Bank of England raises base rate from .75 to 1%.( bbc)
No huge surprise, but how high will they go?

The EU were hinting at twice this year for those outside of the UK .

Apologies for being thick here but won't this make the cost of living even higher for anyone on tracker mortgages (like me)? Ours has gone up three times in the last few months. Need to remortgage, sharpish.

Yes, this will make the cost of living higher for everybody.

It's a combination of factors but the war in Ukraine is only one of those.

The chief factor is the entire western world + China effectively shutting down most of the world economy for ~18 months, coupled with hundreds of millions of people in the west being "paid" to sit on their bottoms during the restriction periods.

Who do you think paid for it all? Where do you think the money appeared from?

We're only just starting to pay the price of the lockdown restrictions.

Bank of England forecast really bad - 10% inflation and a real risk of recession

I reckon that is going to require a lot of "Three Lions getting cancelled" stories to try to bury that

It’s unlikely to keep going up for now. Economic indicators are suggesting a slowdown in the UK and a potential recession. The Bank of England have said they are monitoring this closely and won’t keep raising rates if that’s the case.

Thought this was a thread about ticket sales for Villa and Newcastle .

Meanwhile, the profits the energy and oil companies are making have tripled.

Time for another rise in national insurance.

RVclaret wrote: ↑

Thu May 05, 2022 12:36 pm

It’s unlikely to keep going up for now. Economic indicators are suggesting a slowdown in the UK and a potential recession. The Bank of England have said they are monitoring this closely and won’t keep raising rates if that’s the case.

I think we're in for a period of sustained inflation and high interest rates.

You don't get to print money / debase your currency without it eventually come back to bite you.

This economic reality saying hello to us.

Rowls wrote: ↑

Thu May 05, 2022 12:35 pm

Yes, this will make the cost of living higher for everybody.

It's a combination of factors but the war in Ukraine is only one of those.

The chief factor is the entire western world + China effectively shutting down most of the world economy for ~18 months, coupled with hundreds of millions of people in the west being "paid" to sit on their bottoms during the restriction periods.

Who do you think paid for it all? Where do you think the money appeared from?

We're only just starting to pay the price of the lockdown restrictions.

Several factors are at play obviously, but why does the IMF think we'll have the worst inflation shock in the G7? What exactly is it about the UK that makes us uniquely ill suited to deal with these global shocks?

https://www.bloombergquint.com/global-e ... -imf-warns

JohnMcGreal wrote: ↑

Thu May 05, 2022 12:58 pm

Several factors are at play obviously, but why does the IMF think we'll have the worst inflation shock in the G7? What exactly is it about the UK that makes us uniquely ill suited to deal with these global shocks?

https://www.bloombergquint.com/global-e ... -imf-warns

Maybe it's because we had the widest and "most generous" furlough scheme?

Yeah, it was fun and games being "paid" to sit on our bottoms and not work but who paid for this? Where did the money come from?

Who knows, eh? Economic predictions are only as good as the organisations or people making them.

Predictions are wispy schimera. Economic reality is what we're dealing with, not predicitions.

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

If you work or worked for the government and have a final salary pension, or a government wage, you are inflation-proofed by virtue of your job. It's mainly the private sector workers who will suffer.

A few people quoting me and replying but nobody yet answering the questions.

It's open to everybody. If you think you know the answer, let us know.

Who paid for all those furlough schemes and covid loans? Where did the money appear from?

Rowls wrote: ↑

Thu May 05, 2022 12:35 pm

Yes, this will make the cost of living higher for everybody.

It's a combination of factors but the war in Ukraine is only one of those.

The chief factor is the entire western world + China effectively shutting down most of the world economy for ~18 months, coupled with hundreds of millions of people in the west being "paid" to sit on their bottoms during the restriction periods.

Who do you think paid for it all? Where do you think the money appeared from?

We're only just starting to pay the price of the lockdown restrictions.

There was me thinking that many connected to tge sleazy Gov have done very well and took lots of our money!

I see Baroness Mone made multi millions for a couple of phone calls. PPE that turned out to be not fit for purpose. She is just one of the trough guzzlers who fleeced us.

