Interest Rate Up

This Forum is the main messageboard to discuss all things Claret and Blue and beyond
martin_p
Posts: 10368
Joined: Mon Jan 25, 2016 3:40 pm
Been Liked: 3764 times
Has Liked: 696 times

Re: Interest Rate Up

Post by martin_p » Thu May 05, 2022 8:36 pm

dsr wrote:
Thu May 05, 2022 1:05 pm
Is it that we have particularly high borrowing rates? In general, countries with massive borrowing problems need high inflation with low interest to reduce the real value of their debt. They can't afford to pay the interest on the debt if rates are high, but if we don't get lots of inflation they won't be able to repay any debt. Unsupportable debt will pretty much always lead to high inflation, though normally interest rates go up with it.

If you work or worked for the government and have a final salary pension, or a government wage, you are inflation-proofed by virtue of your job. It's mainly the private sector workers who will suffer.
I’d love to know how you think those with a government wage are ‘inflation proofed’!

Garnerssoap
Posts: 1348
Joined: Wed Jan 20, 2016 5:50 pm
Been Liked: 392 times
Has Liked: 514 times

Re: Interest Rate Up

Post by Garnerssoap » Thu May 05, 2022 8:37 pm

They don’t actually print more they let the banks create debt for us. Just saying

groove
Posts: 1184
Joined: Thu Jan 21, 2016 2:26 pm
Been Liked: 318 times
Has Liked: 544 times

Re: Interest Rate Up

Post by groove » Thu May 05, 2022 9:01 pm

Garnerssoap wrote:
Thu May 05, 2022 8:37 pm
They don’t actually print more they let the banks create debt for us. Just saying
Correct. The phrase is just a way of visualising the creation of money. In reality its just digits on a screen.
This user liked this post: Rowls

the_great_orange_one
Posts: 17
Joined: Sat Jan 23, 2016 9:25 pm
Been Liked: 3 times
Has Liked: 1 time

Re: Interest Rate Up

Post by the_great_orange_one » Thu May 05, 2022 9:18 pm

Banks don’t just create money

In order to lend £1 they need to have £1

That can be borrowed from the government at cheep rates but they don’t create money. Net zero game for a retail bank

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Thu May 05, 2022 9:35 pm

the_great_orange_one wrote:
Thu May 05, 2022 9:18 pm
Banks don’t just create money

In order to lend £1 they need to have £1

That can be borrowed from the government at cheep rates but they don’t create money. Net zero game for a retail bank
Banks create money. Let’s say the reserve requirement ratio is 10% and they receive a £1000 deposit. They can then use this £1000 to create a £900 loan. That’s new money. In fact, from £1000 deposit, the money multiplier suggests £10000 of new money could be created (if the reserve requirement ratio was 10%).

Garnerssoap
Posts: 1348
Joined: Wed Jan 20, 2016 5:50 pm
Been Liked: 392 times
Has Liked: 514 times

Re: Interest Rate Up

Post by Garnerssoap » Thu May 05, 2022 9:43 pm

the_great_orange_one wrote:
Thu May 05, 2022 9:18 pm
Banks don’t just create money

In order to lend £1 they need to have £1

That can be borrowed from the government at cheep rates but they don’t create money. Net zero game for a retail bank
Where’ve you been since the 70’s lol. They’ve been having your pants down since then

the_great_orange_one
Posts: 17
Joined: Sat Jan 23, 2016 9:25 pm
Been Liked: 3 times
Has Liked: 1 time

Re: Interest Rate Up

Post by the_great_orange_one » Thu May 05, 2022 9:46 pm

There are a few different principals as play

If there is a deposit of £1000 and the bank has lent £900 the bank only has £100 in cash. The reserve is what it has to hold in order to be able to give depositors cash should they want it.

This is why you give notice if you want to draw large amounts and have restrictions on daily cash withdrawals from machines.

Northern Rock went under as there was a run on the bank, everyone wanted their money at once and they didn’t have the money to pay it out. Not enough time to unwind longer term positions.

