Quote Originally Posted by Geoff Parkstone View Post
Inflation of any form makes people feel poorer but still have the same, or maybe more, disposable income if they have a tax cut. Thus they will spend more. They will change what they spend it on - the second car may go, the private education go, or they just wont eat but from a macro economic perspective, the consistent spending (coupled with withdrawals from savings) should stimulate the economy as the circulation of money does that (and also creates more inflation)

I hear what you say about "feeling poorer" but people dont cut spending in these circumstances, they actually increase it if they can, or they redirect it
I’m honestly at a loss to understand where you’re coming from on this one, GP.

You’re the expert, but to me it’s as simple as this...if, not entirely hypothetically in the current circumstances, tax cuts make some one £1200 pounds per year better off but their mortgage payments increase by £200 per month then ultimately, and which ever way you dress it up, they are £100 per month worse off and they will not just ‘feel’ poorer but will actually be poorer and will have to cut their spending, on everything other than their mortgage, accordingly.

They can’t, in your words, ‘still have the same, or maybe more disposable income’ if the extra amount they’re expected to spend on mortgage repayments and other cost of living increases exceeds the amount they gain via tax cuts and frankly I’m astonished you’re attempting to argue otherwise.