BOE 3rd November Rate Announcement
Discussion
Joey Deacon said:
Agreed, in reality it is only punishing those people who's fixed rates happen to be coming to an end, 100,000 per month according to the BBC.
It will massively slow down new purchases too,don’t forget FTB getting on the ladder. As well as new BTL purchase not being feasible as lenders rates are 6-7% and most new purchases (or existing purchases that are mortaged upto the max)won’t meet the stress tests (ex the mortgage work are 7.5% interest rate at 145% stress test ).wildoliver said:
I got an email from Anglia car auctions this morning with guide prices on some fairly mundane classics that are still well over the value of the cars as the market has been for years now, I have a real feeling that people are dumping money in to classic cars as a safe place to put it, last time that happened was back at the start of the 90s and the market went through the floor leaving people holding deeply ordinary cars they had bought at extraordinary prices.
I think this is already happening, the results for the last auction I looked at showed that most cars met between half and two thirds of their reserve price. Like you say, a lot of 80s and 90s rubbish that you couldn't give away pre Covid has now reached silly levels.I think a lot of people who bought these cars, paid way over the odds and then realised they are rubbish will be desperate to offload them.
If only we were part of a local ginormous free trade/labour movement block, which would mitigate the worst effects of the coming economic storms by boosting our international trade significantly, adding desperately needed flexibility to the labour market, and protecting our vulnerable currency from disaster capitalists both internal and external. I wonder if there's one we could join. I think I'll do a bit of my own research.
Bannock said:
If only we were part of a local ginormous free trade/labour movement block, which would mitigate the worst effects of the coming economic storms by boosting our international trade significantly, adding desperately needed flexibility to the labour market, and protecting our vulnerable currency from disaster capitalists both internal and external. I wonder if there's one we could join. I think I'll do a bit of my own research.
The problem is, people were persuaded to vote leave due to the amount of Xenophobic hate being pushed their way during the campaign. Trouble is, once these people were no longer allowed to freely work in the UK it soon became apparent that there were not enough people to do the jobs that most UK people refuse to do.Even this might not have been the end of the world but Covid hit, the world went full retard and suddenly money was no object so the government printed as much as was required.
Paying tens of millions of people to stay home for a year, I doubt many people complained about that one. £50K bounce back loans to anyone with a Ltd. company backed by the government, no wonder the banks could not hand it out fast enough. £37 billion on a track and trace system that didn't work, plus billions spent on useless PPE. It seemed that it didn't matter how much money was printed and what it was actually spent on as long as the government were seen to be doing something.
Now we are in this mess plus add in the recession that should have happened in 2007 and you can see we are in for a major party hangover.
I just see pain, especially for all those people who pissed away all the money they saved in lockdown on new cars and hot tubs.
Joey Deacon said:
Jurgen Schmidt said:
Hard to see what effect it'll have, it's not like consumers are out there splashing their cash - inflation is being caused by systemic factors
Agreed, in reality it is only punishing those people who's fixed rates happen to be coming to an end, 100,000 per month according to the BBC.I guess they assume that because people have less money to spend as it is all being eaten up by mortgage payments this will mean prices and inflation have to fall.
Interesting that this is likely to cause house prices to fall which is the one thing the Tory government have always tried to protect no matter what.
Personally I think we are in for a big recession now, the big job lay offs will be happening in the new year.
Inflation is not just internal to the UK.
The pound is falling because we import too much.
If the pound falls more that will increase inflation.
It's really not just about mortgages.
There is a lot going on, it's not simple, the world is changing and post Brexit, the UK's role is changing.
I think we will see that Sunak is just as impotent as Truss, possibly more so.
I think the new year may well be messy.
People will reduce the amount they spend on overpriced drinks and meals, that will feed into job losses in the hospitality sector.
wildoliver said:
The worry for me is the recession we keep expecting, it just seems to keep getting pushed back and back. And generally we know from experience the further back it gets pushed the worse it will be when it does finally crash.
