BOE 3rd November Rate Announcement
Discussion
wormus said:
So what’s changed? 4% base rate is pretty normal if you look back over decades, not the sub 1% the kids are used to.
Massive house price inflation which means current mortgage rates are probably comparable with the 15% rates in the 90s in terms of what it means for affordability Edited by wormus on Thursday 3rd November 20:43
Leicester Loyal said:
kingston12 said:
skinnyman said:
Armitage.Shanks said:
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.
If I had a £1 for everyone over the age of 50 that says "I remember when blah blah blah" I'd have paid off my mortgage by now. It's an entirely different economic landscape, please stop banging on about it.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.
There is much more debt and asset prices are higher, which has been fuelled by years of low interest rates and looser borrowing, but the external factors still have a big influence, hence we are now seeing interest rates that are not really compatible with the current levels of assets prices and debt.
'Leeds Building Society said today’s average two-year fixed rate mortgage rate of 6.43 per cent may seem lower than the mortgage rates of 15 per cent in 1980, but surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the increase in household indebtedness, mean that the current mortgage rates are equivalent to a rate of 25.7 per cent in 1980.
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3 per cent of disposable income. Today, those figures are around £292,000 and 45.1 per cent respectively.
In a statement, the mutual said: “Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.'
Average mortgage costs 45.1% of household income ffs!
It was bound to happen after years of governments trying to find ways of making people borrow more and keep the plates spinning on an unsusatainble situation. We just have to hope that the inevitable damage is as small as possible.
Wasn’t all this stress tested when people were getting mortgages?
“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
Mr Whippy said:
Wasn’t all this stress tested when people were getting mortgages?
“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
Harsh lesson????“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
What I looked for here wasn't just comments on the rate decision - but also some comments on Baileys speech....
Whilst the GDP prediction and 500k job cuts was pretty dire, he also said the market was over estimating terminal rate (unlike Powell who says the opposite for USD).
That points to a either a significant slowing of hikes or a whipsaw effect (what goes up, must come down)....
4.75 terminal always looked punchy given the mess we are in.
rossub said:
Bannock said:
There is one. But nobody wants to talk about it. Because apparently in a democracy the people are not entitled to change their minds.
Oh shut the f
k up about Brexit 
Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your
right back.Leicester Loyal said:
https://www.yorkshirepost.co.uk/business/why-housi...
'Leeds Building Society said today’s average two-year fixed rate mortgage rate of 6.43 per cent may seem lower than the mortgage rates of 15 per cent in 1980, but surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the increase in household indebtedness, mean that the current mortgage rates are equivalent to a rate of 25.7 per cent in 1980.
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3 per cent of disposable income. Today, those figures are around £292,000 and 45.1 per cent respectively.
In a statement, the mutual said: “Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.'
Average mortgage costs 45.1% of household income ffs!
Not really sure what 1980 has to do with anything, prices shot up between then and when the wheels came off in '88.'Leeds Building Society said today’s average two-year fixed rate mortgage rate of 6.43 per cent may seem lower than the mortgage rates of 15 per cent in 1980, but surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the increase in household indebtedness, mean that the current mortgage rates are equivalent to a rate of 25.7 per cent in 1980.
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3 per cent of disposable income. Today, those figures are around £292,000 and 45.1 per cent respectively.
In a statement, the mutual said: “Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.'
Average mortgage costs 45.1% of household income ffs!
When you get away from the angst about mortgages, interest rates are dictated by bigger issues.
Basically the rest of the world is raising rates and the UK economy is in no state to have lower rates than everyone else.
Mr Whippy said:
Wasn’t all this stress tested when people were getting mortgages?
“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
Stress testing was never really done properly, it was just designed to give an illusion of responsible lending.“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
It assessed whether borrowers could afford x% rise in interest rates, but there is a difference between physically affording a much higher mortgage payment and actually doing so while maintaining a reasonable lifestyle, particularly with other costs going up.
