Inflation

[Unknown user]

5 minutes ago, doctor jambo said:

We need a controlled house price collapse.

people need to own their own homes without massive loans.

unfortunately the world turns on debt and what is best for the banks and “the markets”

if liz truss showed one thing it’s that leaders and governments can be removed by large financial institutions 

 

There's a whole bunch of stuff we need, but in the short term there's a fairly small group about to take a massive beating 

[XB52]

11 hours ago, periodictabledancer said:

Martin Lewis on TV now saying only 20% of the population will be affected by rising interest rates. Roughly 1/3 of population on mortgages, the majority are on fixed rates and not affected by current rate hikes.  A tiny % of the popluation is bearing the brunt for bringing inflation down. 

???? When is 20% a tiny percentage?  Earlier you said 11 million people had mortgages, at a guess about 8 million have fixed rates. So 3 million impacted immediately and another 1 to 2 million impacted each year as their deals expire

Edited to say, But Ferries🙂🙂

Edited June 23, 2023 by XB52
More info

[doctor jambo]

56 minutes ago, XB52 said:

???? When is 20% a tiny percentage?  Earlier you said 11 million people had mortgages, at a guess about 8 million have fixed rates. So 3 million impacted immediately and another 1 to 2 million impacted each year as their deals expire

Edited to say, But Ferries🙂🙂

20% is a huge number.

it also doesn’t include the likes of me who fixed 8 weeks ago but  still paying hundreds a month more.

EVERYONE is being screwed with inflation on food and energy.

Everyone on a good wage just got clobbered by snp tax hike in April.

kind of tired of being used as a cash point by governments of all colours

[Dazo]

29 minutes ago, doctor jambo said:

20% is a huge number.

it also doesn’t include the likes of me who fixed 8 weeks ago but  still paying hundreds a month more.

EVERYONE is being screwed with inflation on food and energy.

Everyone on a good wage just got clobbered by snp tax hike in April.

kind of tired of being used as a cash point by governments of all colours

Good point about those who fixed recently or in the last few months. Probably millions missing from that figure that are paying far more for the foreseeable. 

[doctor jambo]

13 minutes ago, Dazo said:

Good point about those who fixed recently or in the last few months. Probably millions missing from that figure that are paying far more for the foreseeable. 

Yep, I fixed for 2 years at 4.12% with my current lender.

I had been unaware you could contact your lender and as long as the term and amount remained the same you could just pick a new deal without any more checks. Took 60 seconds online.

I had been variable for 9 months prior to that and it took £250 per month off my mortgage, though that still leaves me £200 per month more than before my last deal expired .

So even on that deal I am £2000 down per year.

[Dazo]

11 minutes ago, doctor jambo said:

Yep, I fixed for 2 years at 4.12% with my current lender.

I had been unaware you could contact your lender and as long as the term and amount remained the same you could just pick a new deal without any more checks. Took 60 seconds online.

I had been variable for 9 months prior to that and it took £250 per month off my mortgage, though that still leaves me £200 per month more than before my last deal expired .

So even on that deal I am £2000 down per year.

Another good point for those that are unaware, a rate switch is a simple process that can be done online within minutes. No application or credit checks etc. it can be done with rate secured 180 days before your current deal is due to end. 

Edited June 23, 2023 by Dazo

[Jambof3tornado]

19 minutes ago, Dazo said:

Another good point for those that are unaware, a rate switch is a simple process that can be done online within minutes. No application or credit checks etc. it can be done with rate secured 180 days before your current deal is due to end. 

This 6 months before your current deal ends thing, the new rate you settle on,is either party tied to it? What I mean is if you agree to 5% but rates keep going up,will your offer still be on the table? Equally if(pie in the sky time),better rates become available during the 6 months can you take a better deal?

[hughesie27]

5 minutes ago, Jambof3tornado said:

This 6 months before your current deal ends thing, the new rate you settle on,is either party tied to it? What I mean is if you agree to 5% but rates keep going up,will your offer still be on the table? Equally if(pie in the sky time),better rates become available during the 6 months can you take a better deal?