No new money is created, they lend out your money and give you a slice of the profits (interest), the only reason it is virtually risk free is because the government guarantees it
This user liked this post: IanMcL

the_great_orange_one
Posts: 17
Joined: Sat Jan 23, 2016 9:25 pm
Been Liked: 3 times
Has Liked: 1 time

Re: Interest Rate Up

Post by the_great_orange_one » Thu May 05, 2022 9:50 pm

😀 only spent 4 years in the 70’s and didn’t work in banking then.

Fractional reserve banking isn’t what you think it is.

It is also not the most exciting or interesting thing in the world, unless you live and breath it like me 😂 so wouldn’t expect it to be common knowledge

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Thu May 05, 2022 9:58 pm

the_great_orange_one wrote:
Thu May 05, 2022 9:46 pm
There are a few different principals as play

If there is a deposit of £1000 and the bank has lent £900 the bank only has £100 in cash. The reserve is what it has to hold in order to be able to give depositors cash should they want it.

This is why you give notice if you want to draw large amounts and have restrictions on daily cash withdrawals from machines.

Northern Rock went under as there was a run on the bank, everyone wanted their money at once and they didn’t have the money to pay it out. Not enough time to unwind longer term positions.

No new money is created, they lend out your money and give you a slice of the profits (interest), the only reason it is virtually risk free is because the government guarantees it
Commercial banks create money by making new loans. When a bank makes a loan, for instance to somebody interested in taking a loan to buy a new car, it credits their bank account with a bank deposit of the size of the value of the new car.

This new amount sitting on the car buyer’s bank account (and later on the car seller’s bank account) is literally new money created out of thin air.

the_great_orange_one
Posts: 17
Joined: Sat Jan 23, 2016 9:25 pm
Been Liked: 3 times
Has Liked: 1 time

Re: Interest Rate Up

Post by the_great_orange_one » Thu May 05, 2022 10:10 pm

The example is correct however it is not new money, it is money the bank already holds in either customer deposits or another form of money (gov lending or securitisation).

The bank can only create money (lend) if it has funds to lend. Google Molo finance, new (relatively) player in the market out of funds.

It is all double entry bookkeeping, banks file accounts as well and I’ve never seen a balance sheet entry called new money.

dsr
Posts: 15139
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 4549 times
Has Liked: 2241 times

Re: Interest Rate Up

Post by dsr » Thu May 05, 2022 11:26 pm

martin_p wrote:
Thu May 05, 2022 8:36 pm
I’d love to know how you think those with a government wage are ‘inflation proofed’!
Those with government pensions are index linked, as a rule, and those with jobs in government have an employer who isn't overly concerned that inflation-linked pay rises will make him run out of money. Government jobs may not be fully inflation-proof or fully secure, but they are a lot better off than those in the private sector.

On the side issue, why on earth is anyone who needs to be in the office, getting away with working from home? We keep seeing letters in the paper saying that they find it more productive working from home. But the passport office isn't more productive. The tax office isn't more productive. The DVLC isn't more productive. The pensions office isn't more productive. They can none of them get round to answering phones promptly, let alone doing their basic job. Any private sector non-monopoly that was doing the job as "efficiently" as these government agencies would have gone bust and put all their staff out of work.

martin_p
Posts: 10368
Joined: Mon Jan 25, 2016 3:40 pm
Been Liked: 3764 times
Has Liked: 696 times

Re: Interest Rate Up

Post by martin_p » Fri May 06, 2022 12:21 am

:lol:
dsr wrote:
Thu May 05, 2022 11:26 pm
Those with government pensions are index linked, as a rule, and those with jobs in government have an employer who isn't overly concerned that inflation-linked pay rises will make him run out of money. Government jobs may not be fully inflation-proof or fully secure, but they are a lot better off than those in the private sector.
There’s no such thing as ‘inflation-linked pay rises’ in government. Civil Servants have had pay freezes or below Inflation pay rises for well over a decade now. It’s no secret that many government employees depend on the benefits they administer to make ends meet.
These 2 users liked this post: Burnley Ace RighteousClaret

dsr
Posts: 15139
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 4549 times
Has Liked: 2241 times