It also seemed to not properly take possible unemployment into account. If a couple borrow based on five times their joint salary and one of them loses their job, they are likely to be struggling even before interest rates go up.
I definitely have sympathy for those affected though. Perhaps some should have been more cautious, but the government heavily promoted this casino-style of economy as the new normal and a a lot of people acted accordingly.
Bannock said:
Well done for proving my point.
Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your right back.
Bailey is economically illiterate? Really??? Just because you don't agree, doesn't mean he's a simpleton. Is the MPCs latest edition a fool for backing ultra low rates? She's a published academic?Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your
right back.Perhaps he's dealing with a structural UK problem that far predates Brexit? Whatever people's views on that are.
GBP has been on a 35year+ decline, Brexit is 6years old. I mean the B word might be the cherry, icing and sprinkles on top the cake of poo - but the problems are manifestly larger than that.
Of course Brexit has a negative affect, but it's 20% of the problem. It would be unusual to solve the 20% and ignore the 80%. I sense some over investment.
The multitudes of Brexit ills (quite a few), are easier solved than reversing decades of low wage growth supplemented with monetary expansion. As Mr Whippy points out, the pain fixing that will be worse than politicians fixing the B word.
jamiedimonBTClover said:
Bannock said:
Well done for proving my point.
Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your right back.
Bailey is economically illiterate? Really??? Just because you don't agree, doesn't mean he's a simpleton. Is the MPCs latest edition a fool for backing ultra low rates? She's a published academic?Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your
right back.Perhaps he's dealing with a structural UK problem that far predates Brexit? Whatever people's views on that are.
GBP has been on a 35year+ decline, Brexit is 6years old. I mean the B word might be the cherry, icing and sprinkles on top the cake of poo - but the problems are manifestly larger than that.
Of course Brexit has a negative affect, but it's 20% of the problem. It would be unusual to solve the 20% and ignore the 80%. I sense some over investment.
The multitudes of Brexit ills (quite a few), are easier solved than reversing decades of low wage growth supplemented with monetary expansion. As Mr Whippy points out, the pain fixing that will be worse than politicians fixing the B word.
k up" about it, is not really helpful. We have to admit that it has caused *some* of the damage, and that we there are ways to alleviate *those* impacts. Why shouldn't we strive to improve the situation *where possible*? Get the economy back on its feet, give our exporters their markets back. Food and drink exports are down, car exports are down, SMEs have given up on the EU as a marketplace, and nothing is hoving into view to offset those losses to our economy.
To fail to admit this and addresse it is a sign of economic illiteracy, or to be more charitable bone-headed ideology.
Bannock said:
Yes, you're not wrong. I do not claim the B-word is the sole cause of our woes. But it is, inescapably, and exacerbating factor. A completely unnecessary one which, with the political will, could be mitigated if we would simply admit this fact. Telling people to "shut the fk up" about it, is not really helpful.
We have to admit that it has caused *some* of the damage, and that we there are ways to alleviate *those* impacts. Why shouldn't we strive to improve the situation *where possible*? Get the economy back on its feet, give our exporters their markets back. Food and drink exports are down, car exports are down, SMEs have given up on the EU as a marketplace, and nothing is hoving into view to offset those losses to our economy.
To fail to admit this and addresse it is a sign of economic illiteracy, or to be more charitable bone-headed ideology.
Who said "shut the fuxk up about it"? I didn't, I said it's a part of the problem, but really isn't the biggest issue right now.k up" about it, is not really helpful. We have to admit that it has caused *some* of the damage, and that we there are ways to alleviate *those* impacts. Why shouldn't we strive to improve the situation *where possible*? Get the economy back on its feet, give our exporters their markets back. Food and drink exports are down, car exports are down, SMEs have given up on the EU as a marketplace, and nothing is hoving into view to offset those losses to our economy.
To fail to admit this and addresse it is a sign of economic illiteracy, or to be more charitable bone-headed ideology.