Early days, but Brexit, Covid and this war......
Imo we have done well to get to this point with IR only1%. As I've mentioned before, it was 15% when I bought my house. The last 10 to 15years have been one of the most stable in history. The Thatcher boom and bust years were terrible. Trying to budget when you didn't know if we were coming or going was hard.
One of the best things Gordon Brown did, was letting the BoE set interest rates, rather than the Chancellor of the Exchequer.

Rowls wrote: ↑

Thu May 05, 2022 1:05 pm

Maybe it's because we had the widest and "most generous" furlough scheme?

Yeah, it was fun and games being "paid" to sit on our bottoms and not work but who paid for this? Where did the money come from?

Who knows, eh? Economic predictions are only as good as the organisations or people making them.

Predictions are wispy schimera. Economic reality is what we're dealing with, not predicitions.

Fair enough. Forget the predictions and look at the economic reality.

What happens to a country's economy when it decides to erect trade and regulatory barriers between itself and its closest and largest market? Does that have a positive or negative effect on GDP? Basic stuff. Should be easy to answer.

How much tax does the treasury miss out on when you deliberately hobble your exporting businesses?

Does deliberately reducing the amount of labour have an inflationary or deflationary effect on your economy?

Why does the OBR think that the pandemic will only be about 50% as damaging as the actions taken above?

Oh, economic reality is suddenly important again?

Good to know

2 Simple questions asked

0 Answers received so far

Rowls wrote: ↑

Thu May 05, 2022 1:05 pm

Maybe it's because we had the widest and "most generous" furlough scheme?

Which tory party leaflet did you get that ******** from?
My grand daughter, here in Ireland, got €350/week for the duration whilst she only had a weekend job. Whereas my daughter, in the UK, was made redundant the week before furloughing kicked in and got next to sweet FA for the 8 months until she found work.

The real reason, and what the government and media don't mention, is the extra money printed during covid. Approximately 10'000 per adult in the UK. But of course its in the hands of the rich, and the price of everything goes up for all of us. We have a chancellor that is married to a billionaires daughter. Don't ever believe those who run the country have our interests at heart.

A few years ago I was getting 6% on savings, for quite a few years now it's been near 0%....i doubt it will go back to 6%...or the 14% it was in the 80s.... Not everybody benefits from low interest rates.

Rowls wrote: ↑

Thu May 05, 2022 1:05 pm

Economic reality is what we're dealing with, not predicitions.

Indeed it is.

And the economic reality right now is that we're going through the biggest shift in wealth towards the already rich in our history.

JohnMcGreal wrote: ↑

Thu May 05, 2022 12:58 pm

Several factors are at play obviously, but why does the IMF think we'll have the worst inflation shock in the G7? What exactly is it about the UK that makes us uniquely ill suited to deal with these global shocks?

https://www.bloombergquint.com/global-e ... -imf-warns

You ask "Why does the IMF think we'll have the worst inflation shock in the G7." Well the obvious answer is that we have the same inflation problems as the rest of the world, but on top of that we had Brexit. That means that all goods coming from the EU are charged VAT, which in turn puts the prices up in the shops on top of underlying inflation. This is a massive amount of VAT being accrued by the government and instead of using it to help fight the cost of living crisis, they are squirrelling it away in their coffers to use just before the next election, to bribe the electorate with an 1p income tax cut.

Gordaleman wrote: ↑

Thu May 05, 2022 2:03 pm

You ask "Why does the IMF think we'll have the worst inflation shock in the G7." Well the obvious answer is that we have the same inflation problems as the rest of the world, but on top of that we had Brexit. That means that all goods coming from the EU are charged VAT, which in turn puts the prices up in the shops on top of underlying inflation. This is a massive amount of VAT being accrued by the government and instead of using it to help fight the cost of living crisis, they are squirrelling it away in their coffers to use just before the next election, to bribe the electorate with an 1p income tax cut.

Customs duties rather than VAT but the point stands.

The bigger cause of rising prices on imports though is the import process itself. What was frictionless and simple is now hugely convoluted and time consuming.