Re: Interest Rate Up

Post by dsr » Fri May 06, 2022 12:33 am

martin_p wrote:
Fri May 06, 2022 12:21 am
:lol:

There’s no such thing as ‘inflation-linked pay rises’ in government. Civil Servants have had pay freezes or below Inflation pay rises for well over a decade now. It’s no secret that many government employees depend on the benefits they administer to make ends meet.
They could always get a job in the private sector to find out how much greener the grass is. Private sector jobs tend to be more fluid, so they can move from job to job till they get one they like.

There's an article here that covers salaries and pensions, public v. private sector.

https://www.thisismoney.co.uk/money/pen ... rkers.html

martin_p
Posts: 10368
Joined: Mon Jan 25, 2016 3:40 pm
Been Liked: 3764 times
Has Liked: 696 times

Re: Interest Rate Up

Post by martin_p » Fri May 06, 2022 12:46 am

dsr wrote:
Fri May 06, 2022 12:33 am
They could always get a job in the private sector to find out how much greener the grass is. Private sector jobs tend to be more fluid, so they can move from job to job till they get one they like.

There's an article here that covers salaries and pensions, public v. private sector.

https://www.thisismoney.co.uk/money/pen ... rkers.html
Well there’s some real insightful stuff in that article. More job losses in the pandemic in the private sector citing job losses in accommodation (private) versus job losses in education and healthcare (public) :lol:

It’s an article full of meaningless and pointless stats. The reason the average pay in the public sector is very highly than that in the private sector is that all the low skilled jobs with the low pay are in the private sector. No one is prepared to compare like for like jobs like an IT professional or doctor in the public and private sectors as that’d paint a very different picture.

But I’ll just repeat the point I came to make, that the notion that public sector wages are somehow ‘inflation proof’ is something you’ve entirely invented and isn’t true.
These 4 users liked this post: fatboy47 Greenmile PaintYorkClaretnBlue RighteousClaret

martin_p
Posts: 10368
Joined: Mon Jan 25, 2016 3:40 pm
Been Liked: 3764 times
Has Liked: 696 times

Re: Interest Rate Up

Post by martin_p » Fri May 06, 2022 12:50 am

And here’s a link to back that up.

https://www.ft.com/content/48dafbb9-37 ... 652add888c

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Fri May 06, 2022 5:54 am

the_great_orange_one wrote:
Thu May 05, 2022 10:10 pm
The example is correct however it is not new money, it is money the bank already holds in either customer deposits or another form of money (gov lending or securitisation).

The bank can only create money (lend) if it has funds to lend. Google Molo finance, new (relatively) player in the market out of funds.

It is all double entry bookkeeping, banks file accounts as well and I’ve never seen a balance sheet entry called new money.
In the below example the commercial bank extended a new loan (increased white stack) and credited the consumer’s account with a new deposit (increased red stack).

This is literally new ‘‘real economy’’ money created out of thin air and is what contributes towards inflation, rather than central banks ‘printing money’.
Attachments
3DF44EB9-E162-4710-912F-6D051C8EED74.jpeg
3DF44EB9-E162-4710-912F-6D051C8EED74.jpeg (406.7 KiB) Viewed 1825 times

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Fri May 06, 2022 6:31 am

the_great_orange_one wrote:
Thu May 05, 2022 9:18 pm
Banks don’t just create money

In order to lend £1 they need to have £1

That can be borrowed from the government at cheep rates but they don’t create money. Net zero game for a retail bank
Where do the governments get the money from?