It simply isn't the biggest game in town, and as you rightly point out Brexit is about political ideology - it might be prudent for the "Old Lady" to stay the fuxk out of it. The BoE is supposed to be apolitical. Dhinga being on the MPC is, Carney too; I wouldn't read Baileys silence as an endorsement - there are much bigger fish to fry.
Save your ire for when Hunt and Rishi screw us fiscally. That's going to be far closer to ideological failings.
jamiedimonBTClover said:
Bannock said:
Yes, you're not wrong. I do not claim the B-word is the sole cause of our woes. But it is, inescapably, and exacerbating factor. A completely unnecessary one which, with the political will, could be mitigated if we would simply admit this fact. Telling people to "shut the fk up" about it, is not really helpful.
We have to admit that it has caused *some* of the damage, and that we there are ways to alleviate *those* impacts. Why shouldn't we strive to improve the situation *where possible*? Get the economy back on its feet, give our exporters their markets back. Food and drink exports are down, car exports are down, SMEs have given up on the EU as a marketplace, and nothing is hoving into view to offset those losses to our economy.
To fail to admit this and addresse it is a sign of economic illiteracy, or to be more charitable bone-headed ideology.
Who said "shut the fuxk up about it"? I didn't, I said it's a part of the problem, but really isn't the biggest issue right now.k up" about it, is not really helpful. We have to admit that it has caused *some* of the damage, and that we there are ways to alleviate *those* impacts. Why shouldn't we strive to improve the situation *where possible*? Get the economy back on its feet, give our exporters their markets back. Food and drink exports are down, car exports are down, SMEs have given up on the EU as a marketplace, and nothing is hoving into view to offset those losses to our economy.
To fail to admit this and addresse it is a sign of economic illiteracy, or to be more charitable bone-headed ideology.
It simply isn't the biggest game in town, and as you rightly point out Brexit is about political ideology - it might be prudent for the "Old Lady" to stay the fuxk out of it. The BoE is supposed to be apolitical. Dhinga being on the MPC is, Carney too; I wouldn't read Baileys silence as an endorsement - there are much bigger fish to fry.
Save your ire for when Hunt and Rishi screw us fiscally. That's going to be far closer to ideological failings.
k up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the f
k up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.Bannock said:
"rossub" said "shut the fk up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.
Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the fk up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.
Because political ideology isn't what the BoE does. And nor should it.... it's simply not in the mandate. I assumed you read the thread title. ;-)k up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the f
k up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.Failing to act on inflation quick enough, screwing QT, allowing suspicious Gilt market activity- all BoE issues.
Screwing trade deals, is a govt function. The BoE can only clean up the mess. The BoE doesn't do the deals, and if they actually come out and say "govt is stuffed full of muppets", fiscal and monetary policies look even more disjointed. Even if they are.
Turning this into another Brexit thread (when there are many), is to miss the bigger issues. You'd have to be mad to argue that Brexit is short term positive, this thread is about BoE responding to actual data - not whiffy ideologies.
The biggest issue the UK faces right now is how hard we are going to hit the floor (this won't be a soft landing like the US). And then how do we pick ourselves back up (which is going to be 80% driven by fiscal and structural reform). And perhaps a EU back scratch in a few years time.
Bannock said:
"rossub" said "shut the fk up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.
Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the fk up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.
Problem is, we haven't done anything positive since the referendum.k up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the f
k up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.Mostly we've got the same problems we had in 2005.
jamiedimonBTClover said:
Bannock said:
"rossub" said "shut the fk up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.
Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the fk up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.
Because political ideology isn't what the BoE does. And nor should it.... it's simply not in the mandate. I assumed you read the thread title. ;-)k up about brexit" on the previous page. Sorry, I was assuming you'd have read the thread and would realise I wasn't saying that you said it.Brexit is being adhered to in a purist, ideological form, which is simply the most damaging economic form we could have undertaken. It doesn't have to be this way. Maybe it isn't the biggest issue, maybe it is, but either way it's one we can at least partly deal with to mitigate the situation by loosening the political ideology around it and working out a better trade relationship with the EU. Why argue against that?
