd line from songs by the likes of the Beatles and the Rolling Stones, and my horrified publishers took the lot out. The royalties would bankrupt them, they said.'
Tangential.
One of the most public-spirited acts known to me was Banting, Best & McCleod who discovered insulin in ~1922 and were granted a US patent, which they then sold to the University of Toronto for $1 each.
Banting famously said, “Insulin does not belong to me, it belongs to the world.” He wanted everyone who needed it to have access to it.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Poland has gone from 50% to 80% of UK per capita GDP in the last ten years PPP. If the trend continues it should overtake the UK within the next ten years.
It's not far off the point that British plumbers will be mourning the loss of FoM preventing them from moving to Poland...
You're only in demand in other countries if you have a needed skillset.
And that includes language skills.
Now speaking English is a skill which much/most of the younger and more educated European workforce has.
While speaking another European language is something which only minimal amounts of the UK workforce can do.
Which is why the 'lost the right to work in 27 countries' is meaningless in real life.
The real significance of the fall in CPI is that real wages are now rising fast. It won’t be long at the present rates until the long squeeze on wages is set off and we are back to the “normal” of rising living standards.
Of course this is an average. In reality those on minimum wages are already doing better whilst many in the public sector are well behind.
Will any of this feed through in time for the election? I would suspect not. Too many people are still struggling and the mortgage increases will far outweigh these marginal gains.
It's better than it not happening, but won't be enough.
Markets have responded by significantly reducing the likelihood of a rate cut in June. Only 1 or 2 this year.
Not sure that fits in with the Sunak /Moonrabbit plan.
I expect inflation to bounce about from here with as many rises as falls. This is as good as it gets for the government. I was predicting slower and lower falls in interest rates at the start of the year and I’ve not seen anything to change that. My guess would be a quarter in July and that might be it till next year.
You can spot the pensioners who don't have to remortgage on this thread from space
Mortgage holders have benefited from ZIRP for many years while we savers have been punished.
Reverting back to the sort of normal level of interest rates is a good thing.
I never quite get this line. Savers always had the option of investing in productive assets such as equities that performed very well during low interest rates.
Mortgage holders like me in our mid 30s had no benefit from ZIRP. And have no alternative to borrowing now if we want to own a home.
A certain generation benefited from ZIRP mortgages and then higher interest rates on savings now their mortgage is paid off.
The real significance of the fall in CPI is that real wages are now rising fast. It won’t be long at the present rates until the long squeeze on wages is set off and we are back to the “normal” of rising living standards.
Of course this is an average. In reality those on minimum wages are already doing better whilst many in the public sector are well behind.
Will any of this feed through in time for the election? I would suspect not. Too many people are still struggling and the mortgage increases will far outweigh these marginal gains.
It's better than it not happening, but won't be enough.
Markets have responded by significantly reducing the likelihood of a rate cut in June. Only 1 or 2 this year.
Not sure that fits in with the Sunak /Moonrabbit plan.
Sunak/Moonrabbit plan?
It makes me think. Have they ever been in the room at the same time?
The real significance of the fall in CPI is that real wages are now rising fast. It won’t be long at the present rates until the long squeeze on wages is set off and we are back to the “normal” of rising living standards.
Of course this is an average. In reality those on minimum wages are already doing better whilst many in the public sector are well behind.
Will any of this feed through in time for the election? I would suspect not. Too many people are still struggling and the mortgage increases will far outweigh these marginal gains.
It's better than it not happening, but won't be enough.
Markets have responded by significantly reducing the likelihood of a rate cut in June. Only 1 or 2 this year.
Not sure that fits in with the Sunak /Moonrabbit plan.
Sunak/Moonrabbit plan?
It makes me think. Have they ever been in the room at the same time?
And both live in the bit between Tyne and Lea Valley.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people before, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Poland has gone from 50% to 80% of UK per capita GDP in the last ten years PPP. If the trend continues it should overtake the UK within the next ten years.
If.
Poland would also overtake Spain, Italy, France and Germany at different points on the extrapolation.
Which rather damages the 'being in the EU is better' claim.
Of course one way to increase GDP per capita is to restrict immigration to only those who will increase GDP per capita.
Janet Yellen, the US treasury secretary, has urged the EU to intervene urgently to dampen the growing export levels of Chinese cut-price green technology including solar panels and wind turbines, pushing European leaders to move to a full-scale trade war.
Wait:
Why would we want to not import cut price solar panels that reduce our dependence on imported oil and gas?