The biggest worry for me is while some consumers aren't spending, some are still spending like water, I don't know where the money's coming from because I'm sure as hell not seeing any of it. I got an email from Anglia car auctions this morning with guide prices on some fairly mundane classics that are still well over the value of the cars as the market has been for years now, I have a real feeling that people are dumping money in to classic cars as a safe place to put it, last time that happened was back at the start of the 90s and the market went through the floor leaving people holding deeply ordinary cars they had bought at extraordinary prices.
A lot of truth in that, but prices for so-called classics from the 70s and 80s have been high for quite a while now.The biggest worry for me is while some consumers aren't spending, some are still spending like water, I don't know where the money's coming from because I'm sure as hell not seeing any of it. I got an email from Anglia car auctions this morning with guide prices on some fairly mundane classics that are still well over the value of the cars as the market has been for years now, I have a real feeling that people are dumping money in to classic cars as a safe place to put it, last time that happened was back at the start of the 90s and the market went through the floor leaving people holding deeply ordinary cars they had bought at extraordinary prices.
But if you think old cars and bikes are expensive, take a look around a main dealer for new prices.
Joey Deacon said:
I think this is already happening, the results for the last auction I looked at showed that most cars met between half and two thirds of their reserve price. Like you say, a lot of 80s and 90s rubbish that you couldn't give away pre Covid has now reached silly levels.
I think a lot of people who bought these cars, paid way over the odds and then realised they are rubbish will be desperate to offload them.
While I'm old enough to be thankful that the mortgage rises won't affect me, since my retirement project is to restore, then sell my old RS2000 then this isn't great news to me. I've seen some silly prices on Autotrader and PH classifieds, even a recent episode of Bangers & Cash had a complete basket case version of mine go for £26k. Mine is mostly rot free, bar the strut tops which I've nearly finished, but due to a long lay up needs everything else doing; brakes, exhaust, radiator, etc.I think a lot of people who bought these cars, paid way over the odds and then realised they are rubbish will be desperate to offload them.
Maybe I'll miss the boat on this one, though I have to treat as a therapeutic pastime and since I've owned it since 1995, then I guess waiting for things to pick up might be on the cards. At least I'll have the excuse to keep it longer and enjoy it a bit.
I'm wondering what the knock on might be for things like fixed bonds? I'm due a lump sum anytime now and not sure whether to lock it into a 1 year at 4.6% (or whatever the best rate is by the time I get the funds through) or something longer. What I don't want to do is dither about with it in a 3% account I have for too long and lose out on interest payments for the sake of a fraction of a percent.
My gut feeling is to put it in a shorter term (maybe 6 month fixed bond), then see whether I can get 3-5 year at something over 5% by then and lock it in.
OutInTheShed said:
I think the new year may well be messy.
People will reduce the amount they spend on overpriced drinks and meals, that will feed into job losses in the hospitality sector.
Even though it'll cause a recession I hope people do rein in their spending. The price-gouging going on by some businesses is disgraceful and seems to bare very little relation to actual costs going up. One example from the last week, my mate feeds his woodburner with the occasional bag of coal - gone from £8 to £13. You can't tell me this is just covering costs. It's simply "well everyone else is sticking up their prices, might as well see how much we can get away with"People will reduce the amount they spend on overpriced drinks and meals, that will feed into job losses in the hospitality sector.
The sooner people stop spending the sooner we'll hopefully see things calm down.
Two year recession is due by the looks of things, along with a doubling of unemployment, although I think we'll also see less people available in the workforce. My company uses an agency that brings in contractors from India on 1-2yr employment visas, we can't convince anyone to come over anymore, it's too expensive to live here in the short term.
skinnyman said:
Two year recession is due by the looks of things, along with a doubling of unemployment, although I think we'll also see less people available in the workforce. My company uses an agency that brings in contractors from India on 1-2yr employment visas, we can't convince anyone to come over anymore, it's too expensive to live here in the short term.
One of my old client companies has operations in the UK and India.Used to be all the high end design was done in the UK, that's progressively moved to India as the universities there are turning out good graduates and also doing good research in the field.
10 years ago I was working with some young Polish engineers in the UK, they've gone back to Poland where there is a lot of investment in new factories, good job prospects and they can buy a four bedroom house.