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Fri May 06, 2022 6:42 am

Rowls wrote:
Fri May 06, 2022 6:31 am
Where do the governments get the money from?
They issue bonds (Gilts) that investors including most pension funds buy.

the_great_orange_one
Posts: 17
Joined: Sat Jan 23, 2016 9:25 pm
Been Liked: 3 times
Has Liked: 1 time

Re: Interest Rate Up

Post by the_great_orange_one » Fri May 06, 2022 9:52 am

RVclaret wrote:
Fri May 06, 2022 5:54 am
In the below example the commercial bank extended a new loan (increased white stack) and credited the consumer’s account with a new deposit (increased red stack).

This is literally new ‘‘real economy’’ money created out of thin air and is what contributes towards inflation, rather than central banks ‘printing money’.
I see what you are saying and agree to an extent but this is an example of theory v reality. People do not borrow money to leave it in the same bank doing nothing. It is used to pay down other debt or purchase items (where others in turn pay down debt). There is also the question of cash reserves which do not move in the example unless they represent something else.

In theory what you have quoted from the BoE is possible if you can find enough people who want to pay more interest in borrowings than their deposits. Although I’ve lost a little bit more respect for the BoE 😀.

Cash flow is important, there is a great little story about someone wanting to check out a room in a hotel and the hotel charging a returnable fee resulting in a mass reduction in a towns debt profile. Allowing people to borrow assists in the movement of money and the paying down of debts.
This user liked this post: RVclaret

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Fri May 06, 2022 11:03 am

RVclaret wrote:
Fri May 06, 2022 6:42 am
They issue bonds (Gilts) that investors including most pension funds buy.
Where do the bonds come from?

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Fri May 06, 2022 11:06 am

Rowls wrote:
Fri May 06, 2022 11:03 am
Where do the bonds come from?
The treasury department. They create and issue them.

Of course the knock on effect of more government debt, they need to repay that debt, or at least service it. How? Well raising tax is one way…

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Fri May 06, 2022 11:20 am

RVclaret wrote:
Fri May 06, 2022 11:06 am
The treasury department. They create and issue them.

Of course the knock on effect of more government debt, they need to repay that debt, or at least service it. How? Well raising tax is one way…
Oh I see.

So the bonds are sold for actual money (which actually exists)

The way the government gets this actual money (without printing money) is by ... "creating and issuing" bonds ... which is ... printing bonds.

I can see why it's not the same as "printing money" but it looks suspiciously like printing money doesn't it?

Garnerssoap
Posts: 1348
Joined: Wed Jan 20, 2016 5:50 pm
Been Liked: 392 times
Has Liked: 514 times

Re: Interest Rate Up

Post by Garnerssoap » Fri May 06, 2022 12:26 pm

Government debt is a myth to keep the proles down and skint. If someone has the right to create money why would they borrow it. They just dress it up as government borrowings to enable them to steal more off us.

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Fri May 06, 2022 12:44 pm

Garnerssoap wrote:
Fri May 06, 2022 12:26 pm
Government debt is a myth to keep the proles down and skint. If someone has the right to create money why would they borrow it. They just dress it up as government borrowings to enable them to steal more off us.
Government debt is very real.

The more debt the government has the more they tax us to pay the interest on this debt.

If it would be helpful to keep some more of your payslip rather than see the government taking it to pay for things they've already splurged out on then you need to start caring about government debt.

Garnerssoap
Posts: 1348
Joined: Wed Jan 20, 2016 5:50 pm
Been Liked: 392 times
Has Liked: 514 times

Re: Interest Rate Up

Post by Garnerssoap » Fri May 06, 2022 10:48 pm

Nope. You’re repeating what you’ve been led to believe all your life is going on. It’s a lie, a sham and a conjob to keep us down. They’re are literally taking the **** out of us all

JohnMcGreal
Posts: 2207
Joined: Thu Jan 21, 2016 7:37 am
Been Liked: 1344 times
Has Liked: 438 times

Re: Interest Rate Up

Post by JohnMcGreal » Sat May 07, 2022 9:15 am

Good thread here which helps explain how new money is created:

https://threadreaderapp.com/thread/1337 ... 33826.html

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Sat May 07, 2022 9:34 am

Garnerssoap wrote:
Fri May 06, 2022 10:48 pm
Nope. You’re repeating what you’ve been led to believe all your life is going on. It’s a lie, a sham and a conjob to keep us down. They’re are literally taking the **** out of us all
We'll have to agree to disagree but there are a lot of left wing commentators and political thinkers who think as you do - that if you can print your own money you'd never have to borrow any.