If the Chinese want to sell us solar panels at less than cost, there is no way that is anything other than outstandingly good news for the UK.
Huge question.
One Starmer will face very soon.
Is it Net Zero or protect "out dated" jobs and technologies?
Swing voters in, say, the Midlands know what they want.
And yet, maybe - grab these cheap net zero products and run with it. Certainly AEP at Telegraph thinks so iirc. We are in a massive inflection point and we have lost the first round of solar/EV. Can we catch up with some kind of next gen techology? New types of battery? Technology, markets, capitalism, Schumpeterian growth can be brutal.
But - maybe issues with how labour is used to produce such cheap products?
Who would be a politician in these changing times?
I don't think you can catch up without the industrial foundations. If we saturate our market with cheap imports this has to be done on the understanding that we're never going to be competing with the Chinese on mass market green technologies.
Solar panels are very low tech. And once you reach a certain saturation point, demand is going to drop to essentially zero. So, why on earth would the UK want to subsidise their production.
The reality is that solar is becoming so cheap that it will produce essentially all energy two decades from now. And the panel makers will make essentially no money at all, because it is a low barrier to entry, low margin business.
And there won't be technologies that follow it, because solar is going to produce such a surfeit of energy, that we're not going to need them.
This is a very optimistic take. I hope you're right. I worry that when you factor in all the real costs, solar may still have a long way to go to be competitive.
On what basis ?
Solar LCOE now 29% lower than any fossil fuel option, says EY
Solar is the cheapest new-build electricity in many markets, even amid inflation and price rises, said EY, noting that the global weighted average LCOE for solar is now 29% lower than the cheapest fossil fuel alternative. Large-scale energy storage is also quickly becoming more cost-competitive and sophisticated, it said.
Solar has rapidly fallen in average LCOE globally, from more than $400/MWh in the early 2010s to about $49/MWh in 2022, down 88%. Wind power LCOE has fallen roughly 60% over the same period...
It's only going to get cheaper over time, relative to other energy assets. There are still incremental improvements to be wrung out of cost of materials, panel efficiency and manufacturing efficiency. There's also the possibility down the road of polysilicon ingot production using solar generated power (Saudi Arabia's future industry ?) China will probably reduce its industry subsidies over time, but panel demand and production isn't going to fall over the next decade at least.
The efficiency of generation usage is only going to improve, too - with increasing storage, not least as the number of EVs grows.
What are the counter arguments ?
The counter argument is that renewables are intermittent, not despatchable. Yes, EV batteries will help, but the cost of GW/GWh scale battery storage sites needs to be factored in. And when we have a high pressure system with lots of cloud in January, we'll be buggered if we don't keep paying for thermal plants to sit there ready.
And if we all have to install heat pumps, we'll be cold as well as dark if the power goes off.
The end state to envisage would be that every home has a 100kWh battery for the home, and a 100kWh battery in the car, that there are masses of other commercial batteries, that we have nuclear and tidal as base load, and large interconnector capacity.
Electricity and energy supply will be a lot more secure than at present, where we have a great big massive point of failure for LNG imports at Milford Haven.
Darren Jones shadow chief sec explaining Labour won’t even consider membership of the single market because “it’s the will of the British people” and “Britain needs to fix all its economic problems first rather than relying on international relationships”.
Well, a. all the polling suggests it’s very much not the will of the British people anymore, b. why the hell are you parroting the populist terminology of Farage? c. Since when was it an economic rule that you have to fix all your issues while living in autarchic isolation before you can countenance entering the single market? Is that how Poland got to be on the cusp of overtaking the UK on GDP per capita?
Could have come out of the mouth of John Redwood.
That is Labour policy and am surprised Labour supporters object to it
Why?
For most of my life, I've been a Conservative supporter, albeit on the wobbly wet edge of things.
Doesn't mean I've supported everything Conservative governments have done, or Conservative oppositions have proposed.
Party support is about best fit, not swallowing the entire package. Isn't it?
Comments
Markets have responded by significantly reducing the likelihood of a rate cut in June. Only 1 or 2 this year.
Not sure that fits in with the Sunak /Moonrabbit plan.
https://www1.politicalbetting.com/index.php/archives/2023/01/29/the-intermarium/
Now - I'm quite cynical about Lib Dem Electioneering, and I think they will pretty much tell anyone whatever they want to hear in order to garner a few votes, including telling voters that they will do the exact opposite in different places. My phrase is "local populism".