Why should I save my ire? Why can't ire be deployed wherever I see fit? It's staring us in the face that we can do something to ameliorate the situation, and yet we are told to "shut the f
k up" and "save our ire". Surely, if Brexit was such a great and positive and beneficial project, we wouldn't be having this conversation. I'd be saying "thank fk we left the EU, look how much worse a situation we'd be in now if we hadn't". But I'm not. Because the opposite is true. When in a hole, stop digging.Failing to act on inflation quick enough, screwing QT, allowing suspicious Gilt market activity- all BoE issues.
Screwing trade deals, is a govt function. The BoE can only clean up the mess. The BoE doesn't do the deals, and if they actually come out and say "govt is stuffed full of muppets", fiscal and monetary policies look even more disjointed. Even if they are.
Turning this into another Brexit thread (when there are many), is to miss the bigger issues. You'd have to be mad to argue that Brexit is short term positive, this thread is about BoE responding to actual data - not whiffy ideologies.
The biggest issue the UK faces right now is how hard we are going to hit the floor (this won't be a soft landing like the US). And then how do we pick ourselves back up (which is going to be 80% driven by fiscal and structural reform). And perhaps a EU back scratch in a few years time.
I really don't get this "turning it into a brexit thread is to miss the bigger issues" point. It's one of the factors. It's pertinent. But nobody's turning the thread into a brexit thread. To discuss it is not to exclude the other pieces of the picture, and those parts are also being discussed here. It's baffling that people should constantly seek to close down discussion of pertinent aspects of a topic.
Bannock said:
OK. I think it more productive to cinclude in this conversation "what can we do about this mess as a country", and what factors have driven the BoE decision and what can be done about them, by the BoE and other agencies. It's going to be a bit of a dry old thread otherwise if it's just "yes, the BoE did a thing". I assumed that the thread was inviting discussion around its title.
I really don't get this "turning it into a brexit thread is to miss the bigger issues" point. It's one of the factors. It's pertinent. But nobody's turning the thread into a brexit thread. To discuss it is not to exclude the other pieces of the picture, and those parts are also being discussed here. It's baffling that people should constantly seek to close down discussion of pertinent aspects of a topic.
It's not being shut down. It's just being pointed out I really don't get this "turning it into a brexit thread is to miss the bigger issues" point. It's one of the factors. It's pertinent. But nobody's turning the thread into a brexit thread. To discuss it is not to exclude the other pieces of the picture, and those parts are also being discussed here. It's baffling that people should constantly seek to close down discussion of pertinent aspects of a topic.
1. The ordering of issues UK plc faces
2. Whose job (or mandate) it is to fix certain things
The BoE simply can't fix Brexit. Its way screwed.
They can respond to inflation (whatever the cause) and financial stability within a narrow window.
But expecting Bailey to give the govt a public F- for attainment - might be hoping for to much or looking for validation....
Try this one.
Given the latest raft of house price data, what do you think most of the population will be worried about?
Lloyd's base case for house price inflation is -7% in 2023.
The stress case is worse. Others have less bad base cases, for balance.
That will be a much larger concern for many than trade deals - which are only a concern to a few. That's not to say trade deals are irrelevent, but the 2 things are pretty unrelated. The BoE can do something on credit supply, but sorting Trade friction is beyond them....
Since (IMHO) the BoE can't fix Brexit, the only path open is actually even more dicy. Pump asset values to compensate. And that's even more insane than anything the govt can cook up (although I'm sure some of the elected muppets would quite fancy it).
jamiedimonBTClover said:
Mr Whippy said:
Wasn’t all this stress tested when people were getting mortgages?
“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
Harsh lesson????“What if rates go up” affordability checks?
Didn’t people kinda imagine this might happen?
The changes in interest rates have been well telegraphed.
I have no sympathy.
And ultimately this is what the country needs.
