[Re: Was the Bank of England’s MPC right to leave UK monetary policy unchanged yesterday? Friday]
Vicky Redwood argues that inflation concerns are overdone because “wage growth has ground to a halt”. Well of course: wages respond slowly to increases in the money supply as they have to be negotiated upwards. This happens infrequently, and wage earners tend to suffer the loss of purchasing power for years first. Asset prices – housing costs, energy bills, imports – all respond quickly to inflation. To be clear when wages go up it’s a good thing; when the cost of living goes up it’s not. Even if Redwood was right her priorities would still be back to front.
[Re: Contradictory UK childcare policy won’t halt the rising costs for parents, Friday]
The row that has been running for weeks and weeks between the coalition partners is indeed a contentious issue. Britain may have half the number of child minders since late 1990s, but at the same time house prices have tripled. This means that if a young couple wants to own a family home, there is very likely an imperative that both work full time to scrape enough together to afford one. Many young mothers (and fathers) have been deprived the option of being their own child minder. And yet, 90 per cent of UK land remains green space.
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