An agreement in principle will secure it for a period but youc an leave it.

[Jambof3tornado]

8 minutes ago, hughesie27 said:

An agreement in principle will secure it for a period but youc an leave it.

Thanks mate. Not for me but for junior.

[Dazo]

20 minutes ago, Jambof3tornado said:

This 6 months before your current deal ends thing, the new rate you settle on,is either party tied to it? What I mean is if you agree to 5% but rates keep going up,will your offer still be on the table? Equally if(pie in the sky time),better rates become available during the 6 months can you take a better deal?

Nope you’re not tied to it in any way and it won’t kick in until your current deal ends. Better to secure something now then keep an eye on what becomes available. 

[Jambof3tornado]

25 minutes ago, Dazo said:

Nope you’re not tied to it in any way and it won’t kick in until your current deal ends. Better to secure something now then keep an eye on what becomes available. 

Thanks, Juniors fix ends march 2024 so he can go to his broker end of sept and see whats about. I'm hoping that inflation will peak sooner rather than later!

[Jambof3tornado]

Quite glad the government hasn't jumped in to help over mortgages. Whats been agreed seems to be things already in place other than if you speak to your lender your credit rating won't take a hit....I'm sorry but it will still show if your behind on payments whether agreed or not!!

[WorldChampions1902]

1 hour ago, Jambof3tornado said:

Quite glad the government hasn't jumped in to help over mortgages. Whats been agreed seems to be things already in place other than if you speak to your lender your credit rating won't take a hit....I'm sorry but it will still show if your behind on payments whether agreed or not!!

So the BoE is using interest rate hikes, in order to lower inflation.

 

And mortgage payers can now continue to maintain their current repayments, but because interest rates have been hiked, mortgage companies will just extend the term of people’s loans.

 

Consequently, not a single penny has been sucked out of the economy, by these interest rate hikes, thus neutralising their supposed intentions.

 

So the BoE will hike interest rates further next month.

 

And mortgage companies will just extend loan terms even further.

 

Can somebody please explain this insanity to a simpleton such as myself?

 

PS I have no skin in the game, as I paid off my mortgage 15 years ago.

 

Thanks in advance.

 

 

 

 

[Jambof3tornado]

2 hours ago, WorldChampions1902 said:

So the BoE is using interest rate hikes, in order to lower inflation.

 

And mortgage payers can now continue to maintain their current repayments, but because interest rates have been hiked, mortgage companies will just extend the term of people’s loans.

 

Consequently, not a single penny has been sucked out of the economy, by these interest rate hikes, thus neutralising their supposed intentions.

 

So the BoE will hike interest rates further next month.

 

And mortgage companies will just extend loan terms even further.

 

Can somebody please explain this insanity to a simpleton such as myself?

 

PS I have no skin in the game, as I paid off my mortgage 15 years ago.

 

Thanks in advance.

 

 

 

 

Strangely enough the banks will win by the extra interest payments for a longer period. The base rate goes up to scare people into spending less? Honestly I'm not convinced any of it makes sense!

 

 

[MoncurMacdonaldMercer]

1 hour ago, Jambof3tornado said:

The base rate goes up to scare people into spending less?

 

 

this is a big part of it - many who aren’t  actually worse off at the moment are worried about what the future holds and become more careful with their money (even if it’s actually unaffected at the moment) - similar to what the lady from the financial institution said (can’t remember which) in the clip  on this thread - people ‘happy’ to still have a job in difficult times less likely to demand wage rises

 

as well as stuff that actually affects stuff right now whatever that may be

 

thats part of the economic principles - how well they work and whether people think they are the best / fairest solution is a different debate

 

 

 

 

 

 

 

 

 

[doctor jambo]

13 hours ago, WorldChampions1902 said:

So the BoE is using interest rate hikes, in order to lower inflation.