Examples of how this works out when politicians actually go and do as you suggest:

https://www.cnbc.com/2011/02/14/The-Wor ... -Time.html

Guess which group suffers most when the government prints money? Is it the rich or is it the poor?

The answer is that it's both who suffer but naturally it hits the poorer people far, far harder.

fatboy47
Posts: 4179
Joined: Thu Jan 21, 2016 8:58 am
Been Liked: 2316 times
Has Liked: 2692 times
Location: Isles of Scilly

Re: Interest Rate Up

Post by fatboy47 » Sat May 07, 2022 9:47 am

Rowls wrote:
Sat May 07, 2022 9:34 am
there are a lot of left wing commentators and political thinkers who think as you do - that if you can print your own money you'd never have to borrow any.


Are you seriously that politically blinkered as to think that inflationary economic policies are somehow a preserve of the left?

Get the big blue glasses off just for a minute Rowls and give us a break. It's getting tiresome.

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Sat May 07, 2022 10:16 am

fatboy47 wrote:
Sat May 07, 2022 9:47 am
Are you seriously that politically blinkered as to think that inflationary economic policies are somehow a preserve of the left?

Get the big blue glasses off just for a minute Rowls and give us a break. It's getting tiresome.
Here I am explaining how a Conservative government has created an inflation bubble and I get accused of somehow promoting them? Explain that to me, fatboy47!

The kind of policies that can lead to inflation are those linked to higher taxes and higher spending. These ARE left-wing policies. This "Conservative" government wracked up spending to ineffably high levels. Result? Inflation.

Typically it IS left wing parties that favour these kind of policies.

Can low taxes, low government spending and tight fiscal controls ever lead to inflation? Not to my knowledge. There are certainly other factors that can exacerbate and contribute to inflation but these kind of economic policies are not known to create inflation.

RVclaret
Posts: 13836
Joined: Thu Jan 21, 2016 8:30 am
Been Liked: 3707 times
Has Liked: 2499 times

Re: Interest Rate Up

Post by RVclaret » Sat May 07, 2022 11:01 am

Inflation is high around the world. Not just in the UK. It’s the covid economic hangover.

Turkey just recorded 75% year on year inflation!

Garnerssoap
Posts: 1348
Joined: Wed Jan 20, 2016 5:50 pm
Been Liked: 392 times
Has Liked: 514 times

Re: Interest Rate Up

Post by Garnerssoap » Sat May 07, 2022 11:07 am

It’s not a left or right thing. It’s a con on us all whichever nonce you vote for. The link above explains it all pretty well. Given everyone on this thread agrees the government create money (apart from the young fella who works as a cashier at Burnley Building Society) then it’s not a massive step to accept the logic the government doesn’t need to borrow. They just pretend they do to keep us down and quiet.
It’s a method to steal those few remaking real ale vouchers out of your wallet Rowls

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Sat May 07, 2022 11:25 am

RVclaret wrote:
Sat May 07, 2022 11:01 am
Inflation is high around the world. Not just in the UK. It’s the covid economic hangover.

Turkey just recorded 75% year on year inflation!
Viruses don't cause inflation. Our response to them is what has caused the inflation.

At the time there was such a panic going on that very few people were even asking what the outcome would be of shutting down the world economy like it was a stop tap.

At least the lockdowns and restrictions saved lives, whatever the cost, you might say to yourself. But is there evidence that these restrictions and measures had any measurable effect on covid deaths? We're just getting the final figures. Sweden -which did not have a mandatory lockdown- is towards the bottom of European lockdown deaths.

The final figures from the US will be interesting because some states opened up after only a few weeks and refused to place mandatory restricitons on their residents. Will they have far larger deaths? Or will it be about the same? We shall see.

