Mortgage Rate Rises

[EvilRob]

I don’t see any tangible macro evidence that payrises at that level are having an impact on inflation but of course I could be wrong.

He's the governor of the Bank of England. I sincerely hope he has the evidence, that's his job. If not then he's incompetent and should be replaced.
"Reading the room" is not relevant, the right things need to be done to improve the situation of the people currently being impacted by inflation and pay increases are apparently counter to that.

 

[Richie]

Should have never done the furlough...

I totally agree with you regarding the furlough payments in COVID, when they announced it i thought it was a absolute disaster of a decision.

What would you have done instead of furlough?

 

[Jono8]

Low income households are the ones who are most affected by inflation. What's the point of getting a payrise if it just ends up making you poorer?
Yes policy over the last 15 years or so has led to awful wage growth but you can't waive a magic wand and make the underlying causes of that disappear. It will take years of improved government policy for that.

So the solution is to....make them even poorer by sky rocketing mortgage payments and rents? .....

 

[taB]

Wondering what bridge would be the easiest to throw myself off of

I'm hoping this isn't a serious post. However if you need advise then the Forth bridge is pretty final. I'm currently on holiday with my nephews and their dad went off there a few years ago with a definitive result.

 

[EvilRob]

So the solution is to....make them even poorer by sky rocketing mortgage payments and rents? .....

The situation is completely broken. I think it's about damage limitation I don't think there is a good solution At least not short term.

 

[Jono8]

Well all I can say is it didn’t seem to me like you were reading the room, saying that neither did it seem Bailey was.

I don’t see any tangible macro evidence that payrises at that level are having an impact on inflation but of course I could be wrong.

I agree it’s a policy problem, and we all know about magic wands. He’s guessing that pay restraint will help. That’s a bit of a stretch. That’s why I’m confused that he felt he had to say that and not add something like “and brexit is basically 3% on top”.

It's all pie in the sky pseudo science. It's quite possible that inflation would have come down regardless of interest rates anyway.

 

[CapitalOne]

It's all pie in the sky pseudo science. It's quite possible that inflation would have come down regardless of interest rates anyway.

I don’t quite agree on your first point, because the models always have bias. On your second point, you may well be right as I don’t believe this inflation has much to do with money sloshing around in punters pockets. If you’ve got pounds, you’re getting poorer.

 

[bris]

Do you think BoE chief is right to send out messages about suppressing wage growth?

Basically yes, hard as it is to say.

Wage growth means costs have to go up which in the end means higher prices to even out the higher wages

This pushes up inflation which in turn pushes up interest rates to combat inflation, a bit of a viscous circle really

For interest rates to go down we need to stop spending but its not in our nature, we get cash we spend it, the more the wages the more we spend the higher the interest rate needs to go until the breaking point.

In this case I really do think the breaking point will be a hard recession.

The problem this time round though isn't just luxury goods, we are not out their living it up.

The Rising food and utilities costs which are basically out of our control is pushing up inflation.

The insane profits that the supermarkets and the likes of shell and BP are making proves that we are being forced to spend more on fuel and food than we should be, they are claiming rising costs are to blame but insane profits proves they are lying and simply raking it in for the shareholders.

Its time to take back what Thatcher sold off and bring all back to government control with protections in place to stop the massive profiteering.

Of course that's never going to happen, in government right now we have Sunak who somehow managed to get his wife hundreds of millions in oil contracts on top of the hundreds of millions they got for covid contracts. You really couldn't make this **** up that they get away with it so easy with no oversight to stop it and call it out for what it is, blatant corruption

I'm not sure Starmer would be much better tbh, he couldn't be worse but we cant surely put the tories back in next election, can we?

 

[Brutos]

I am still failing to understand why they keep raising rates if it’s not having the desired effect!!
I feel for people coming off fix mortgages now having to remortgage.
The cynic in me feels like this is an attempt to recoup the money rich property owners loss during covid with repossessions and having these rich owners buy the repossessions.

 

[fez]

I am still failing to understand why they keep raising rates if it’s not having the desired effect!!
I feel for people coming off fix mortgages now having to remortgage.
The cynic in me feels like this is an attempt to recoup the money rich property owners loss during covid with repossessions and having these rich owners buy the repossessions.

The rich generally got a lot richer over COVID and if they had houses already they shot up in value. Anyone with a property empire in the right place is laughing right now with current rents if they are an unscrupulous ****. They interviewed a landlord on something recently and he basically said, my management company said I should probably raise rents because the market would pay it so I did. He didn't even have a mortgage on the property.

 

[EvilRob]

I'm not sure Starmer would be much better tbh, he couldn't be worse but we cant surely put the tories back in next election, can we?

Feel the same way. It's hard to see how the UK is going to become a successful country again for at least a generation if we keep on going like we have and there's nothing to indicate that we're on anything other than that path.

