Energy Prices (Strictly NO referrals!)

[purplesky]

How many people are on tracker mortgages with significant debt though?

As long as you are not up to your eyeballs with mortgage borrowing, you can deal with higher rates at the end of a fixed term by remortgaging over a longer period. While that is a sticking plaster at best, it might mean you can keep your house in the medium to long term.

Absolutely. @Richie seems to think I take delight in interest rate rises hurting others. Interest rates have been extremely low for a very long period of time, and so it is not unreasonable to expect them to continue to increase. But, I'm afraid to say, those people who can't service their debt today will likely never be able to in the foreseeable future, not unless their wages increase substantially or they win the lottery. There's more chance of job losses anyway whilst inflation rages, more so with unsustainably low rates.

I doubt many people want to pay more for fuel and food just to keep some over-leveraged individuals stay in a house they can barely afford. If history is anything to go by, we know where things are headed. Also people need to take personal responsibility for their poor decisions and lack of financial acumen.

 

[danlightbulb]

doubt many people want to pay more for fuel and food just to keep some over-leveraged individuals stay in a house they can barely afford. If history is anything to go by, we know where things are headed. Also people need to take personal responsibility for their poor decisions and lack of financial

That's not a fair statement.

People, normal working people, have had to stretch themselves to get a house or be faced with renting for a lifetime paying someone elses. An essential thing. You think people want to max out their max possible mortgage budget? Or have 30-35 year terms? Or pay 20% over asking prices when there's not enough houses to go around?

Low interest rates over a decade or more have allowed people to borrow more and more, which combined with low supply has driven prices up and up and forcing people to max themselves.

This is not the fault of normal people like us we are just pawns in this big game being played by vested interests the whole time.

 

[Deleted member 236143]

simply in the light of energy companies posting huge profits
in these turbulent times
clearly not suffering but just pushing the cost up for us poor saps to pay
when are we gonna start buying balaclavas from wish! for a quid!
and AK 47s from China!
and start ******* BP up!!

 

[chrcoluk]

I'm sure I've said this before, but you know they don't set the price right? It is determined by the market. Tell me which business is not going to sell to the highest bidder? We compete with the world.

Without tax fuel would be sub £1/litre even with these rises. Perfectly reasonable. Govt intervention is needed as this is crippling the economy but they are too busy investigating their paltry 5p duty cut and painting retailers as the bad guy.

It is determined by the seller, the owner of the business (or who he/she employs to carry out the task) chooses whether to push for the maximum market rates or be satisfied with lower levels of profits. There is no one pointing a gun to their heads and saying you must sell at the highest possible rate.

To me its simple, selling at "the highest price the market can tolerate" is a profiteering practice, however of course its 100% legal and within entities rights to do that.

I do agree on the 5p cut malarkey its their usual distraction tactic. I did say (and others did) at the time it was announced it was a joke of a cut.

My concern about rises continuing for the foreseeable is based on this, I think its possible pre craziness there may have been a hesitancy to increase prices with fear of losing custom and been undercut, that fear might be gone now and its proven to be more profitable to push the market, if I am right then we in for a very different future and look at how volatile prices ae now at the wholesale level. Its like a stock market where buyers are fighting with sellers for the best possible deal.

 

[chrcoluk]

Damn its near the 5 year low!

Maybe there will be a 0.5 jump seeing as:
-Everyone has been given 400 per household
-there is no meeting in July
-we're screwed if they do it or don't

Its a pick your poison moment. Plus we know rate rises "will" increase those costs, whilst there is less assurance of any recovery on the currency.

 

[chrcoluk]

BofE heads are on a chopping block.
Made policy error after error since 2008. Had multiple opportunities to correct, and now here we all are. The Fed realised their mistakes and are acting - late, but finally.

If the BofE don't keep up, everyone should look forward to food and energy prices 3 or 4 times today's cost. All whilst living in their £5M house of course.
Tik Tok.

You are blaming 15 years of low interest rates on the 2022 inflation?

 

[200sols]

Its a pick your poison moment. Plus we know rate rises "will" increase those costs, whilst there is less assurance of any recovery on the currency.

Not really, the currency must be defended at all costs.

A dovish 25bp rise today would be nothing short of catastrophic for sterling.

 

[200sols]

It is determined by the seller, the owner of the business (or who he/she employs to carry out the task) chooses whether to push for the maximum market rates or be satisfied with lower levels of profits. There is no one pointing a gun to their heads and saying you must sell at the highest possible rate.

To me its simple, selling at "the highest price the market can tolerate" is a profiteering practice, however of course its 100% legal and within entities rights to do that.

I do agree on the 5p cut malarkey its their usual distraction tactic. I did say (and others did) at the time it was announced it was a joke of a cut.