We're only just starting to pay for what we did. That much we can be confident of.
This user liked this post: groove

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Sat May 07, 2022 11:28 am

Garnerssoap wrote:
Sat May 07, 2022 11:07 am
It’s not a left or right thing. It’s a con on us all whichever nonce you vote for. The link above explains it all pretty well. Given everyone on this thread agrees the government create money (apart from the young fella who works as a cashier at Burnley Building Society) then it’s not a massive step to accept the logic the government doesn’t need to borrow. They just pretend they do to keep us down and quiet.
It’s a method to steal those few remaking real ale vouchers out of your wallet Rowls
Hi Garnerssoap

I'd happily share a cheap pint at Wetherspoons with you and mull it over but I think you're being overly cynical. Obviously I have strong political views but one thing I think politicians from all parties share is a desire to make the world a better place and do well for the public.

Anyway, all the best and let's concentrate on the footy - a big game today.

UTC

willsclarets
Posts: 1927
Joined: Mon Jun 27, 2016 10:06 am
Been Liked: 680 times
Has Liked: 133 times

Re: Interest Rate Up

Post by willsclarets » Sat May 07, 2022 12:34 pm

Rowls wrote:
Sat May 07, 2022 11:25 am
Viruses don't cause inflation. Our response to them is what has caused the inflation.

At the time there was such a panic going on that very few people were even asking what the outcome would be of shutting down the world economy like it was a stop tap.

At least the lockdowns and restrictions saved lives, whatever the cost, you might say to yourself. But is there evidence that these restrictions and measures had any measurable effect on covid deaths? We're just getting the final figures. Sweden -which did not have a mandatory lockdown- is towards the bottom of European lockdown deaths.

The final figures from the US will be interesting because some states opened up after only a few weeks and refused to place mandatory restricitons on their residents. Will they have far larger deaths? Or will it be about the same? We shall see.

We're only just starting to pay for what we did. That much we can be confident of.

Bang on. It's obviously a supply issue too, printing cash and throwing money around like confetti isn't the only problem. But the US increased their balance sheet to ridiculous levels and caused a massive equity bubble in the process. The result? As always, normal folk get the bill and billionaires made more billions

ElectroClaret
Posts: 17774
Joined: Thu Jan 21, 2016 7:07 pm
Been Liked: 4045 times
Has Liked: 1846 times

Re: Interest Rate Up

Post by ElectroClaret » Wed Jun 15, 2022 11:49 pm

The US fed has hiked rates by 0.75 % to try to cope with their inflation, the biggest rise since 1994.
No doubt we'll follow suit at tomorrows monthly Bank of England meeting.

JohnMcGreal
Posts: 2207
Joined: Thu Jan 21, 2016 7:37 am
Been Liked: 1344 times
Has Liked: 438 times

Re: Interest Rate Up

Post by JohnMcGreal » Thu Jun 16, 2022 7:32 am

Rowls wrote:
Thu May 05, 2022 1:05 pm
Maybe it's because we had the widest and "most generous" furlough scheme?
I guess our wide and generous furlough scheme is also the reason why we're set to have the worst performing economy in the G20, bar Russia.

https://www.ft.com/content/ee2ce542-eb1 ... a8200a47ae

Lancasterclaret
Posts: 23343
Joined: Thu Jan 21, 2016 2:09 pm
Been Liked: 8058 times
Has Liked: 4714 times
Location: Riding the galactic winds in my X-wing

Re: Interest Rate Up

Post by Lancasterclaret » Thu Jun 16, 2022 7:39 am

Rowls wrote:
Sat May 07, 2022 11:28 am
Hi Garnerssoap

I'd happily share a cheap pint at Wetherspoons with you and mull it over but I think you're being overly cynical. Obviously I have strong political views but one thing I think politicians from all parties share is a desire to make the world a better place and do well for the public.

Anyway, all the best and let's concentrate on the footy - a big game today.