Inflation will be back at 2% shortly, as spending shrinks back and people lose jobs.
What I looked for here wasn't just comments on the rate decision - but also some comments on Baileys speech....
Whilst the GDP prediction and 500k job cuts was pretty dire, he also said the market was over estimating terminal rate (unlike Powell who says the opposite for USD).
That points to a either a significant slowing of hikes or a whipsaw effect (what goes up, must come down)....
4.75 terminal always looked punchy given the mess we are in.
The actions are all that are relevant in absolute terms, as that's what's "actually going to happen" after the emotional responses to his speech become history and the reality becomes the actions taken.
Simply put. Hot inflation is resolved by job losses. Lower demand.
This has happened time and again. There is no avoiding it. These cycles of boom and bust are just the nature of humans.
Ideally our government should moderate the boom, to subdue the bust, but they're just as human as us.
And in a world where other countries will front-run the boom and out-compete us, we have no choice but to join the race.
This is the aggregate nature of millions and billions of interacting humans. It's unavoidable. All you can do is plan accordingly and not blindly imagine the government or banks have your interests at heart.
I might be way off the mark with this and I have no real point of view on brexit but I find it hard to understand why people think its had such a hard impact on us. Personally we should have had plans in place, rules, ideas whatever you may call it to make the country as best as possible. Blaming or relying on the EU is just asking for pain anyway.
There is no real reason the UK couldn't have been perfectly fine - the caveate being the government had the countries best intrests are heart, think about being self sufficent and making good deals with countries and stop getting roped into the rest of the worlds bullst.
We have no storage for Gas, no gold, poor knowledge of pretty much everything, even now they are stiffling farming in the UK. We seem to make our own mess really well and blame others.
There is no real reason the UK couldn't have been perfectly fine - the caveate being the government had the countries best intrests are heart, think about being self sufficent and making good deals with countries and stop getting roped into the rest of the worlds bulls
t. We have no storage for Gas, no gold, poor knowledge of pretty much everything, even now they are stiffling farming in the UK. We seem to make our own mess really well and blame others.
OutInTheShed said:
Leicester Loyal said:
https://www.yorkshirepost.co.uk/business/why-housi...
'Leeds Building Society said today’s average two-year fixed rate mortgage rate of 6.43 per cent may seem lower than the mortgage rates of 15 per cent in 1980, but surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the increase in household indebtedness, mean that the current mortgage rates are equivalent to a rate of 25.7 per cent in 1980.
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3 per cent of disposable income. Today, those figures are around £292,000 and 45.1 per cent respectively.
In a statement, the mutual said: “Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.'
Average mortgage costs 45.1% of household income ffs!
Not really sure what 1980 has to do with anything, prices shot up between then and when the wheels came off in '88.'Leeds Building Society said today’s average two-year fixed rate mortgage rate of 6.43 per cent may seem lower than the mortgage rates of 15 per cent in 1980, but surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the increase in household indebtedness, mean that the current mortgage rates are equivalent to a rate of 25.7 per cent in 1980.
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3 per cent of disposable income. Today, those figures are around £292,000 and 45.1 per cent respectively.
In a statement, the mutual said: “Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.'
Average mortgage costs 45.1% of household income ffs!
When you get away from the angst about mortgages, interest rates are dictated by bigger issues.
Basically the rest of the world is raising rates and the UK economy is in no state to have lower rates than everyone else.
All I'm posting is that we spend a lot more of our disposible income on a mortgage now than we did 40 years ago.
Bannock said:
Well done for proving my point.
Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your right back.
You were in the minority and you lost, get over it. All your moaning isn’t going to change anything.Even the Governor of the Bank of England, who is proving himself to be an utter liability and was only appointed because he had been in favour of the B-word (what a surprise that such a person should turn out to be mainly economically illiterate), said yesterday on Channel 4 News that it's a uniquely UK problem we have, but obviously can't mention the B-word:
https://twitter.com/PippaCrerar/status/15882507933...
Have your
right back.
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