The obsession with interest rates is infuriating. This is a supply driven crisis, not a demand one like in the US. The only way to solve inflation is to solve the supply issues – a large part of which is Brexit (France’s inflation rate is only half ours).
Other global causes of High inflation cannot be immediately solved so relatively high inflation will persist, but solving Brexit would lower it significantly.
We do NOT want to be forcing a severe recession at this time as the U.K. is already in a total economic slump. Turning a supply side crisis into a demand one will be catastrophic. Stagflation, which is what the U.K. is teetering on, is disastrous.
*Qualifiers: The EU as a whole is significantly more reliant on Russian gas and oil than the U.K. – the closest Doppelgänger to the U.K. is France in that both countries are fairly independent from Russia
In addition, it’s clear that Brexit is demolishing the U.K. economy which is why we don’t have the economic space to raise interest rates since Brexit has already massively reduced economic growth. Were it not for Brexit, we’d have more economic room to forge a recession
It’s pretty grim. The economy can’t grow if people can’t spend. The wind back in the sector I work in is already very apparent ! It’s pretty dismal. Zero overtime at work and they are normally begging for you to do it during the Christmas “rush”
The price of energy is a kick in the ass, I live in my own home, chose to buy a very old house about 4 yrs ago( 150yrs old ) woooo it chews gas at the moment and I must be using anywhere between £8/£10 a day when I don’t have the multi fuel burner going. Currently I have that going 24hrs a day when I’m not at work. But there is still a cost to that, which is cheaper than running the combi to heat the house up. Glad I had it installed when I moved in.
My mortgage is due for renewal next September. I’m currently on 2.65 %
I’m hoping that by then the rates just aren’t through the roof by then. Or roll the dice and take on a tracker should I need to, I wouldn’t want to be tied into a fixed of the rates are high.
Best I can do is when I can, smash some overtime in between now and my mortgage renewal and pay as much as I’m allowed extra into it.
Luckily I can have that opportunity.
The outlook looks grim for those less fortunate.
Price to pay for a tanked economy for 2 years of lockdowns. I never agreed with it as I could see this happening.
But here we are 🤷♂️
The whole planet is suffering supply problems currently, and high inflation.
However we have the *5th highest* inflation in the G20 at 10.7%. Even Russia is only at 12%
The only difference is that we have Brexit causing us even more supply problems that other countries don’t have to deal with
Isn’t the point of raising interest rates to curb spending and encourage people to save instead? That’s fine if people are spending on luxury goods, but it doesn’t work when they’re spending on food and heating. You’re not going to say “Ooh, I was going to heat my house so I don’t freeze to death and eat meals for the next week, but I think I’ll stick that money in my HSBC account instead.”
Theres got to be a reason for the absolute destruction of our country and those with the power of the pen to sit back and just watch .. there must be more to this surely
I don’t get it, they were speculating on the rise on the news this morning, and they were saying that they’d raise interest rates to get people to be spending less.
Are they not paying attention? I can’t think of many people who at the moment are going “Yay! Let’s splurge!”. The increased spending is all on food and energy! The only people who aren’t trying to restrict their spending at the moment are likely well enough off that they don’t need to give a damn about what the interest rate is…
Deepening a recession because you’re afraid that workers in this country will be paid a fair wage:
> Bailey forecast skill shortages would push wages higher and prevent inflation falling towards the Bank’s 2% target as fast as he hoped.
> “There is a risk that [inflation won’t fall] in that way, particularly because the labour market and the labour supply in this country is so tight.
> “And that’s why, really, we had to raise interest rates today, because we see that risk as really quite pronounced.”
At a time when many people are unable to heat their homes.
These people are subhuman.
Honestly, I feel like if wages had grown at the rate everything else did (mainly house prices) we’d probably be better insulated from the damage of higher interest rates.
The risk of losing homes comes because we let the gap between house prices and salaries get too wide, and interest rates look like a hand grenade vs a very dodgy looking game of Jenga.
I wonder is the end goal of all this fuckery to ensure the masses get tied into longer mortages / debt and therefore have to work into their 80’s
It’s stunk since “convid” came along
Why were interest rates so damn low for the past 15 years?
Been saving years to finally get a deposit for a mortgage and with all these interest rate increases dont know why I even bothered. There no chance avg person can afford this.
Its a real perfect storm, I sympathize a lot with people who are hit by this but the BoE doesn’t really have much of a choice given the need to triangulate inflation, with higher competitive rates for foreign exchange with the strength of sterling. The Liz Truss disaster budget shows what happens when you try to go against international currency markets, the BoE has to make sterling somehow competitive given our debt and position as a net importer.
The people asking ‘why were interest rates low for so long’ are I think focusing on the wrong issue, it is the BoE’s responsibility to control monetary policy and keep inflation around 2%. For a long time its done its job and has done it reasonably well. Rates were low because those were the rates necessary to fulfill its remit.
The absence of basic credit controls and the shambolic nature of UK housing policy dates back to 50 years of central government failure all the way to the Barber Boom, right to buy and the abolition of credit controls following the failure of monetarism in the 80s. This has been allowed to build for the very simple reason that no one is willing to threaten house prices, landlords and housing developers.
The bubble had to pop sometime.
Turns out that the trick to defeating Putin is to raise interest rates huh? Because apparently that is going to get him to start letting grain ships though and oil/gas flowing again.
19 comments
Historically 3.5% is still **too low**. I say raise it to between 5 – 7% and let’s be have done with it. Get it over with…
Bailey needs to pull a 75bp out, inflation 10%, food inflation 20% he’s a clown look at his time in FCA!!