UTC
I used to believe this too

Its a struggle believing it at the moment though

bfcjg
Posts: 13156
Joined: Fri Jan 22, 2016 8:17 pm
Been Liked: 5003 times
Has Liked: 6721 times

Re: Interest Rate Up

Post by bfcjg » Thu Jun 16, 2022 7:47 am

I was hoping this would be about the club and season ticket sales.
Oh well.

Gordaleman
Posts: 3982
Joined: Sun Feb 16, 2020 3:04 pm
Been Liked: 854 times
Has Liked: 604 times

Re: Interest Rate Up

Post by Gordaleman » Thu Jun 16, 2022 8:01 am

Someone asked the question about why is UK inflation higher than most other European countries?

Well, we have the same inflation pressures as everyone else, but on top of that, everything coming from Europe, post Brexit, now attracts 5% customs charges, which of course, are passed on to retailers and then customers. That 5% import duty is going straight to the treasury and Boris and his cronies are building up a massive war chest, ready to bribe the electorate with an income tax cut (And probably other stuff.) just before the next election. They don't care that people are struggling right NOW.

It'll probably work as well, because most people in this country can't see past the newspaper headlines, which are predominently Tory.

Cirrus_Minor
Posts: 4395
Joined: Fri Jan 22, 2016 8:20 pm
Been Liked: 1156 times
Has Liked: 1282 times

Re: Interest Rate Up

Post by Cirrus_Minor » Thu Jun 16, 2022 8:18 am

I bought my first house in 1979 and within 3 months the mortgage interest rate shot up to 18%.

Awayfromburnley
Posts: 681
Joined: Wed Mar 08, 2017 8:08 am
Been Liked: 294 times
Has Liked: 60 times

Re: Interest Rate Up

Post by Awayfromburnley » Thu Jun 16, 2022 8:43 am

Cirrus_Minor wrote:
Thu Jun 16, 2022 8:18 am
I bought my first house in 1979 and within 3 months the mortgage interest rate shot up to 18%.
Out if interest, how much of a % of your income was your mortgage payment?

Reason I ask is that I believe the % is way higher now and any increase in interest rates will scupper many people (which in turn brings down inflation but makes people poorer)

Tall Paul
Posts: 7171
Joined: Thu Jan 21, 2016 8:07 am
Been Liked: 2560 times
Has Liked: 690 times

Re: Interest Rate Up

Post by Tall Paul » Thu Jun 16, 2022 8:52 am

Gordaleman wrote:
Thu Jun 16, 2022 8:01 am
Someone asked the question about why is UK inflation higher than most other European countries?

Well, we have the same inflation pressures as everyone else, but on top of that, everything coming from Europe, post Brexit, now attracts 5% customs charges, which of course, are passed on to retailers and then customers. That 5% import duty is going straight to the treasury and Boris and his cronies are building up a massive war chest, ready to bribe the electorate with an income tax cut (And probably other stuff.) just before the next election. They don't care that people are struggling right NOW.

It'll probably work as well, because most people in this country can't see past the newspaper headlines, which are predominently Tory.
This isn't true.

dsr
Posts: 15139
Joined: Thu Jan 21, 2016 12:47 pm
Been Liked: 4549 times
Has Liked: 2241 times

Re: Interest Rate Up

Post by dsr » Thu Jun 16, 2022 9:00 am

Awayfromburnley wrote:
Thu Jun 16, 2022 8:43 am
Out if interest, how much of a % of your income was your mortgage payment?

Reason I ask is that I believe the % is way higher now and any increase in interest rates will scupper many people (which in turn brings down inflation but makes people poorer)
A friend of mine bought a house for £60k in the seventies; his son bought one for £400k in recently. The father paid a higher monthly payment, in absolute terms with no inflation adjustment, than the son is paying.

Billy Balfour
Posts: 3979
Joined: Mon May 28, 2018 3:00 pm
Been Liked: 1857 times
Has Liked: 652 times

Re: Interest Rate Up

Post by Billy Balfour » Thu Jun 16, 2022 9:04 am

Food inflation predicted to hit 15% this summer. A combination of Ukraine war, China lockdowns and Brexit (added admin to costs at the EU border).