It's not a cost of living crisis it's an inequality crisis. Check the rich list and see how much money the elites earned during covid.

claret2018 wrote: ↑

Thu May 05, 2022 2:18 pm

Customs duties rather than VAT but the point stands.

The bigger cause of rising prices on imports though is the import process itself. What was frictionless and simple is now hugely convoluted and time consuming.

Precisely. So much for the Brexit dividend. Boris saw a chance for personal glory and jumped in with both feet, knowing he wouldn't suffer like everyone else when it all went ti*s up.

Rowls wrote: ↑

Thu May 05, 2022 1:05 pm

Maybe it's because we had the widest and "most generous" furlough scheme?

Yeah, it was fun and games being "paid" to sit on our bottoms and not work but who paid for this? Where did the money come from?

Who knows, eh? Economic predictions are only as good as the organisations or people making them.

Predictions are wispy schimera. Economic reality is what we're dealing with, not predicitions.

You just need to claim its world beating to really get the message out there.

claret2018 wrote: ↑

Thu May 05, 2022 2:18 pm

Customs duties rather than VAT but the point stands.

The bigger cause of rising prices on imports though is the import process itself. What was frictionless and simple is now hugely convoluted and time consuming.

Those much promised uplands are getting sunnier and sunnier.

claret2018 wrote: ↑

Thu May 05, 2022 2:18 pm

Customs duties rather than VAT but the point stands.

The bigger cause of rising prices on imports though is the import process itself. What was frictionless and simple is now hugely convoluted and time consuming.

If imports from the EU are as awkward as all that, then perhaps they should look at importing from say the USA which is presumably a much simpler process? One company in particular that I used to know, in the EU days imported and exported from/to the EU and to the rest of the world, and there was little difference in paperwork and difficulty.

Tricky Trevor wrote: ↑

Thu May 05, 2022 1:50 pm

Which tory party leaflet did you get that ******** from?
My grand daughter, here in Ireland, got €350/week for the duration whilst she only had a weekend job. Whereas my daughter, in the UK, was made redundant the week before furloughing kicked in and got next to sweet FA for the 8 months until she found work.

I don't get my criticisms of government policies from party leaflets. They're much likelier to say the furlough scheme was a great success. And voters who benefited from it (short term, obvs) are actually likely to agree with them.

fatboy47 wrote: ↑

Thu May 05, 2022 1:59 pm

Indeed it is.

And the economic reality right now is that we're going through the biggest shift in wealth towards the already rich in our history.

We're all getting richer. The poor are getting much richer. They're no longer even "poor" by old standards.

For many, like yourself for example, it's all relative.

aggi wrote: ↑

Thu May 05, 2022 2:40 pm

You just need to claim its world beating to really get the message out there.

It certainly was very "generous" in what it paid out. There's no doubting that.

Rowls wrote: ↑

Thu May 05, 2022 1:41 pm

2 Simple questions asked

0 Answers received so far

Still 0 answers received so far.

Reminder what the questions are:

Who paid for the 'furlough' scheme and the covid loans?

Where did the money that paid for all this suddenly appear from?

Rowls wrote: ↑

Thu May 05, 2022 3:05 pm

Still 0 answers received so far.

Reminder what the questions are:

Who paid for the 'furlough' scheme and the covid loans?

Where did the money that paid for all this suddenly appear from?

Government debt.

RVclaret wrote: ↑

Thu May 05, 2022 3:16 pm

Government debt.

Correct. Some was borrowed. But only some of it.

ElectroClaret wrote: ↑

Thu May 05, 2022 12:16 pm

Bank of England raises base rate from .75 to 1%.( bbc)
No huge surprise, but how high will they go?

As high as possible - to reward savers

RVclaret wrote: ↑

Thu May 05, 2022 3:16 pm

Government debt.

Which has to be paid back

Course, we should really make those that can afford to pay, pay

But I guess it would just be easier to close some more public services and blame those poor b**tards trying to cross the channel

Double edged sword for some of us older pe people with savings, however with inflation the bit more interest you get is hammered by inflation and it upsets seeing your kids have to pay more for their mortgages.

This will end up being treated like a war debt which we will be paying for the rest of my life and my daughters life (she’s nearly 2). I wouldn’t be surprised if they introduced a covid tax. The furlough money didn’t grow on trees, and needs to be paid back.

