Quote:
Originally Posted by Chrysalis
Sounds like a sales pitch for government policy.
Rising interest rates by its nature is designed to increase poverty and unemployment, as it has long been believed a poorer population reduces inflation via lower demand for goods. A banker even admitted this not that long ago in an interview in America when pushed hard on it. But even without doing so it is obvious, raising interest rates causes financial misery.
So why is he blaming early retirement? With more people unemployed there is less spending power, which based on the basic principles of inflation will lower inflation, the only reason I can think off is the government asked him to back up their policy.
Early retirement isnt even the main reason for increased job vacancies, the primary cause is the zero asylum and cancellation of freedom of movement policies. Blaming the sick, and people who have retired is a distraction.
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What he said was two contradictory things...
Quote:
Mr Bailey said that people taking early retirement are spending savings to maintain their lifestyle, maintaining demand in the economy, at the same time as dropping out of the workforce and reducing the supply of labour.
This combination of a shrinking workforce and higher spending by retirees in turn is driving up prices, forcing the Bank ot raise interest rates more swiftly.
He said: “The rise in economic inactivity is a change to the supply of labour, independent of demand, in particular by older workers.
“If those workers have accumulated enough savings to sustain a desired level of consumption much like the one they had before their early retirement, at least for a while, aggregate demand will not have fallen by as much as aggregate supply.
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I'm not a big fan of anecdata, but since we retired, we are spending less (to live within our means), so eating out a lot less, and only dipping into our savings for fixes to the home (replacement side fence, five replacement double glazed panes, etc.). OK, we had four holidays abroad last year, but that was to make up for not having any for two years...