Now even the Bank of England admits greedflation is a thing
Phillip Inman
Aha! Now we’ve proof of the iniquities of capitalism!
The data is stark. According to the research, 45% of companies surveyed say they plan to increase their profit margins in the coming 12 months. Almost a third (32%) expect “no material change” to margins and only 23% expect to suffer a fall.
Umm, OK. So they say they’re going to try and increase their margins.
Not all businesses are flourishing. The survey found the weakest firms had survived on profit margins at or below zero for much of the last decade.
Not all of them will succeed.
This means that most British companies, whatever their size, are signalling that though they will benefit from falling costs – for energy in particular – they will not pass that benefit on in the form of price cuts.
Until now, the Bank has brushed off concerns that profiteering by companies has played a big part in the inflation saga. Governor Andrew Bailey has urged workers on many occasions to forgo wage rises to help prevent inflationary pressures building on companies. He expects to see a mechanical reaction, almost as if he is talking about physics and not economics, from wage rises feeding directly into prices.
Yet 21st-century capitalism is anything but mechanical. Firms set prices based on what they can get away with in markets where there is restricted competition and where brands have leverage with consumers.
That capitalists will attempt to increase profits, some capitalists will fail to increase profits, this proves greedflation!
Tossery of Murphy proportions.
Less than half of businesses (45%) expect conditions to improve. Another third are just surviving and a quarter face bankruptcy.
The scary part is that these are people with a major say in the future of the economy.
“and where brands have leverage with consumers.”
If you’re a dumb fuck that buys Nike and iPhones you deserve to be robbed.
See my book “Well That About Wraps it Up for Marxist Theory of Surplus Value.”
Businesses with profit margins below zero plan to improve margins …
Well, it’s either that or bankruptcy and leaving your creditors in the lurch
“Firms set prices based on what they can get away with in markets where there is restricted competition and where brands have leverage with consumers.”
And why is there restricted competition? Because the tossers in government (all colours) have spent the last 30 years putting more and more regulations on businesses, so no one wants to bother starting one any more. Or growing an existing one to the next level. Why wade through oceans of regulatory sh*t only to be taxed at 60% if you manage to make some decent profits? Thats why the UK is in the economic doldrums, the cumulative effect of 30 years of idiot government have finally killed the capitalist economy. All we have now are oligopolies that owe their market position to being protected from new competition by the sea of rules, or vast swathes of the economy that rely entirely on State largesse. There is no competition which is why the consumer can be rooked.
Atlas has finally shrugged.
@Otto You are Oolon Colluphid and I claim my £5.
“Firms set prices based on what they can get away with”. In his mind he’s already got one hand on the Nobel prize for Economics.
Nowt changes. Arguments that I could see through when I was fourteen are still routinely trotted out.
“Why should I have to pay a water bill, rain falls for free?” – that sort of stupid stuff.
On and on and fucking on. People are dim and ignorant and entirely comfortable with it. A week or so ago one twerp explained to me that cars should be powered by burning hydrogen, which would be got by electrolysis, using power from the battery, which would get its electricity from an alternator on the engine.
Work by Threadneedle Street’s own analysts suggest that firms are intending to keep prices high, despite falling costs
Threadneedle Street discovers evidence for a market based economy where people try to rationally maximise their utility, cue: I don’t bloody think
ShariaThe Conservative Party allows it!‘Because the tossers in government (all colours) have spent the last 30 years putting more and more regulations on businesses, so no one wants to bother starting one any more. ‘
That tells the truth all too plainly, Jim.
Did he not stop to consider that the plans to ‘increase profit margins’ may be because the companies’ profit margins are smaller now because they’ve been swallowing some of the effects of inflation – shielding customers from them – under the assumption they were temporary? And now that it looks like this is permanent everyone is looking to re-adjust their operations to take into account the new reality?
dearieme: that’s the shit level of education now. Most of this stuff can be proved or disproved by back of the envelope calculations using O-level physics. But there are so few people who can do that, including most of the decision-makers in this country, EU, US etc. A lot of them think that’s a positive attribute too!
CP Snow was right all those years ago.
People want more money. So do firms.
The data is so stark it’s bleedin’ obvious.
Why is the BoE employing tossers to measure this?
Owen Glendower: I can call creatures from the vasty deep!
Hal (or someone): Why so can I and so can any man, but will they come when you do call them?
All businesses want to rise prices, Some find their market evaporates when they do, so they are often cautious. The future is not spreadsheet predictable.
Of course, the way to avoid greedflation is to nationalise everything the way Karl wanted. You have to appoint a socialist government, mind.
The greatest socialist invention the world has ever seen would not be killing people were it not for the AUSTERITY practised by the evil Tories for 13 years. Well, not intentionally anyway…