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Inflation linked price rises

That's not how inflation works

You can't just arbitrarily raise your prices every year by the amount of inflation because you feel like it.

Inflation is just a measure of how much prices across the board have risen naturally due to many different factors, it's not for you (mainly phone companies now) to decide you want to raise my contracted bill amount by. Just because the pride of turnips and bricks have gone up doesn't mean phone bills need to too
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Quote:
Originally Posted by Greener123 View Post
That's not how inflation works

You can't just arbitrarily raise your prices every year by the amount of inflation because you feel like it.

Inflation is just a measure of how much prices across the board have risen naturally due to many different factors, it's not for you (mainly phone companies now) to decide you want to raise my contracted bill amount by. Just because the pride of turnips and bricks have gone up doesn't mean phone bills need to too

You are correct in that a business using a measure of consumer price inflation makes no sense. It's a business - its likely operating cost increases have little to no link to consumer price inflation.

However, inflation actually refers to an increase in the money supply in excess of any increase in the value of goods and services in the economy. It's not prices that rise "naturally", it's the amount of money in the system that gets inflated deliberately and unnaturally. Extreme forms of this are known as "quantitative easing" or "helicopter money". It's Keynesian economic twaddle, but governments love it as it allows them to inflate away their debt, but we all pay for it.

Natural price increases are always relative. No natural factor is going to make all prices rise consistently. Natural factors make the prices of some goods and services rise and fall relative to others. The only factor that causes a consistent underlying rise in prices is an expansion of the money supply.
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Is this a banking joke?



I don't get it.




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It's not a joke. It's the most basic of economics. Which is why it is ignored by 90% of economists, as it's much more lucrative to tell fairy tales than to tell the truth.
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The title appears to be misleading if it about telecommunications companies. Their prices are not inflation linked.

Your choice if a company is raising prices is to switch to a competing supplier with better prices.

If you have tied yourself into a contract which allows a company to raise prices on you in order to get an overpriced shiny phone for a subsidised price then it is entirely your own fault.
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All of them do it now idiot
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It's like rail fares, increase price by rpi+2%... Why is inflation even a factor
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The rail fare increase is a formula set by the regulator in theory to enable private companies to invest in the rail infrastructure as our government won't do it. How much goes to that vs shareholders I have no idea but that is why RPI + 2% appears there.
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Quote:
Originally Posted by Giorget2 View Post
It's not a joke. It's the most basic of economics. Which is why it is ignored by 90% of economists, as it's much more lucrative to tell fairy tales than to tell the truth.
No wonder I sucked at economics, all theory and no reality
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Quote:
Originally Posted by Greener123 View Post
That's not how inflation works

You can't just arbitrarily raise your prices every year by the amount of inflation because you feel like it.

Inflation is just a measure of how much prices across the board have risen naturally due to many different factors, it's not for you (mainly phone companies now) to decide you want to raise my contracted bill amount by. Just because the pride of turnips and bricks have gone up doesn't mean phone bills need to too
Bet you've never turned down an inflation linked pay rise!
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Originally Posted by 8CRED View Post
Bet you've never turned down an inflation linked pay rise!
In the case of a pay rise, the consumer price inflation would be relevant, as the person getting paid is a consumer and spends his or her money on the items in the consumer price index basket.

You don't see the phone company going out buying bread and milk and beer...
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can someone explain why the NHS workers have not been given an inflation related pay-rise for the last 5 years?

we are still waiting for the 1% that was eventually offered last year...
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ECB has just cut basic rates means euro currency would go weaker long term.
Brits would need less pounds to buy euro stuff make inflation lower, which is not good for your production.
Giulia would be cheaper definitely.
Watch Carney next steps.
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It's chicken and egg really as the inflation index is based on ....... Price increases.
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Quote:
Originally Posted by Giorget2 View Post
In the case of a pay rise, the consumer price inflation would be relevant, as the person getting paid is a consumer and spends his or her money on the items in the consumer price index basket.

You don't see the phone company going out buying bread and milk and beer...
Indeed you don't. BUT you might see their employees wanting to do so. So the Company will increase their pay & pass the costs to their customers thus increasing the Retail price of their product.

Plus the consumer price index basket includes Mobile phones.

[ARCHIVED CONTENT] What makes up the basket of goods infographic - ONS
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Quote:
Originally Posted by 8CRED View Post
Bet you've never turned down an inflation linked pay rise!
Earnings has its own index - used to be called 'national average earnings'

This index typically was assumed to grow by RPI+2% !!! ...that was the benchmark for wage negotiations.
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Originally Posted by stan laurel View Post
can someone explain why the NHS workers have not been given an inflation related pay-rise for the last 5 years?

we are still waiting for the 1% that was eventually offered last year...
You've just been awarded another 1% haven't you? That's 2%. That's economics.

Greedy bastids
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@ Mr Green, as Idiot says, vote with your feet, choose another provider.

Don't they give you the option to move without penalty if they change your terms and conditions?
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Originally Posted by Verbout View Post
You've just been awarded another 1% haven't you? That's 2%. That's economics.

Greedy bastids
Awarding and paying out are two completely different matters!
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Awarding and paying out are two completely different matters!
Oh, I know, but it's back dated.
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I don't know how to spend my £200 when it eventually comes...maybe i'll use it to buy some shares in Jeremy's new NHS project.
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Quote:
Originally Posted by 8CRED View Post
Indeed you don't. BUT you might see their employees wanting to do so. So the Company will increase their pay & pass the costs to their customers thus increasing the Retail price of their product.

Plus the consumer price index basket includes Mobile phones.

[ARCHIVED CONTENT] What makes up the basket of goods infographic - ONS
Of course there is some overlap. People buy automotive fuel, for example, and companies do too. Companies have staff costs as an input, which can be affected indirectly by consumer prices.
The overlap isn't 100%, though. The consumer price index isn't even applicable to all consumers. When it's only running at 0,5% or whatever it is in the UK, it doesn't really mattery much, though. Try 6,2% on for size
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Originally Posted by Giorget2 View Post
Of course there is some overlap. People buy automotive fuel, for example, and companies do too. Companies have staff costs as an input, which can be affected indirectly by consumer prices.
The overlap isn't 100%, though. The consumer price index isn't even applicable to all consumers. When it's only running at 0,5% or whatever it is in the UK, it doesn't really mattery much, though. Try 6,2% on for size
I can remember 16%. We got a 10% pay rise and 5 extra days holiday to make up which could be commuted for cash at the end of the year. A few years later and the new MD believed said we were working too hard and should take the full allowance or it would be lost as they would no longer pay the cash equivalent.
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Quote:
Originally Posted by 8CRED View Post
Bet you've never turned down an inflation linked pay rise!
I wish I'd even been offered an inflation linked pay rise!
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