4million mortgages up for renewal next year,, get ready for 7-8 2yrs
People who have bought a house at a massively inflated price with historically low interest rates pulling the shocked pikachu face at this lmao
https://www.resolutionfoundation.org/press-releases/britains-26-billion-mortgage-hike-five-million-households-set-for-average-mortgage-bill-increases-of-5100-by-end-of-2024/
[deleted]
The obsession with interest rates is infuriating. This is a supply driven crisis, not a demand one like in the US. The only way to solve inflation is to solve the supply issues – a large part of which is Brexit (France’s inflation rate is only half ours).
Other global causes of High inflation cannot be immediately solved so relatively high inflation will persist, but solving Brexit would lower it significantly.
We do NOT want to be forcing a severe recession at this time as the U.K. is already in a total economic slump. Turning a supply side crisis into a demand one will be catastrophic. Stagflation, which is what the U.K. is teetering on, is disastrous.
*Qualifiers: The EU as a whole is significantly more reliant on Russian gas and oil than the U.K. – the closest Doppelgänger to the U.K. is France in that both countries are fairly independent from Russia
In addition, it’s clear that Brexit is demolishing the U.K. economy which is why we don’t have the economic space to raise interest rates since Brexit has already massively reduced economic growth. Were it not for Brexit, we’d have more economic room to forge a recession
It’s pretty grim. The economy can’t grow if people can’t spend. The wind back in the sector I work in is already very apparent ! It’s pretty dismal. Zero overtime at work and they are normally begging for you to do it during the Christmas “rush”
The price of energy is a kick in the ass, I live in my own home, chose to buy a very old house about 4 yrs ago( 150yrs old ) woooo it chews gas at the moment and I must be using anywhere between £8/£10 a day when I don’t have the multi fuel burner going. Currently I have that going 24hrs a day when I’m not at work. But there is still a cost to that, which is cheaper than running the combi to heat the house up. Glad I had it installed when I moved in.
My mortgage is due for renewal next September. I’m currently on 2.65 %
I’m hoping that by then the rates just aren’t through the roof by then. Or roll the dice and take on a tracker should I need to, I wouldn’t want to be tied into a fixed of the rates are high.
Best I can do is when I can, smash some overtime in between now and my mortgage renewal and pay as much as I’m allowed extra into it.
Luckily I can have that opportunity.
The outlook looks grim for those less fortunate.
Price to pay for a tanked economy for 2 years of lockdowns. I never agreed with it as I could see this happening.
But here we are 🤷♂️
The whole planet is suffering supply problems currently, and high inflation.
However we have the *5th highest* inflation in the G20 at 10.7%. Even Russia is only at 12%
The only difference is that we have Brexit causing us even more supply problems that other countries don’t have to deal with
https://tradingeconomics.com/country-list/inflation-rate?continent=g20
Isn’t the point of raising interest rates to curb spending and encourage people to save instead? That’s fine if people are spending on luxury goods, but it doesn’t work when they’re spending on food and heating. You’re not going to say “Ooh, I was going to heat my house so I don’t freeze to death and eat meals for the next week, but I think I’ll stick that money in my HSBC account instead.”
Theres got to be a reason for the absolute destruction of our country and those with the power of the pen to sit back and just watch .. there must be more to this surely
I don’t get it, they were speculating on the rise on the news this morning, and they were saying that they’d raise interest rates to get people to be spending less.
Are they not paying attention? I can’t think of many people who at the moment are going “Yay! Let’s splurge!”. The increased spending is all on food and energy! The only people who aren’t trying to restrict their spending at the moment are likely well enough off that they don’t need to give a damn about what the interest rate is…
Deepening a recession because you’re afraid that workers in this country will be paid a fair wage:
> Bailey forecast skill shortages would push wages higher and prevent inflation falling towards the Bank’s 2% target as fast as he hoped.
> “There is a risk that [inflation won’t fall] in that way, particularly because the labour market and the labour supply in this country is so tight.
> “And that’s why, really, we had to raise interest rates today, because we see that risk as really quite pronounced.”
At a time when many people are unable to heat their homes.
These people are subhuman.
Honestly, I feel like if wages had grown at the rate everything else did (mainly house prices) we’d probably be better insulated from the damage of higher interest rates.
The risk of losing homes comes because we let the gap between house prices and salaries get too wide, and interest rates look like a hand grenade vs a very dodgy looking game of Jenga.
I wonder is the end goal of all this fuckery to ensure the masses get tied into longer mortages / debt and therefore have to work into their 80’s
It’s stunk since “convid” came along
Why were interest rates so damn low for the past 15 years?
Been saving years to finally get a deposit for a mortgage and with all these interest rate increases dont know why I even bothered. There no chance avg person can afford this.
Its a real perfect storm, I sympathize a lot with people who are hit by this but the BoE doesn’t really have much of a choice given the need to triangulate inflation, with higher competitive rates for foreign exchange with the strength of sterling. The Liz Truss disaster budget shows what happens when you try to go against international currency markets, the BoE has to make sterling somehow competitive given our debt and position as a net importer.
The people asking ‘why were interest rates low for so long’ are I think focusing on the wrong issue, it is the BoE’s responsibility to control monetary policy and keep inflation around 2%. For a long time its done its job and has done it reasonably well. Rates were low because those were the rates necessary to fulfill its remit.
The absence of basic credit controls and the shambolic nature of UK housing policy dates back to 50 years of central government failure all the way to the Barber Boom, right to buy and the abolition of credit controls following the failure of monetarism in the 80s. This has been allowed to build for the very simple reason that no one is willing to threaten house prices, landlords and housing developers.
The bubble had to pop sometime.
Turns out that the trick to defeating Putin is to raise interest rates huh? Because apparently that is going to get him to start letting grain ships though and oil/gas flowing again.
Amazing. /s