Yesterday I picked up an article about Schrodinger's "rogue cyclists" (which I think is an undefined group that voters are supposed to have in their heads and be scared of) from the Ed Lucas the Lib Dem candidate for Cities of Westminster and London. Not as bad as the gunk in the Telegraph, but with distinct notes of Susan Hall type language, claims and prejudices.
(He's kindly answered my slightly sharp comment, so I've got to go back today and do a point-by-point explication.)
This is the piece:
https://archive.ph/hDtvL
I’m sure he’ll welcome your support for Labour policy though.
I don't know anything about how the PPP figures are calculated, but a naive interpretation suggests that a huge problem in the UK is simply that everything is more expensive then it ought to be. If a future British government can reduce the cost of living and the cost of doing business (without simply hammering wages) then it would provide a massive boost to the country.
“Hello it’s x from y. We need to book an engineer to upgrade your business electricity meter.
It’s already booked
No sir it isn’t that’s why we’re calling
I read off the booking appointment
Ah yes sir that is only booked for one meter we need to do the other.
Great! They are already coming
No sir we need to book an appointment”
And then painfully run through a script which allows zero flexibility whatsoever. To get a second appointment at the same time as the other on the same day at the same time with the same guy. They’re still insisting I need to complete the form before the work despite it being the exact same details. No sir we can’t just copy it across.
Tell you what, I don’t have time for that. Do what you want. It’s your meter.
Household net debt fell remarkably during Covid but that’s been accompanied by economic stagnation and soaring government debt as people stopped spending. If we’re not careful we could find ourselves like many other countries in a Japanese spiral.
The BoE almost certainly won’t cut rates next
month, but maybe they should. We need economic growth, badly. Once the economy’s growing many other problems fix themselves.
Labour don’t need to promise rejoin, that would be horrendously distracting and divisive at the moment, they just need to do better than put their fingers in their ears and parrot Daily Mail talking points.
I wasn’t allowed to listen to Vatican Rag for some years after.
Pollution, Vernon Von Brown and multi nuclear armament were the ones that I enjoyed most at the time.
Reverting back to the sort of normal level of interest rates is a good thing.
And if we all have to install heat pumps, we'll be cold as well as dark if the power goes off.
The only reason SM/FoM is not toxic now is that neither party of possible government is prepared to talk about its possibility.
The media are dying to have the tiniest crack in that door; once there they will place the issue front centre stage.
The Tory, with social democrat modifications is the only option.
There is no point in thinking that the media or voters are rational about this. They are not.
And yes, it's Labour's own fault for not getting the majority centre in parliament to Brexit to 'Norway for Now' when they had the chance.
One of the most public-spirited acts known to me was Banting, Best & McCleod who discovered insulin in ~1922 and were granted a US patent, which they then sold to the University of Toronto for $1 each.
Banting famously said, “Insulin does not belong to me, it belongs to the world.” He wanted everyone who needed it to have access to it.
https://www.diabetes.org.uk/our-research/about-our-research/our-impact/discovery-of-insulin
She expressed great sympathy with the fate of the SPMs, but somehow believed that it had nothing to do with her.
And that includes language skills.
Now speaking English is a skill which much/most of the younger and more educated European workforce has.
While speaking another European language is something which only minimal amounts of the UK workforce can do.
Which is why the 'lost the right to work in 27 countries' is meaningless in real life.
I was predicting slower and lower falls in interest rates at the start of the year and I’ve not seen anything to change that. My guess would be a quarter in July and that might be it till next year.
Mortgage holders like me in our mid 30s had no benefit from ZIRP. And have no alternative to borrowing now if we want to own a home.
A certain generation benefited from ZIRP mortgages and then higher interest rates on savings now their mortgage is paid off.
It makes me think. Have they ever been in the room at the same time?
NEW THREAD
Poland would also overtake Spain, Italy, France and Germany at different points on the extrapolation.
Which rather damages the 'being in the EU is better' claim.
Of course one way to increase GDP per capita is to restrict immigration to only those who will increase GDP per capita.
Electricity and energy supply will be a lot more secure than at present, where we have a great big massive point of failure for LNG imports at Milford Haven.
For most of my life, I've been a Conservative supporter, albeit on the wobbly wet edge of things.
Doesn't mean I've supported everything Conservative governments have done, or Conservative oppositions have proposed.
Party support is about best fit, not swallowing the entire package. Isn't it?