My concern about rises continuing for the foreseeable is based on this, I think its possible pre craziness there may have been a hesitancy to increase prices with fear of losing custom and been undercut, that fear might be gone now and its proven to be more profitable to push the market, if I am right then we in for a very different future and look at how volatile prices ae now at the wholesale level. Its like a stock market where buyers are fighting with sellers for the best possible deal.

They don't 'raise prices' its all done by traders and bots. Its not like they all sit in an office and say right well jack up prices 50% today and see if the plebs take it.

 

[Uther]

Not really, the currency must be defended at all costs.

A dovish 25bp rise today would be nothing short of catastrophic for sterling.

They probably need to at least match what the fed did yesterday but the country would go into meltdown.

 

[413x]

It'll be 0.5 won't it. Feels like it has to be

 

[Mercenary Keyboard Warrior]

That's not a fair statement.

People, normal working people, have had to stretch themselves to get a house or be faced with renting for a lifetime paying someone elses. An essential thing. You think people want to max out their max possible mortgage budget? Or have 30-35 year terms? Or pay 20% over asking prices when there's not enough houses to go around?

Low interest rates over a decade or more have allowed people to borrow more and more, which combined with low supply has driven prices up and up and forcing people to max themselves.

This is not the fault of normal people like us we are just pawns in this big game being played by vested interests the whole time.

I agree mainly.
Simply the housing market with its lack of housing will flex to the affordability point, of course individuals choose at what level they join, and the vast majority choose that point as the maximum.

FWIW I dont think its ever been any different. In the 35 years approx I have been associated with the housing challenge, its only in recent years somewhat getting on, and with high equity that I haven't been at or close to my borrowing limits. Its natural human behaviour.
Plus of course £100k house gains half the value of a £200k house. If your gains (equity) is going up faster by borrowing more over a reasonable period your daft not to, bar the risk you cannot support it should things turn bad.

 

[Mercenary Keyboard Warrior]

It'll be 0.5 won't it. Feels like it has to be

Thats the minimum it should be
BUT the BOE are always too slow and too cautious

I certainly wouldnt rule out seeing 0.25%

IIRC a couple of them voted for 0.5% last time, so I would see them as nailed on for 0.5%, or even higher.

 

[MadMossy]

Looks like you were correct MKW, BOE just announced interest rates increasing to 1.25%, a 0.25% rise over the previous rates.

 

[200sols]

Looks like you were corerect MKW, BOE just announced interest rates increasing to 1.25%, a 0.25% rise over the previous rates.

The decision will be announced at midday.

 

[Mercenary Keyboard Warrior]

Yeah mid day, suspect you have picked up on some prediction. I think last vote the prediction was 0.25% again this time, but things have got a lot worse since then.

 

[Harlequin]

Needs to go to 2% not these kiddie steps

 

[JamesH85]

0.25% feels like it's going to be a mistake.

Inevitable of a rise but I actually thought we'd get 0.5%.

 

[Freakbro]

Not really, the currency must be defended at all costs.

A dovish 25bp rise today would be nothing short of catastrophic for sterling.

Genuine question: but is that your opinion or an indicated direction of policy?

Just wondering as it always seems they usually sacrifice one aspect of an economy to focus on saving another. Ie: in the 80's it was let employment take the hit to keep inflation low, whereas up to now it's been protect jobs at all costs but enough to let inflation run its course? (Which would help the national debt).

Commentator on the news this morning saying we're in stagflation already, so to me it seems we're a bit screwed whatever the BoE does. Increase rates aggressively, take more demand out of the system as we're heading towards a recession/depression or gently increase rates and see your currency slide and import costs go up, taking more buying power out of the system.

 

[200sols]

Genuine question: but is that your opinion or an indicated direction of policy?

Just wondering as it always seems they usually sacrifice one aspect of an economy to focus on saving another. Ie: in the 80's it was let employment take the hit to keep inflation low, whereas up to now it's been protect jobs at all costs but enough to let inflation run its course? (Which would help the national debt).

Commentator on the news this morning saying we're in stagflation already, so to me it seems we're a bit screwed whatever the BoE does. Increase rates aggressively, take more demand out of the system as we're heading towards a recession/depression or gently increase rates and see your currency slide and import costs go up, taking more buying power out of the system.

The BoEs remit is to keep inflation in check, that should be their aim. Part of the reason sterling is so low is because investors have lost faith with the mixed signals the BoE have been throwing out there and what actually is it doing, is its aim to deal with inflation or to deal with the economy?

 

[Freakbro]

Right, ok. I heard something like that yesterday. So the best course of action for the BoE is to be decisive with indicating which way they are going with announcements and actions.

I guess if inflation control is their remit then the only lever they have is to aggressively increase rates? Even though most inflationary pressure is external.

What a mess.

I know economists have been scratching their heads for years wondering why all this QE didn't cause any inflation previously, maybe it just needed a catalyst to set it off - and we had 2 big ones - Covid and the Russian invasion.