Column: Nigel Sillis
Labour costs are rising even though labour is no more scarce. How is this happening?
The young lady who does my ironing - for the avoidance of doubt, this is not my wife - has posted a note through my door. If I wish to continue availing myself of her 'collection and drop-off' service then, unfortunately, her weekly fee must rise by around 10%. It's fuel prices, you see!
A simple anecdote, but it contains two key issues:
- The transmission mechanism between headline and core inflation.
- The nature of fixed versus variable costs.
Firstly inflation. The consensus is that rising
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