Mortgage Rate Rises

[413x]

I don't think they are waiting long enough.
5-6-7pc on average mortgage is enough to hurt the people it's going to hurt.

What it might do is absolutely shaft our huge national deficit.

It also might start encouraging more people to save.

 

[Raymond Lin]

If the government takes away the power from BoE, and "do it right for the people", the problem with that is they are doing it for the target demographic that would vote for them, meaning the move would be at least seen as political. And whilst using the economy as a reason to vote for your party is nothing new, using the economy as a chess move for the next general election is a very scumming thing to do. To me that is a very short them gain in order to push the problem down the line.

Turkey has long resisted pushing up their interest rates, and what happened? their currency crashed, and kept crashing, meaning the country's import cost has increased, it went on so long that their central bank is starting to run out of money, and had no choice by to raise rates to 15%.

This could be us, if we don't increase rates "slowly"...(note that our rates is not that indifferent to the US, it's just we tend to do short term mortgage and they do long term.) then the country will be poorer as a result since we import a lot of goods from around the world, now not in the EU, it will further drive up the cost.

So....Tories (or any party) taking control of the rates...TERRIBLE idea.

 

[Mercenary Keyboard Warrior]

If the government takes away the power from BoE, and "do it right for the people", the problem with that is they are doing it for the target demographic that would vote for them, meaning the move would be at least seen as political. And whilst using the economy as a reason to vote for your party is nothing new, using the economy as a chess move for the next general election is a very scumming thing to do. To me that is a very short them gain in order to push the problem down the line.

Turkey has long resisted pushing up their interest rates, and what happened? their currency crashed, and kept crashing, meaning the country's import cost has increased, it went on so long that their central bank is starting to run out of money, and had no choice by to raise rates to 15%.

This could be us, if we don't increase rates "slowly"...(note that our rates is not that indifferent to the US, it's just we tend to do short term mortgage and they do long term.) then the country will be poorer as a result since we import a lot of goods from around the world, now not in the EU, it will further drive up the cost.

So....Tories (or any party) taking control of the rates...TERRIBLE idea.

Thing is there are in effect in charge of them anyway, via proxy.
They set the BOE inflation target, they could amend that, but they choose not to.
So they set the target for the BOE and they know the BOE only has one mechanism in order to try to control inflation.

 

[ci_newman]

If the government takes away the power from BoE, and "do it right for the people", the problem with that is they are doing it for the target demographic that would vote for them, meaning the move would be at least seen as political. And whilst using the economy as a reason to vote for your party is nothing new, using the economy as a chess move for the next general election is a very scumming thing to do. To me that is a very short them gain in order to push the problem down the line.

Turkey has long resisted pushing up their interest rates, and what happened? their currency crashed, and kept crashing, meaning the country's import cost has increased, it went on so long that their central bank is starting to run out of money, and had no choice by to raise rates to 15%.

This could be us, if we don't increase rates "slowly"...(note that our rates is not that indifferent to the US, it's just we tend to do short term mortgage and they do long term.) then the country will be poorer as a result since we import a lot of goods from around the world, now not in the EU, it will further drive up the cost.

So....Tories (or any party) taking control of the rates...TERRIBLE idea.

I agree it's a bad idea, which is probably why it's going to happen. Especially if there's a GE next year

 

[413x]

If the government takes away the power from BoE, and "do it right for the people", the problem with that is they are doing it for the target demographic that would vote for them, meaning the move would be at least seen as political. And whilst using the economy as a reason to vote for your party is nothing new, using the economy as a chess move for the next general election is a very scumming thing to do. To me that is a very short them gain in order to push the problem down the line.

Turkey has long resisted pushing up their interest rates, and what happened? their currency crashed, and kept crashing, meaning the country's import cost has increased, it went on so long that their central bank is starting to run out of money, and had no choice by to raise rates to 15%.

This could be us, if we don't increase rates "slowly"...(note that our rates is not that indifferent to the US, it's just we tend to do short term mortgage and they do long term.) then the country will be poorer as a result since we import a lot of goods from around the world, now not in the EU, it will further drive up the cost.

So....Tories (or any party) taking control of the rates...TERRIBLE idea.

It would be bad for tories to use it as a pawn. Agreed.

You'd get short term gain for long term pain. And you'd possibly get tories in power.


They need a miracle though.
They hoped inflation would come right down.. And I even think they might have had a chance if life Noticeably improved.

But with rates sky high, they can't even splash the cash or cut taxes a lot.

They are screwed. Wouldn't put anything past them.


Like a cornered animal in distress. You don't know what's going to happen next.

 

[Joe Jones]

I don't think they are waiting long enough.
5-6-7pc on average mortgage is enough to hurt the people it's going to hurt.

What it might do is absolutely shaft our huge national deficit.

It also might start encouraging more people to save.

Interest rate hikes usually take 12-18months to filter through to the economy.
The BoE know this but for some reason just keep hiking....inflation not down, raise, still not down, raise....12months later at 10%..."oh we've made 1milllion people homeless...inflation still above target but we'll take a win now it's down a bit"

 

[jaybee]

Repossession must be a nightmare. Anyone been through that or got any experiences to tell?

