Inflation to fall dramatically?

Purple

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Inflation hurts lower earners by more.
I went back to Tesco to buy a pack of posh nuts, was 300c.
Now its 375c, so I walked away.
You might say, big deal, you are a tightwad.
My point is.. you fight inflation at a personal level.
The input costs to produce those nuts has increased, as have the overheads of everyone in the supply chain. Tesco aren't profiteering, they are reflecting those increases. What you have outlined is the business cycle and why inflation is mainly self correcting as it usually causes recessions.
Where the real damage is done is when governments try to hold off the recession and make the downside worse.
 

peemac

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The premise of the thread was that some in the ECB, and particularly Philip Lane, may persuade other members to hold back on going too high on interest rates to allow for the current increases to take effect and also take note that input costs will start dropping.

Some financial commentators are now suggesting that there will be just one further 0.5% rate hike before the ECB takes a pause.
 

MrEarl

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Here's hoping... I think everyone is noticing the overall pinch from price inflation, alongside recent interest rate hikes, and not forgetting the opportunists who participate in Ripping Off Ireland.

With Christmas this close, its likely that many consumers will still spend a bit more than they can afford, so it would be super if we could hold off on further rate hikes until around March, next year (wishful thinking, unfortunately ).
 

joe sod

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But the US interest rates will be 4.5 to 5 % before they maybe halting next year, another 0.5% will only bring the ECB to 2% that's still too low and too high a differential between US rates.
Philip lane was wrong last year when he said that interest rates would not be rising so I think his influence within the ECB board would probably have fallen. Even Christine lagarde on the late late show a few weeks ago was re emphasizing that her key focus now was to fight inflation, she kept emphasizing that
 

Purple

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But the US interest rates will be 4.5 to 5 % before they maybe halting next year, another 0.5% will only bring the ECB to 2% that's still too low and too high a differential between US rates.
Philip lane was wrong last year when he said that interest rates would not be rising so I think his influence within the ECB board would probably have fallen. Even Christine lagarde on the late late show a few weeks ago was re emphasizing that her key focus now was to fight inflation, she kept emphasizing that
The head of Austria's Central Bank and member of the Board of the ECB Robert Holzmann said that he backs a 0.75% rate rise in December.
Isabel Schnabel, an ECB executive board member, also backed a 0.75% rise in December. She pointed out that the current energy subsidies being put in place to limit the impact of energy prices is inflationary.

Sorry lads, the government isn't your Mammy and it can't shelter you from everything. Not even your Mammy can really do that. There's a war on and it's going to mean some minor hardship. We'll just have to put on our big boy pants and deal with it.
 

Delboy

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But the US interest rates will be 4.5 to 5 % before they maybe halting next year, another 0.5% will only bring the ECB to 2% that's still too low and too high a differential between US rates.
Philip lane was wrong last year when he said that interest rates would not be rising so I think his influence within the ECB board would probably have fallen. Even Christine lagarde on the late late show a few weeks ago was re emphasizing that her key focus now was to fight inflation, she kept emphasizing that
Lagarde also said she didn't know where this inflation surge had come from. It had appeared from nowhere!

She shouldn't have to emphasise her focus is to fight inflation...it's a core mandate of the ECB. It's a given
 

joe sod

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Lagarde also said she didn't know where this inflation surge had come from. It had appeared from nowhere!

She shouldn't have to emphasise her focus is to fight inflation...it's a core mandate of the ECB. It's a given
because she knew that the ECB and others were the causes of it by printing all that money especially during Covid, she has to feign innocence about the whole thing now
 

noproblem

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Lagarde also said she didn't know where this inflation surge had come from. It had appeared from nowhere!

She shouldn't have to emphasise her focus is to fight inflation...it's a core mandate of the ECB. It's a given
Am I the only one who feels she comes across as not knowing very much at all, apart from where she left the fake tan bottle.
 

AlbacoreA

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I think prices are strong for all the above reasons, but retailers and suppliers are also trying to increase or maintain profitability. Its noticeable how few Black Friday deals there were.
 

