Posted by Keith Wyles on 05/01/2023 13:01:45:
The biggest change causing the rise is the cost of energy. May go down long term, but with the push to make it greener , possibly unlikely. Whenever I buy anything I tend to buy in bulk as a future buffer against rising costs. It does mean that I have much that I will never use, but it has saved me money overall.
Or maybe not! Whilst the cost of energy doesn't help, it's just one of many factors driving the global economy.
Focussing on the UK, this graph shows the value of the pound has been falling since the 13th century!
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The graph goes up to 2019, since when the value of the pound has fallen even more sharply. The decision to leave the EU and Covid have had a much larger impact on costs in recent years than Green. Inflation is at a 50 year high, between 5% and 18% depending on what you have to buy or sell. It's a mixed and hideously complicated story, house prices are slowly falling, but food and material prices are rising sharply. The ability of the private sector to pass inflationary price rises on to customers has resulted in a rash of public sector strikes, because their pay lags a couple of years behind the rest of the labour market. Nurse either strike or leave and work for the NHS via an Agency. Ironically, the government can't afford to pay nurses directly, but it can afford to pay the higher rates charged by Agencies. And this despite Agency staff being less effective, because they lose continuity and team spirit due to being used to fill gaps.
Interesting discussion this morning on the radio about the US Coal Industry. Lots of coal in the US, but the industry is struggling despite strong verbal support and anti-green action from President Trump throughout his term.
In practice the politics is almost irrelevant, US coal is currently caught between a rock and a hard place. The rock is the availability of cheap gas in the US. Not only cheap, but much cleaner and easier to use than solid fuel. The hard place is the rapid rise of cheap green electricity in the US because it's commercially profitable: 8 times more green installed under Trump (anti) than Obama (pro).
The market drives prices, not politicians. In the case of US Coal, customers prefer cheap clean energy to a dirty fuel that costs more.
The same sort of forces drive other costs in much the same way. Prices are rising in the UK partly because the whole world is chasing commodities in short supply, an issue related to Covid, and partly because the failure of certain politically motivated actions undermined the UK economy.
Blaming prices rises on Green doesn't help because the real problem is far more complicated!
Dave