 

[alec]

There’s so many jobs available that the wage inflation won’t stop.

There is no wage inflation. Wages are not keeping up with prices. Well, except bankers and their bonuses.

 

[delta0]

There is no wage inflation. Wages are not keeping up with prices. Well, except bankers and their bonuses.

News headlines this morning https://www.bbc.co.uk/news/business-66156713.amp

 

[matt100]

News headlines this morning https://www.bbc.co.uk/news/business-66156713.amp

It's either a fair point or pedantry depending on your opinion but....

While pay is growing at record rates, it is still not increasing fast enough to keep up with rising prices in the shops. Regular pay fell by 0.8% after the effect of inflation taken into account.

 

[grudas]

as someone who bought a property just last year, before the mess(literally weeks before it) I'm enjoying the screwage again.

saved for years, got it done.. great achievement yadadada..

prices dropping - tick
rates 3-4x higher than our current lock(till mid 25) - tick
rates presumed to go higher - tick
possible monthly mortgage of 2500-2800 - tick

love it. I think I should stop reading this thread and deal with it when it comes, end of 24 basically. As no on really knows where we'll be. And no we haven't maxed out our affordability, we're not that silly but stretching ourselved to 3k a month is going to leave us paying bills and working, nothing else.

 

[delta0]

It's either a fair point or pedantry depending on your opinion but....

It’s keeping the inflationary pressure going. Interest rate rises are to reduce money supply in the economy. Wage increases will increase it. So we see a slight fall in the amount of money supply which is having minimal impact on inflation.

 

[sigma]

as someone who bought a property just last year, before the mess(literally weeks before it) I'm enjoying the screwage again.

saved for years, got it done.. great achievement yadadada..

prices dropping - tick
rates 3-4x higher than our current lock(till mid 25) - tick
rates presumed to go higher - tick
possible monthly mortgage of 2500-2800 - tick

love it. I think I should stop reading this thread and deal with it when it comes, end of 24 basically. As no on really knows where we'll be. And no we haven't maxed out our affordability, we're not that silly but stretching ourselved to 3k a month is going to leave us paying bills and working, nothing else.

Hopefully by 25 the rates will drop a bit

At least you have 2 years to plan and build a buffer

 

[sigma]

It’s keeping the inflationary pressure going. Interest rate rises are to reduce money supply in the economy. Wage increases will increase it. So we see a slight fall in the amount of money supply which is having minimal impact on inflation.

How long until hyper inflation

 

[shredgodxp]

It's either a fair point or pedantry depending on your opinion but....

Would agree with this - Pay increases have always been low in the past years. I know my employer historically used "2% increase each year based on inflation" regardless of what the inflation rate actually was. It's only in recent times (past 12 month) they've done something about this as there were a lot of unhappy staff. Pay must go up as it's not sustainable at current rates, what needs to happen is corporate greed being checked.

 

[413x]

as someone who bought a property just last year, before the mess(literally weeks before it) I'm enjoying the screwage again.

saved for years, got it done.. great achievement yadadada..

prices dropping - tick
rates 3-4x higher than our current lock(till mid 25) - tick
rates presumed to go higher - tick
possible monthly mortgage of 2500-2800 - tick

love it. I think I should stop reading this thread and deal with it when it comes, end of 24 basically. As no on really knows where we'll be. And no we haven't maxed out our affordability, we're not that silly but stretching ourselved to 3k a month is going to leave us paying bills and working, nothing else.

What rate was it?

Brutal this m horrible situation. With only two years don't even have much mental breathing space.

Guess all can do is plan best you can for renewal.

 

[delta0]

How long until hyper inflation

Inflation isn’t rising still so it’s not likely but not impossible.

 

[413x]

I get the feeling, from an anecdotal point of view, that inflation won't have changed. Well, not by 1pc.

And that the BoE might get scared and do a 0.5.

I still think 0.5 jumps are excessive now and jumping the gun. People this affects are rolling off 1.x percent deals onto 5.x percent. Surely that's enough?

 

[sigma]

I get the feeling, from an anecdotal point of view, that inflation won't have changed. Well, not by 1pc.

And that the BoE might get scared and do a 0.5.

I still think 0.5 jumps are excessive now and jumping the gun. People this affects are rolling off 1.x percent deals onto 5.x percent. Surely that's enough?

I think it was @200sols who made the point that we basically need to keep up the same rate or similar rate of increase as other big economies such as the US otherwise we will trash our currency

 

[fez]

I don't think they are waiting long enough.
5-6-7pc on average mortgage is enough to hurt the people it's going to hurt.

What it might do is absolutely shaft our huge national deficit.

It also might start encouraging more people to save.

Save with what? A huge number of people will have less than no money at this rate.

Especially when businesses seem to want to continue to see growth. https://www.bbc.co.uk/news/business-66156713

Welcome to capitalism. You make massive profits when times are good and you make sure that you push the pain onto someone else when times are bad. Couldn't possibly make less money when huge swathes of the population are borderline broke. That would be decidedly anti-capitalist.