JohnMcGreal
Posts: 2207
Joined: Thu Jan 21, 2016 7:37 am
Been Liked: 1344 times
Has Liked: 438 times

Re: Interest Rate Up

Post by JohnMcGreal » Thu Jun 16, 2022 9:07 am

Billy Balfour wrote:
Thu Jun 16, 2022 9:04 am
Food inflation predicted to hit 15% this summer. A combination of Ukraine war, China lockdowns and Brexit (added admin to costs at the EU border).
£ sterling is also continuing to slide, which is driving up the cost of imports, further adding to inflationary pressure.

It's even started to show characteristics of an emerging market currency:

https://www.cnbc.com/2022/05/31/sterlin ... erica.html

taio
Posts: 11520
Joined: Thu Jan 21, 2016 9:17 am
Been Liked: 3220 times
Has Liked: 340 times

Re: Interest Rate Up

Post by taio » Thu Jun 16, 2022 9:10 am

dsr wrote:
Thu Jun 16, 2022 9:00 am
A friend of mine bought a house for £60k in the seventies; his son bought one for £400k in recently. The father paid a higher monthly payment, in absolute terms with no inflation adjustment, than the son is paying.
I'm not surprised - £60k in the 1970s was a significant amount in real terms and many multiples of the average price of a house back then.

BigChaCha
Posts: 883
Joined: Sun Jul 17, 2016 12:45 pm
Been Liked: 253 times

Re: Interest Rate Up

Post by BigChaCha » Thu Jun 16, 2022 9:12 am

I'd be absolutely over the moon if we could get back to 10% to 15% interest rates again but never going to happen...

On why the UK seem to suffer more at the moment... We also bounce back far faster and stronger than most other economies as well. our economy volatility is because of our unique service-based industry and the price you pay or collect to punch above your weight in the world economy...

On furlough etc... I have close to 2000 clients worldwide and my UK business clients have held up much stronger than the rest of the world by far... There's a serious wash of money flowing over UK tech, fintech, biotech and online startups at the moment and I have never seen it stronger... My overseas clients have looked at the UK with envy ever since the pandemic started about the financial help we have had. They have mentioned many times to me, that they can't believe the help my UK clients were getting from the government compared to theirs...

Most likely, with the lead from the US, we will put the financial brakes on until the winter and then the printers go brrr again!

dushanbe
Posts: 1010
Joined: Sun Jan 03, 2016 5:20 pm
Been Liked: 396 times
Has Liked: 52 times

Re: Interest Rate Up

Post by dushanbe » Thu Jun 16, 2022 9:17 am

taio wrote:
Thu Jun 16, 2022 9:10 am
I'm not surprised - £60k in the 1970s was a significant amount in real terms and many multiples of the average price of a house back then.
Absolutely, a £60,000 house in the 1970s must have been huge.

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Thu Jun 16, 2022 9:36 am

JohnMcGreal wrote:
Thu Jun 16, 2022 7:32 am
I guess our wide and generous furlough scheme is also the reason why we're set to have the worst performing economy in the G20, bar Russia.

https://www.ft.com/content/ee2ce542-eb1 ... a8200a47ae
We're middle of the road in a comparison of where the economy is compared to pre-covid levels.

"we're set to have" = economists are making predictions again. We know how good they are at predictions.

Rowls
Posts: 13163
Joined: Wed Jan 20, 2016 11:00 pm
Been Liked: 5065 times
Has Liked: 5124 times
Location: Montpellier, France

Re: Interest Rate Up

Post by Rowls » Thu Jun 16, 2022 9:37 am

Lancasterclaret wrote:
Thu Jun 16, 2022 7:39 am
I used to believe this too

Its a struggle believing it at the moment though
There's obviously a few exceptions but what on earth has happened recently? High level politician caught embezzling funds?

Post Reply