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UK inflation jumped to 9% highest for 40 years
Horseradish replied to rollover's topic in House prices and the economy
In the 1970s they raised rates. In the 1940s they did... not. -
UK inflation jumped to 9% highest for 40 years
Horseradish replied to rollover's topic in House prices and the economy
Except famously millennials couldn't buy into the housing market and there is a huge gap in their ownership rates. Instead more boomers bought more BTLs and rented them to those who couldn't afford, while also using their superior capital to finance their kid's purchases (the lucky few who could), who will also be receiving said BTLs as inheritance. So, no, I think you're dead wrong. I think that we are at serious risk of neo-feudalism instead. -
UK inflation jumped to 9% highest for 40 years
Horseradish replied to rollover's topic in House prices and the economy
Back to the 40s. -
UK inflation jumped to 9% highest for 40 years
Horseradish replied to rollover's topic in House prices and the economy
Yeah, my thought, too. People forget how many things are indexed against RPI still. Lots of old historical student loans, etc. etc. -
Is it though? A lot of that inflation is basically deglobilisation. And Ukraine really is having an impact - not just with energy, but soon with food, too (both directly with wheat exports, but also indirectly with petrochemicals which are used in fertilizer). The issue is that it's complex! And given that there really are other valid sources of inflation right now it's easy for them to bury the fact that all that capital was injected into the economy. Quite infuriating! But I don't think that you can just write off the other sources; they're valid and not insignificant.
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Wasn't it because pre-New-Labour the Labour parry were pretty socialist and had a storied history of basically wrecking the economy? So by doing this they were trying to prove their chops that they weren't the old Labour party, that they would do sound economics policy, etc. etc. Trouble was that this meant they were basically Thatcher/Regan/Friedman/Monetarism 2.0.
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I can see where he's going with it - it's a relative solution rather than an absolute one. You rebalance things so that FTBs have a more level playing field, and that's probably especially important in the near future where banks are just going to pull the high LTV mortgages again (we're in for a recession, and it always happens). So I think he's kind of being preemptive in a way - seeing the train inexorably approaching and trying to make sure the aftermath isn't like it was last time around ('07). However, what we really want is a solution on an absolute basis - which means a House Price Crash. Sure, you can pump more money into FTBs by giving them better rates, so that they can compete in the market on a more even basis with other participants, but really what would be better is if the wage-to-house-price gap was much, much smaller (13x in London, WTF?!) so that FTBs could just save up a reasonable deposit from their actual wages that wouldn't scare the banks. Basically it seems like treating the symptoms but not the cause. Having said that, Mulheirn hasn't got the power to tell the Bank of England to raise interest rates, shove us into a gouging recession, nuke government revenues, kill off a giant portion of the FTSE (zombies propped up by debt abound), and smash anyone who has a high LTV mortgage. So, you know, I appreciate what he's doing. In a way.
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Don't be surprised if house prices drop 20%
Horseradish replied to fellow's topic in House prices and the economy
Yeah. Other explanation is that the Telegraph is a bit of a rag now and it's just clickbait. Hard to tell, heh. -
Are we set for another debt binge?
Horseradish replied to Borg1234's topic in House prices and the economy
I think that data is out of date. You can see here from this Bank of England report. More that 50% of people (ok, rounding up very slightly for pervious years) are on a 5+ year fix. -
Don't be surprised if house prices drop 20%
Horseradish replied to fellow's topic in House prices and the economy
They're all in the Telegraph though. It's mostly one paper. -
Are we set for another debt binge?
Horseradish replied to Borg1234's topic in House prices and the economy
Or if it's on a very long term fixed rate.