Lancasterclaret wrote: ↑

Thu May 05, 2022 3:20 pm

Which has to be paid back

Course, we should really make those that can afford to pay, pay

But I guess it would just be easier to close some more public services and blame those poor b**tards trying to cross the channel

If I understand things roughly the Government borrows for typically something like ten years with interest rates fixed using rates at the time of the loan (which of course have been low) then has to pay it back at the end of those ten years. To do this they get new loans for perhaps a further ten years, but these will be with paying interest at the rates in ten years time, which may will be higher, perhaps even considerably higher. There is a constant cycle of this going on.

In other words it's loading debt onto future tax payers.

This increase will also effect the Burnley loan - LIBOR + 8% I read.

Hipper wrote: ↑

Thu May 05, 2022 3:43 pm

If I understand things roughly the Government borrows for typically something like ten years with interest rates fixed using rates at the time of the loan (which of course have been low) then has to pay it back at the end of those ten years. To do this they get new loans for perhaps a further ten years, but these will be with paying interest at the rates in ten years time, which may will be higher, perhaps even considerably higher. There is a constant cycle of this going on.

In other words it's loading debt onto future tax payers.

Yep

Course, just what the young need right now is the knowledge that when they are older they will have to pay even more

Some action right now on those that can afford to pay would be both justified and probably necessary

IMHO of course!

Hipper wrote: ↑

Thu May 05, 2022 3:43 pm

If I understand things roughly the Government borrows for typically something like ten years with interest rates fixed using rates at the time of the loan (which of course have been low) then has to pay it back at the end of those ten years. To do this they get new loans for perhaps a further ten years, but these will be with paying interest at the rates in ten years time, which may will be higher, perhaps even considerably higher. There is a constant cycle of this going on.

In other words it's loading debt onto future tax payers.

Yep

Course, just what the young need right now is the knowledge that when they are older they will have to pay even more

Some action right now on those that can afford to pay would be both justified and probably necessary

IMHO of course!

Hipper wrote: ↑

Thu May 05, 2022 3:45 pm

This increase will also effect the Burnley loan - LIBOR + 8% I read.

True although with their financial backgrounds I’d expect they may have hedged the risk of interest rate increases using interest rate futures / swaps.

dsr wrote: ↑

Thu May 05, 2022 2:52 pm

If imports from the EU are as awkward as all that, then perhaps they should look at importing from say the USA which is presumably a much simpler process? One company in particular that I used to know, in the EU days imported and exported from/to the EU and to the rest of the world, and there was little difference in paperwork and difficulty.

It's admirable that you're still trying to push this despite a lot of recent evidence to the contrary.

aggi wrote: ↑

Thu May 05, 2022 5:48 pm

It's admirable that you're still trying to push this despite a lot of recent evidence to the contrary.

Alternative facts, aggi, he's just got alternative facts

Cant help but think Alan Pace and ALK are at fault for this

Rowls wrote: ↑

Thu May 05, 2022 3:19 pm

Correct. Some was borrowed. But only some of it.

The Government issues bonds. Investors buy them at a guaranteed rate of interest and a guaranteed future value. It’s not “printing money” but is a form of borrowing as the Government pays those interest amounts, and will at some point have to buy the bond back. All explained on here https://en.m.wikipedia.org/wiki/Gilt-edged_securities if you’re really interested. Which most people aren’t as it’s not a 60 second soundbite.

Rowls wrote: ↑

Thu May 05, 2022 3:19 pm

Correct. Some was borrowed. But only some of it.

They just printed more money.

claret wizard wrote: ↑

Thu May 05, 2022 6:58 pm

The Government issues bonds. Investors buy them at a guaranteed rate of interest and a guaranteed future value. It’s not “printing money” but is a form of borrowing as the Government pays those interest amounts, and will at some point have to buy the bond back. All explained on here https://en.m.wikipedia.org/wiki/Gilt-edged_securities if you’re really interested. Which most people aren’t as it’s not a 60 second soundbite.

Many tricks and many fancy names but it's printing money in all but name.