You understand who has all the money, don’t you ?
Last time I looked it definitely wasn’t me.
Nor was it 98% of the rest of the populace.
It’s the BoE job to keep inflation at the 2% target, its the govts job to set long term fiscal strategy through policy.
BoE Increase interest rates to reduce demand and lower inflation, but interest rate changes are generally short lived to deal with fluctuations.
The govt have royally thrown a hand grenade in by telling markets they are cutting taxes, borrowing to fund it and are throwing inflation over the fence for someone else to fix.
Govt unfortunately think that growth = increases in the housing market so they reduce stamp duty etc but its bizarre they don’t realise that higher interest rates stifle the market.
Fucking bizarre times at the moment
I think they are now raising rates because if they don’t all the investors will bail out of UK bonds etc and buy American . Unfortunately, because we’re now run by gibbering fuckwits our rates would have to be much higher for anyone to think we’re a good investment.
And KKs behaviour is nothing to do with Odey and crew shorting the pound , nope, nothing to see here
The $ is strong at the moment so they won’t be buying many.
The market has no idea what the govts plan is so has zero confidence in them and are dumping bonds. The UK needs to borrow (or create) £160 billion to fund the tax cuts and the market doesn’t believe the UK can cover that with capital flow.
Kwasi needs to reverse the tax cuts but that means he’ll be fired so Truss needs to fire him now and then reverse the cuts.
You do realise that Truss completely agrees with Kwarteng’s tax cuts? There’s no way she’s firing* him.
*My phone keyboard did fisting here, which brought a rather unpleasant image to mind
3 Likes
Yeah but she only has two options:
- Sack him and reverse the cuts
- Leave it to BoE and hope that interest rate increases stabilise things
If the £ hits parity with the $ within the next few weeks she’ll be threatened with no confidence letters. I think she’ll throw him under the bus to save herself.
then again she’s batshit crazy so who the fuck knows what she’ll do.
either way we’re fucked.
1 Like
Now you understand.
Truss’ strategy is predicated on the belief that inflation worldwide has peaked or is nearing its peak and will start to fall soon. It’s a hell of a gamble and if she is wrong we’re going to be in terrible trouble. As a result of large scale borrowing to fund her unnecessary tax cuts for the rich, our capability to borrow a further large sum to fund another round of energy subsidies for the public and business is going to be extremely limited.
I’d say thinking that exists is a bigger gamble.
(That said, I do quite like the conspiracy theory that she’s a double agent aiming to bring down the monarchy and install a liberal government)
1 Like
I think you credit the Oxford University Lib Dems with a little too much forward planning.
Meanwhile in “journalism about a bear going into the woods”
rates rise
repos rise
rich cunts buy houses in firesale
% people forced to rent goes up
rich cunts able to charge what they want (even more than now)
Sure it’s obvious, but it’s fucking disastrous. Anyone who has pushed the boat out for their mortgage - and let’s face it, everyone has done that at some time - is fucked.
Here is sunny St Albans there will be people who have recently bought on, say, £500k mortgages. These are people with two decent incomes, and they’ve just had a kid or two. Normal people. They’re earning £70k each, not bad, so they’re taking home about £7k a month between them.
Their mortgage payment will go from £3k to maybe £5k. Given that they have other bills of £2k, they now can’t eat.
When people earning £140k as a family can’t eat, the country is properly fucked.
When you need two incomes, no kids and a 30 year mortgage to buy a basic house, the housing market is rigged.
1 Like
Sadly just capitalism at its merciless work. The developers care about making money. They don’t care about homeless people, or young couples who have to choose between paying a mortgage or starting a family, or older people whose property is devalued by a new estate chucked up next door, or any of the social consequences of what they do. Worrying about those things would put this thing at risk
I don’t expect developers to give a shit. But the government are very much complicit. It’s the way planning permissions are granted, how they enable land banking, the way lending criteria are manipulated (notionally for affordability), the bank interest rates etc etc. Housing is still the biggest store of wealth, and a source of power, for the rich, and they’ve manipulated it very cleverly. Thatcher got everyone to take out mortgages so they couldn’t strike and to massively damage councils (effectively stealing a load of money from them). Now they’ve supported endless schemes to ratchet up the price and they can soon take back many of those houses at firesale prices, transferring another huge chunk of wealth.
This first one is not like the others. The nature of most house purchases is that they are made by couples. If the default condition of a couple of adults in 2022 is that they both have jobs, it will be an inevitability that a house will cost two incomes. Short of banning women from the workplace again, I’m not sure how you could correct that.
1 Like
2 incomes has become the norm because houses have doubled in price and wages have barely moved in the last 10-20 years.