IMF tells the UK to consider dropping interest rates!

[Hatter The Mad]

Fuel duty rises or reductions are not in themselves big enough to force people off or encourage people onto the roads, though. All it does is reduce or increase peoples disposable income left after they've paid the fuel bill.

Oh, is that right? Has it been studied in any detail?

 

[Foghorn Leghorn]

glad i am on a tracker

with you there. My mortgage interest payment has been less than £10 pm for a good while now.

Sorry, shameless gloating post

 

[Mercenary Keyboard Warrior]

Interested of those with trackers and any more that come to this thread how much longer is your tracker for? I was looking recently and the tracker deals dont look that good now.
So if your on a tracker and you dont mind saying what rate are you paying, base+ what %

 

[Hatter The Mad]

What are your tracker rates? I am currently 6 months into a 1.99% fix, and hoping once I come out of it they'll still be rock-bottom

 

[Bear]

Interested of those with trackers and any more that come to this thread how much longer is your tracker for? I was looking recently and the tracker deals dont look that good now.
So if your on a tracker and you dont mind saying what rate are you paying, base+ what %

My tracker is currently 2.89% IIRC so 2.39+base and there is no tie in time. First direct were doing a no fee no lock in flexible tracker, so I'm currently over paying by £500 to £1000 per month. I calculated the other day at the current rate I will be mortgage free in just under 6 years.

 

[[TW]Fox]

Oh, is that right? Has it been studied in any detail?

Fuel is a reasonably price inelastic product. There is obviously no doubt that once prices reach a certain level people begin to cut back and change habits but +/- 5p a litre in fuel duty isn't going to make or break this, it's just going to affect how much people feel they have left to spend after paying for fuel. Remember much of the problem is a lack of confidence - increased prices for essentials like fuel hurt consumer confidence and reductions increase it, even if the actual amounts are quite trivial.

In order for fuel duty itself to have a significant effect of either encouraging road use or reducing it, you'd need to raise or lower it by a huge margin - 30-40p off or on a litre of fuel for example.

 

[Tute]

Oh, is that right? Has it been studied in any detail?

I dunno about you but I tend to drive where I need to go. If fuel was £2 a litre i'd still pay it, as i'd have to if I wanted things like food and to go to Uni.

Dropping it to say, £1 a litre would just mean that I have more money to spend elsewhere, it wouldn't mean i'd suddenly feel the urge to go on driving holidays.

 

[Hatter The Mad]

I dunno about you but I tend to drive where I need to go. If fuel was £2 a litre i'd still pay it, as i'd have to if I wanted things like food and to go to Uni.

If I was to drive to see my parents, cost (train vs car) is a big factor I take into consideration. Maybe I'm alone in that

 

[Hatter The Mad]

Fuel is a reasonably price inelastic product. There is obviously no doubt that once prices reach a certain level people begin to cut back and change habits but +/- 5p a litre in fuel duty isn't going to make or break this, it's just going to affect how much people feel they have left to spend after paying for fuel. Remember much of the problem is a lack of confidence - increased prices for essentials like fuel hurt consumer confidence and reductions increase it, even if the actual amounts are quite trivial.

In order for fuel duty itself to have a significant effect of either encouraging road use or reducing it, you'd need to raise or lower it by a huge margin - 30-40p off or on a litre of fuel for example.

Ok, I see what you're saying. However, I disagree that 5p per litre 'back in your pocket' will have the same psychological impact as an income tax cut, or maybe even VAT (although I believe 20% is the right level).

 

[Tute]

If I was to drive to see my parents, cost (train vs car) is a big factor I take into consideration. Maybe I'm alone in that

I tend to take the car because trains are unreliable, often with insufficient space, overpriced food and they smell funky.

With the car I can leave when I want, drive how I want, stop when I want, and generally enjoy the trip.

Also in most cases the car tends to work out cheaper for me anyway, unless I book way in advance.

Ok, I see what you're saying. However, I disagree that 5p per litre 'back in your pocket' will have the same psychological impact as an income tax cut, or maybe even VAT (although I believe 20% is the right level).

I see what you mean, but a cut in income tax or VAT only benefits the consumer. A cut in fuel duty benefits the businesses that use it as well.

 

[[TW]Fox]

If I was to drive to see my parents, cost (train vs car) is a big factor I take into consideration. Maybe I'm alone in that

5p or 10p either way is not going to change the maths though.

 

[aln]

My tracker is currently 2.89% IIRC so 2.39+base and there is no tie in time. First direct were doing a no fee no lock in flexible tracker, so I'm currently over paying by £500 to £1000 per month. I calculated the other day at the current rate I will be mortgage free in just under 6 years.

I arranged a tracker today that is 2.69%, though there was a fee. I will be overpaying like mad also.

 

[Hatter The Mad]

5p or 10p either way is not going to change the maths though.

Yes, you're right

 

[fadetoblack]

We need less road use, not more.

Don't talk cow poo try living in the sticks were you have to drive!
No buses & trains

 

[Hatter The Mad]

Don't talk cow poo try living in the sticks were you have to drive!
No buses & trains

Sorry, I meant in civilisation

 

[realBabelfish]

I tend to take the car because trains are unreliable, often with insufficient space, overpriced food and they smell funky.

With the car I can leave when I want, drive how I want, stop when I want, and generally enjoy the trip.

Also in most cases the car tends to work out cheaper for me anyway, unless I book way in advance.



I see what you mean, but a cut in income tax or VAT only benefits the consumer. A cut in fuel duty benefits the businesses that use it as well.

well, if they scrapped VAT then it would mean you had 20% more to spend consuming.

fuel duty has to come down. its such a ripoff. where i work i need a car to get there. there are no public transport options.

owing and running a car is so expensive these days

 

[George Hincapie]

If they reduced it to 0.25%, that makes money 50% cheaper. That's what the point is.

But it won't be cheaper for the consumer, so it is pointless.

 

[George Hincapie]

owing and running a car is so expensive these days

There's too many cars on the road as it is, so forcing poor people to take the bus is a good thing IMHO.

 

[Greebo]

The problem is at the moment the banks are already not passing on record low interest rates - if anything, unsecured loan rates and credit cards have gone up. Finance for small businesses is still incredibly difficult to obtain.

Dropping the rates even further won't do anything to change the above. Banks are shoring up their balance sheets and hoarding cash.

This. Even secured loans have increased. We used to get base rate plus 2% so we were borrowing money at 2.5% when it dropped to 0.5%.

Now the same institutions want base rate plus 4% = 4.5% as "it's a difficult market to lend money" and they have orders from head office that is the margin they need to work on. I even got a base rate plus 6% margin from a bank last week.

The only winners is like my boss who went on a 25 year base rate tracker mortgage just before the rates dropped and he is only paying 0.5% for his mortgage.

 

[Mercenary Keyboard Warrior]

There's too many cars on the road as it is, so forcing poor people to take the bus is a good thing IMHO.

Sorry generally I agree with what you write, but to say that the poor should have any less right to use the roads is a bit off.

Long term strategy needs to discourage use across the spectrum not make it a privaledge for a few.
Personally I think there should be a fuel allowance and any usage above that should be taxed massively. Ie pump price is say £10 a litre, you get a £8.50 discount off your first say 2000 litres a year. Not worried about the specific mechanics just the theory.

Push fuel too hard and the peasants may resort to driving horses and carts again, imagine the chaos if even 1% of the traffic was travelling at that speed