AlbacoreA

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Looking at few financial sites suggest its falling due to fear of recession. Might be temporary fall.
 

noproblem

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Still can't understand how diesel and home heating oil are so dear. Dollar is down, brent crude is way down, refining costs are way down but the price is still out of order. Amazing how at least 2 of the biggest retail stations can sell at their pumps in different areas for substantially different prices in diesel and petrol, yet their heating oil price is exactly the same everywhere. We're told there's no price fixing? I would seriously question that.
 

T McGibney

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Still can't understand how diesel and home heating oil are so dear. Dollar is down, brent crude is way down, refining costs are way down but the price is still out of order. Amazing how at least 2 of the biggest retail stations can sell at their pumps in different areas for substantially different prices in diesel and petrol, yet their heating oil price is exactly the same everywhere. We're told there's no price fixing? I would seriously question that.
When you're part of an oligopoly, you don't even have to fix prices to get what you want.
 

joe sod

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You also have to remember that taxes are much higher on fuel than they were the last time the prices peaked in 2008. Back then oil went to 147 dollars a barrel but diesel was only 145 cent a litre. Now oil 70 to 80 dollars a barrel and diesel 185 cent a litre.
Also exchange rate with dollar is a factor aswell but governments are taking much higher taxes.
Where are they going to get this revenue if people switch to electric cars (although I think its going to happen much slower than people think)
 

peemac

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Still can't understand how diesel and home heating oil are so dear. Dollar is down, brent crude is way down, refining costs are way down but the price is still out of order. Amazing how at least 2 of the biggest retail stations can sell at their pumps in different areas for substantially different prices in diesel and petrol, yet their heating oil price is exactly the same everywhere. We're told there's no price fixing? I would seriously question that.
Refining costs are currently $45, oil is $85, dollar is at $1.04. So 80c per litre. (159L in a barrel)
11c carbon tax, so 91c ex vat a litre landed.

Let's give 12c for importer and local distributor combined. That's €1.03. Add 13.5% vat and you are at €1160 for 1,000 litres.

About €60-€80 goes to the local distributor to pay the driver delivering to you.
 

FCBC12

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Refining costs are currently $45, oil is $85, dollar is at $1.04. So 80c per litre. (159L in a barrel)
11c carbon tax, so 91c ex vat a litre landed.

Let's give 12c for importer and local distributor combined. That's €1.03. Add 13.5% vat and you are at €1160 for 1,000 litres.

About €60-€80 goes to the local distributor to pay the driver delivering to you.
Hi peemac,

What is your source for the refining cost? Would it be the same cost to produce diesel for cars?
 

FANTANA

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Most of Europe’s diesel came from Russia, Primorsk to Rotterdam. This was a very short voyage and shipping it pre war was relatively cheap. Now the diesel is coming from further a field to make up the difference, increasing tonne miles (a metric of how many miles a tonne of cargo was shipped). Tanker freight costs have exploded recently which combined with increased mileage is significantly increasing the shipping costs of diesel. Gasoline has not been hit as badly as far less of it came from Russia, but keep in mind when you refine different products from crude you can change the ratios slightly but you can’t just say I want loads of diesel and no Gasoilne, naptha, Jet etc. these products need to be stored or moved on ships. Every ship that move gasoline is one less to move diesel further increasing diesel tightness and increasing the shipping cost as the shipper has less vessels to choose from and the Owner can name their price.
 

peemac

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Hi peemac,

What is your source for the refining cost? Would it be the same cost to produce diesel for cars?
Thompson Reuters give average market price.
It's an estimate as it's not the official Platts price but will be in the region.

The refining cost today for diesel/ kero is quoted at $47, for petrol it's $13.

Historically diesel refining was $10 and petrol about $12 which is why diesel is currently about 15c higher than petrol even though duty is lower.


On the original topic, inflation is cooling and there are the first signs of potential talks on Ukraine.

If you are a glass half full type person, you'd be hoping that things will be quite good in late spring.
 
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