 

And mortgage payers can now continue to maintain their current repayments, but because interest rates have been hiked, mortgage companies will just extend the term of people’s loans.

 

Consequently, not a single penny has been sucked out of the economy, by these interest rate hikes, thus neutralising their supposed intentions.

 

So the BoE will hike interest rates further next month.

 

And mortgage companies will just extend loan terms even further.

 

Can somebody please explain this insanity to a simpleton such as myself?

 

PS I have no skin in the game, as I paid off my mortgage 15 years ago.

 

Thanks in advance.

 

 

 

 

The banks win.

They get more money off you for the same loan .

Thats the nub of it.

Thats all anyone really cares about these days- the banking system and it’s continued lisence to rob people blind

[heartsfc_fan]

Anyone know how staff mortgages work if you are employed by a bank? The wife knows a couple who bought a house last summer, with staff mortgage but are now "struggling". I always assumed banks would offer staff a fixed cheap base rate deal or does it change if the base rate goes up?

No idea how it works really as I read there are tax implications aswell as it's a benefit?

 

Someone enlighten me.

[hughesie27]

7 minutes ago, heartsfc_fan said:

Anyone know how staff mortgages work if you are employed by a bank? The wife knows a couple who bought a house last summer, with staff mortgage but are now "struggling". I always assumed banks would offer staff a fixed cheap base rate deal or does it change if the base rate goes up?

No idea how it works really as I read there are tax implications aswell as it's a benefit?

 

Someone enlighten me.

Would assume they do get a deal but will still be at the mercy of 2/5 year deals.

[kila]

28 minutes ago, heartsfc_fan said:

Anyone know how staff mortgages work if you are employed by a bank? The wife knows a couple who bought a house last summer, with staff mortgage but are now "struggling". I always assumed banks would offer staff a fixed cheap base rate deal or does it change if the base rate goes up?

No idea how it works really as I read there are tax implications aswell as it's a benefit?

 

Someone enlighten me.

They maybe took a discounted tracker mortgage on the gamble inflation would peak soon and rates wouldn’t keep going up?

[That thing you do]

 

Sadly hes nailed it. As said before interest rates will need to go higher towards inflation rate which will cause more pain.

[Diadora Van Basten]

3 hours ago, That thing you do said:

 

Sadly hes nailed it. As said before interest rates will need to go higher towards inflation rate which will cause more pain.

I think that higher interest rates would be a mistake and they are already to high.

 

This actually reminds me of when Britain left the Exchange Rate Mechanism the data was not what they hoped for and they just kept raising interest rates completely knackering people with mortgages.

 

Eventually they decided to leave the Exchange Rate mechanism and reduce interest rates.

 

I think the interest rate hike up to 3% would be enough to bring down inflation but there is a lag between rates going up and the economy being affected by them. I have given the example of my favourite bottle of wine that went up 10% in September 22 and this will not fall out of the inflation figures until October 23 and there is little evidence to suggest it will go up again anytime soon.

 

I don’t think the BOE do know what they are doing especially when they were buying government bonds to stop pension schemes going bust that I would assume to be inflationary while they were putting up interest rates to fight inflation.

 

Similarly the intervention by the Chancellor yesterday made no sense either but I think he just wanted to be seen to do something. 
 

As Richard Murphy said the best thing he could have done was overrule the Bank of England and cancel the 0.5% hike.

[TheOak88]

On 23/06/2023 at 10:50, doctor jambo said:

The ladder is chuckling because those at the top are too godddam fat, and those under them are finding their knees buckling under the pressure of trying to keep them up there.

proper inheritance tax needs brought in. 
take a house value- what it was bought for, account for inflation, add that on, then everything above that tax it really heavily as it is unearned .

Unearned wealth is untapped , and would seem a fairer target than money you have to go out to work for

Where does that logic end though. A lot of wealth is unearned, not just the growth in property value. 