 

[CapitalOne]

Feel the same way. It's hard to see how the UK is going to become a successful country again for at least a generation if we keep on going like we have and there's nothing to indicate that we're on anything other than that path.

Well I agree, and as we are all bored of being told….we voted for it

 

[Dis86]

I can't help but think the BoE are missing the wood for the trees. People aren't over spending on crap. People are buying what they need at increased prices due to rampant profiteering by companies. This is persisting due to utter failure of governance. The BoE are impacting the wrong people.

 

[dowie]

The insane profits that the supermarkets and the likes of shell and BP are making proves that we are being forced to spend more on fuel and food than we should be, they are claiming rising costs are to blame but insane profits proves they are lying and simply raking it in for the shareholders.

U wot m8?

They've been taking a hit on our behalf thanks to rising costs:

Tesco profits halve amid ‘incredibly tough year for customers’

Profits down to £753m as retailer faced operating cost inflation and write down on value of some properties

www.theguardian.com

Profits at Tesco halved last year to £753m in what the grocer called an “incredibly tough year for customers” as it battled “significant operating cost inflation” and wrote down the value of some properties.

Sainsbury's sees fall in pre-tax profit as it reveals how much spent to 'keep prices low' during cost of living crisis

The supermarket says it is "absolutely determined to battle inflation" for its customers.

news.sky.com

Sainsbury's has reported a fall in its pre-tax profit, as it reveals it has spent more than £560m on "keeping our prices low over the last two years".

The supermarket chain said that in the year ending 4 March, its group sales were up 5.4% to £35.15bn, but underlying profit before tax was £690m - down from £730m at the same time last year.

Chief executive Simon Roberts said: "We really get how tough life is for so many households right now which is why we are absolutely determined to battle inflation for our customers.

"Our focus on value has never been greater and we have spent over £560m keeping our prices low over the last two years.

Perhaps you should be a bit more grateful to the execs and shareholders.

 

[Dis86]

U wot m8?

They've been taking a hit on our behalf thanks to rising costs:

Tesco profits halve amid ‘incredibly tough year for customers’

Profits down to £753m as retailer faced operating cost inflation and write down on value of some properties

www.theguardian.com

Sainsbury's sees fall in pre-tax profit as it reveals how much spent to 'keep prices low' during cost of living crisis

The supermarket says it is "absolutely determined to battle inflation" for its customers.

news.sky.com

Perhaps you should be a bit more grateful to the execs and shareholders.

To be fair, build a couple of new stores, refurbish a few older ones, launch a new product line or two and that's going to make your profit look worse. We regularly do such things at work to minimise our tax burden and increase future resilience.
My dad had a record year with his business last year yet made a loss. Why? Because he bought a load of assets.

 

[gazref]

U wot m8?

They've been taking a hit on our behalf thanks to rising costs:

Tesco profits halve amid ‘incredibly tough year for customers’

Profits down to £753m as retailer faced operating cost inflation and write down on value of some properties

www.theguardian.com

Sainsbury's sees fall in pre-tax profit as it reveals how much spent to 'keep prices low' during cost of living crisis

The supermarket says it is "absolutely determined to battle inflation" for its customers.

news.sky.com

Perhaps you should be a bit more grateful to the execs and shareholders.

If you believe that youll also believe Amazon don't pay tax in the UK because they don't make much profit.

Any sensible Government would tax the ******** of these profiteering companies and windfall tax the biggest offenders but this is not a sensible country.

 

[DJMK4]

I can't help but think the BoE are missing the wood for the trees. People aren't over spending on crap. People are buying what they need at increased prices due to rampant profiteering by companies. This is persisting due to utter failure of governance. The BoE are impacting the wrong people.

I'm certainly not overspending, I'm saving !
I really really think the BoE and.the government need investigating big time, not quite sure what they are doing with the rates at the moment but surely there should be a cap?

Not good for those that are coming off fix term

 

[neocon]

Two of the BOE members wanted a higher increase.

What would you have done instead of furlough?

Never locked down in the first place I guess in hindsight. Using some crap model that predicted something that never happened and wrecking the economy.

Japan never locked down. People carried on going to work and school. They have 2-3% inflation.

 

[dowie]

If you believe that youll also believe Amazon don't pay tax in the UK because they don't make much profit.
Any sensible Government would tax the ******** of these profiteering companies and windfall tax the biggest offenders but this is not a sensible country.

Sure, just believe in your conspiracy nonsense instead then... the profits are just magically hidden despite an increase in sales. Any explanation for what they've done with it?

Amazon quite famously pursued a strategy of reinvesting and growing over several years, it's basically AWS that's profitable now and making up for losses elsewhere in the business.

 

[Philtor]

U wot m8?

They've been taking a hit on our behalf thanks to rising costs:

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