Sir Mervyn King doesn’t have to write a letter this quarter, and apparently That’s Good News.
As far as I know inflation is meant to indicate how much more we can expect to spend on stuff next year. (If that’s wrong, please tell me – I sort of need to know for my job.) So inflation dropping from 3.5% to 3% is A Good Thing For Everyone. And it does mean two things:
- If you get any sort of pay rise this year over 3%, it’s actually worth more than it would otherwise have meant. Happy days!
- If you get a pay rise of less than 3% or don’t get a pay rise (in the current climate probably more likely), it means we’re all steadily getting poorer, but less so than we would have otherwise. Not happy days, but better than it could have been.
So how to respond to something like this? Simples. We need to ask the question: can I give more?
What? No, that’s not right, is it? Inflation means that I’m going to have to spend more and you’re suggesting I need to give more as well?
Yes I am. In effect we’ve all been given another 0.5% of our spending back so why not pass that on to those who need it more?
And here’s a naughty little thought: those who need it more are definitely not banks, so how about we all boycott them and stop (a) taking out loans and (b) saving with them.
Ooh, that one’s going to get me in trouble.