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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