The UK is losing relevance on the world scene, a lot of our edge has slipped away over the last 25 years.
What is it that's supposed to recover in two years' time? Coffee shops?
Panamax said:
BOE forced to increase rates purely to prevent collapse of the currency.
The effect of increased borrowing costs on top of energy price rises and food price inflation will trash the whole economy, plunging UK into a long recession from which there's no obvious route to recovery.
There is one. But nobody wants to talk about it. Because apparently in a democracy the people are not entitled to change their minds.The effect of increased borrowing costs on top of energy price rises and food price inflation will trash the whole economy, plunging UK into a long recession from which there's no obvious route to recovery.
Joey Deacon said:
Isn't it baked into all the products you can buy already with the amount Truss and Kawsi spooked the markets?I guess it'll affect those on variable and tracker mortgages.
Wouldn't want to be one of those that stretched themselves with a massive mortgage last year.
The rate rise is long overdue and BoE should have done it 6+ months ago.
It needs to go higher yet to get inflation under control and reduce public spending. Savings rates also need to start looking attractive again.
Take a look around, all pubs, restaurants, hign end luxury goods etc. are at their highest still with no sign of spenders reining in finances.
Some of us remember mortgage rates of above 10% that figure is lost on the current millennials who have been used to very low interest rates for years.
It needs to go higher yet to get inflation under control and reduce public spending. Savings rates also need to start looking attractive again.
Take a look around, all pubs, restaurants, hign end luxury goods etc. are at their highest still with no sign of spenders reining in finances.
Some of us remember mortgage rates of above 10% that figure is lost on the current millennials who have been used to very low interest rates for years.
wildoliver said:
The worry for me is the recession we keep expecting, it just seems to keep getting pushed back and back. And generally we know from experience the further back it gets pushed the worse it will be when it does finally crash.
The biggest worry for me is while some consumers aren't spending, some are still spending like water, I don't know where the money's coming from because I'm sure as hell not seeing any of it. I got an email from Anglia car auctions this morning with guide prices on some fairly mundane classics that are still well over the value of the cars as the market has been for years now, I have a real feeling that people are dumping money in to classic cars as a safe place to put it, last time that happened was back at the start of the 90s and the market went through the floor leaving people holding deeply ordinary cars they had bought at extraordinary prices.
Classic cars would be one of the things I expect to see fall now rich people have a safe place to put their cash without worrying about storage, maintenance, theft and fire.The biggest worry for me is while some consumers aren't spending, some are still spending like water, I don't know where the money's coming from because I'm sure as hell not seeing any of it. I got an email from Anglia car auctions this morning with guide prices on some fairly mundane classics that are still well over the value of the cars as the market has been for years now, I have a real feeling that people are dumping money in to classic cars as a safe place to put it, last time that happened was back at the start of the 90s and the market went through the floor leaving people holding deeply ordinary cars they had bought at extraordinary prices.
Armitage.Shanks said:
Some of us remember mortgage rates of above 10% that figure is lost on the current millennials who have been used to very low interest rates for years.
Considering the ratios of earnings to average house prices, I wouldn't be surprised if the the current ~6% rates on offer are effectively more expensive than 10% rates 30-40 years ago.Anyone have stats on this?
gazapc said:
Armitage.Shanks said:
Some of us remember mortgage rates of above 10% that figure is lost on the current millennials who have been used to very low interest rates for years.
Considering the ratios of earnings to average house prices, I wouldn't be surprised if the the current ~6% rates on offer are effectively more expensive than 10% rates 30-40 years ago.Anyone have stats on this?
10% interest rates were when? 1990? I know you could buy a nice 3 bed semi round here for 20k then, no idea what the average wage would have been? £8-£10k?
gazapc said:
Armitage.Shanks said:
Some of us remember mortgage rates of above 10% that figure is lost on the current millennials who have been used to very low interest rates for years.
Considering the ratios of earnings to average house prices, I wouldn't be surprised if the the current ~6% rates on offer are effectively more expensive than 10% rates 30-40 years ago.Anyone have stats on this?
I'll see if I can find the link, but if not hopefully someone else will. It sounded fairly sensible, if very frightening at the same time.
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