[periodictabledancer]

Some radical thinking that's totally unnaecptable to the Tories.

 

https://www.ft.com/content/4cf73b89-51eb-4144-a0e4-b6f08ecaee5c

Calling the UK an emerging market became an intermittent investor epithet during its recent economic and political turmoil. The serious point of such a characterisation is that the macroeconomic regime has shifted. Britain never adjusted sufficiently to the flatlining of productivity growth since 2008. Brexit then intensified issues and the UK faces real miseries. Though credit flows have not come to a sudden stop, and are unlikely to do so, policymakers should now act as though they are under a self-imposed IMF stabilisation programme. Unlike the largest economies, there is now less room for policy error, and fewer good choices, when negative shocks hit. Hence the need to put a solid floor under the situation, forestalling further descent. A co-ordinated programme would not require sharp fiscal austerity, and certainly should not include irresponsible tax cuts, mortgage bailouts or industrial policy white elephants. It does require a multiyear plan, the redistribution of economic burdens and a decrease in inflation. Some false debates should be put aside. Brexit did not cause all of the UK’s economic problems, but it made almost all of them worse. Real shocks, some global, were much of the initial source of inflation, but this has turned into trend inflation. Net macroeconomic tightening is necessary, and higher interest rates are not inflationary. For household incomes to catch up, money has to be taken from somewhere else. Accepting those realities, a UK stabilisation programme should have six components. First, a major reallocation of fiscal priorities. A significant wage increase — but less than the full amount of inflation — should be given to the NHS, education, first responders, and some transport workers over the next two years, along with much lower increases thereafter. This should be paid for by taxes on high-income workers and capital gains, as well as on property. Similarly, public investment in the energy grid, mass transit, and critical infrastructure should be increased, while cutting other subsidies and programmes. This is not permission for the UK to join the self-defeating subsidies race between the US, EU, and China. Yes, all this will be dismissed as completely politically impossible. A country with five governments in seven years, let alone one facing a general election, is unlikely to sustain such commitments. Yet, that is exactly what small unstable economies face when they get into IMF programmes. Such commitments are what restores credibility. The UK has the luxury of doing this on its own terms, when things are merely miserable but not an outright crisis. Second, calls for aid for mortgage holders need to be largely ignored. There are few unfairnesses greater than the fact that property owners get all the benefits of real estate price booms and low interest rates, but demand bailouts, often successfully, when rates rise and prices fall. In a stabilisation, hard choices have to be made. Let property prices fall, which is disinflationary, and force any restructuring of mortgages to come out of the private sector lenders, not the public budget. Third, pursue the long talked about planning reforms to spark a boom in construction. Making housing more affordable and widely available while promoting domestic employment should be a no-brainer. Crucially, this has to be about deregulation and promoting increased supply, not about making it easier to buy. Fourth, actually carry through the obvious labour supply reforms to address the clear mismatch between available workers and jobs, and the decline in labour force participation. As UK economists have pointed out, the meanness of benefits mean there is a terrible disincentive to be unemployed versus in employment or on disability benefits; there is also insufficient investment in the health and retraining of workers. Fifth, lean in to being a global Britain post-Brexit. Think like a small country and specialise, rather than unsuccessfully following larger ones. So, do even more of the pro-immigration policy which has been the one major source of growth of late, and double-down on attracting foreign students. Do not subsidise manufacturing, but attract R&D and use of business services. Do join CPTPP (as the UK is doing) and other pacts, and put pressure on the US, EU, and China to open up more broadly, instead of trying to cut bilateral deals at a bargaining disadvantage. Finally, monetary policy has to tighten quite a bit more. It never made any sense for the Bank of England to keep saying they were about to reach their terminal rate, while the Federal Reserve and the European Central Bank both said they had to keep raising, when the UK had both the US’s labour market problems (or worse), the eurozone’s gas price spikes (or worse), and is smaller than either. The inflation forecast since late 2021 should have been higher and longer. Even the latest rate rise by the BoE was couched in terms of more may or may not be needed. More is needed and the bank should say so clearly. This plan may seem politically far-fetched. There is a reason why economies often need an external force to impose a programme before anything gets done. For all its economic miseries, the UK is not on an exchange rate peg, is not facing capital flight, and interest rates on long-term gilts could rise a lot more without inducing a crisis. Yet its economy is distinctly similar to an emerging market under pressure, which means stabilisation is the credible path forward. The present muddling through, leaving the path to disinflation uncertain, will just make things worse.

[the posh bit]

10 hours ago, heartsfc_fan said:

Anyone know how staff mortgages work if you are employed by a bank? The wife knows a couple who bought a house last summer, with staff mortgage but are now "struggling". I always assumed banks would offer staff a fixed cheap base rate deal or does it change if the base rate goes up?

No idea how it works really as I read there are tax implications aswell as it's a benefit?

 

Someone enlighten me.

 

Doesn't happen anymore. Used to be a massive perk, not now. 

Edited June 24, 2023 by the posh bit

[heartsfc_fan]

Just now, the posh bit said:

 

Doesn't happen anymore. Used to be a massive perk, not now. 

Ta. Thought it was but given the current climate it's understandable.

[the posh bit]

4 minutes ago, heartsfc_fan said:

Ta. Thought it was but given the current climate it's understandable.

 

RBS anyway.

[periodictabledancer]

9 minutes ago, heartsfc_fan said:

Ta. Thought it was but given the current climate it's understandable.

They pretty much died out because in recent years lending rates have been very low.

Back in the 70s/80s they were very common and worth a lot when you consider lending rates of 14% but bank employees could borrow at 5%. 

[periodictabledancer]

9 minutes ago, heartsfc_fan said:

Ta. Thought it was but given the current climate it's understandable.

They pretty much died out because in recent years lending rates have been very low.

Back in the 70s/80s they were very common and worth a lot when you consider lending rates of 14% but bank employees could borrow at 5%. 

[periodictabledancer]

9 minutes ago, heartsfc_fan said:

Ta. Thought it was but given the current climate it's understandable.

They pretty much died out because in recent years lending rates have been very low.

Back in the 70s/80s they were very common and worth a lot when you consider lending rates of 14% but bank employees could borrow at 5%. 

[the posh bit]

9 minutes ago, periodictabledancer said:

They pretty much died out because in recent years lending rates have been very low.

Back in the 70s/80s they were very common and worth a lot when you consider lending rates of 14% but bank employees could borrow at 5%. 

 

Maybe reintroduced soon then? 

[periodictabledancer]

Just now, the posh bit said:

 

Maybe reintroduced soon then? 

Good point.

[Dazo]

12 hours ago, the posh bit said:

 

Doesn't happen anymore. Used to be a massive perk, not now. 

Yes they do. Depends on the bank of course but they are still a thing. Varies on the bank whether it is actually worth it but some banks offer 0% on the employees share of the mortgage. 

[The Real Maroonblood]

The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.

What a muppet. 

[the posh bit]

22 minutes ago, Dazo said:

Yes they do. Depends on the bank of course but they are still a thing. Varies on the bank whether it is actually worth it but some banks offer 0% on the employees share of the mortgage. 

 

RBS don't. 

[Jambof3tornado]

1 hour ago, The Real Maroonblood said:

The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.

What a muppet. 

Haha when rates hit rock bottom they were going to stay low for a very short time we were told!! 12 fekkin years!!!

 

They havent a clue.

[The Real Maroonblood]

3 minutes ago, Jambof3tornado said:

Haha when rates hit rock bottom they were going to stay low for a very short time we were told!! 12 fekkin years!!!

 

They havent a clue.

They don’t live in the real world.

Fortunately I’m mortgage free.

I really feel for people having to cope with this.

[skinnybob72]

The idea that people can extend their mortgages is a nonsense. 

 

Extend your term so that the banks make even more money from you, but not actually increasing your monthly payment in order that the energy companies and supermarkets can continue fleecing you as well. Can't have the bank making ALL of the money! 

[WorldChampions1902]

2 hours ago, The Real Maroonblood said:

The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.

What a muppet. 

What Bawsack is actually saying, is that make sure you don’t ask for inflation-matching pay awards, so that the purchasing power of your wages falls even further behind. You need to “hold your nerve” and ensure your pay award this year (and probably next year), is way below the prevailing rate of inflation. Whilst of course, paying more and more for your mortgage, as interest rates spiral. Simples!

[mrmarkus1981_1]

If I wanted my mortgage payments and term to remain the same I would need to pay £70000, yes £70k. No reducing the term, just handing the bank the money for heehaw 😂

[The Real Maroonblood]

5 minutes ago, WorldChampions1902 said:

What Bawsack is actually saying, is that make sure you don’t ask for inflation-matching pay awards, so that the purchasing power of your wages falls even further behind. You need to “hold your nerve” and ensure your pay award this year (and probably next year), is way below the prevailing rate of inflation. Whilst of course, paying more and more for your mortgage, as interest rates spiral. Simples!

That's a good point. 

Dismal times constantly. 

[Lone Striker]

3 hours ago, The Real Maroonblood said:

The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.

What a muppet. 

 

15 minutes ago, WorldChampions1902 said:

What Bawsack is actually saying, is that make sure you don’t ask for inflation-matching pay awards, so that the purchasing power of your wages falls even further behind. You need to “hold your nerve” and ensure your pay award this year (and probably next year), is way below the prevailing rate of inflation. Whilst of course, paying more and more for your mortgage, as interest rates spiral. Simples!

 

Yep, quite an insulting thing for any PM to say.     Unless he means "Hold your nerve guys, and keep searching for a billionaire's nice daughter to marry"

 

 

 

[the posh bit]

2 hours ago, The Real Maroonblood said:

They don’t live in the real world.

Fortunately I’m mortgage free.

I really feel for people having to cope with this.

 

Being mortgage free with savings is happy days just now but it's a chronic situation for young people. I really feel for them too. 

[doctor jambo]

2 minutes ago, the posh bit said:

 

Being mortgage free with savings is happy days just now but it's a chronic situation for young people. I really feel for them too. 

Savers it’s not happy days - inflation is so high your savings are being eroded rapidly too!

[the posh bit]

5 minutes ago, doctor jambo said:

Savers it’s not happy days - inflation is so high your savings are being eroded rapidly too!

 

Ken. 

[Diadora Van Basten]

It will be interesting to compare UK and Japanese inflation. Both have been growing recently but whilst the UK have raised interest rates to 5% Japan have held their interest rate at -0.1%.

 

My gut feeling is inflation in both UK and Japan will fall at the same time.

[Jambof3tornado]

4 hours ago, doctor jambo said:

Savers it’s not happy days - inflation is so high your savings are being eroded rapidly too!

As a saver,I'm happier than I was.

 

My mortgage is fixed for the remainder at 2.19%.

 

I know what you are saying about them being eroded though.

[Dazo]

19 hours ago, the posh bit said:

 

RBS don't. 

I know the didn’t say all banks do it. I was just corrected the point that it doesn’t happen any more. As said that it isn’t always financially worth it.

[Jambof3tornado]

So to help the mortgage misery Hunt is going to tell the banks to push up savings rates?!?

 

Well that'll help..........rich folk!

[manaliveits105]

Food inflation rate lower than last months - still rising but at a slower rate 

Government questioning 4 major Grocery retailers today 

Green shoots and all that 

onwards and upwards 

[BlueRiver]

1 hour ago, Jambof3tornado said:

So to help the mortgage misery Hunt is going to tell the banks to push up savings rates?!?

 

Well that'll help..........rich folk!

 

Helps me and I'm not rich to be fair.