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Will The June 22 Budget Push Up Interest Rates?

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I was reading through the minutes of the last two MPC meetings again and they mention temporary factors causing higher inflation, one of these factors is the increase in VAT from 15% back to 17.5% in december. It talks about these factors fading as the year goes on. So they have not included in their forecasts any future increase in VAT? Or any other tax rises for that matter?I then read that the forecasts were based on labours march budget so no VAT increase in there. I think we all know that a VAT increasing in the emergency budget is pretty much a given so this surely will contribute to inflation staying well above target? What I'm saying is will they raise rates in July after the budget when they know the full picture and update the forecasts with the new tax rises?

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No. The VAT rise will be used to blame inflation rising for as long as possible, so rates will remain unchanged.

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Guest BetterOffOnBenefits

They will think of ANY excuse to keep IR's at near zero.

That's my opinion

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The banks have now seen that they cangive out 0% IRs effectively on our savings and we do nothing about it - can do nothing about it.

I was only wondering in the past hour whether the banks will ever give decent returns on savings ever again?

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The banks have now seen that they cangive out 0% IRs effectively on our savings and we do nothing about it - can do nothing about it.

I was only wondering in the past hour whether the banks will ever give decent returns on savings ever again?

Once a couple of them collapse due to removal of state aid and savers savings vanishing I dare say they will be looking to attract real ( made up ) Money back through the door.

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Really f*cks me off how they do this to savers. Would like to see what the banks would do if we all decided to withdraw and then see what cash they've got to play with.

Grr.

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Any interest rate rise would actually be a tax hike, since the government / banking system are so intertwined. The traditional fabian socialist model of step-by-step refactoring of society has reached a critical point such that control of taxation is effectively in the hands of the banking cartel. The banking cartel says "jump" and the puppet government says "how high?" - give me control of the money supply and I care not who makes the laws. The government will do anything to avoid interest rates being pushed up, even if it means destroying the economy and having a significant proportion of the population living at or below the bread line.

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The banks have now seen that they cangive out 0% IRs effectively on our savings and we do nothing about it - can do nothing about it.

I was only wondering in the past hour whether the banks will ever give decent returns on savings ever again?

If the savings "community" got organised and everyone boycotted one bank and moved all their saving out, the banks would be forced to raise interest rates. Having worked in banking (including a stint as savings manager for one high street bank) you wouldn't need everyone to move either - just the 20% of customers who hold 80% of the balances. Cash savings are quite concentrated amongst a relatively small number of people - I think if the retired people of the UK realised this they may be surprised at how much trouble they could cause - get enough of the right kind of people taking part and you could cause all kinds of problems.

Shall we do it?

.

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If the savings "community" got organised and everyone boycotted one bank and moved all their saving out, the banks would be forced to raise interest rates. Having worked in banking (including a stint as savings manager for one high street bank) you wouldn't need everyone to move either - just the 20% of customers who hold 80% of the balances. Cash savings are quite concentrated amongst a relatively small number of people - I think if the retired people of the UK realised this they may be surprised at how much trouble they could cause - get enough of the right kind of people taking part and you could cause all kinds of problems.

Shall we do it?

.

I think I am right in saying that getting people to change banks is very difficult.

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The banks have now seen that they cangive out 0% IRs effectively on our savings and we do nothing about it - can do nothing about it.

I was only wondering in the past hour whether the banks will ever give decent returns on savings ever again?

Real interest rates are now negative, not zero. (RPI ~5%, IR's 3% if you are lucky. Real rates: ~ MINUS 2%, and that's using their massaged figures.)

There is one thing you can do to "take the power back"; physical gold.

Robs them of their undeserved Tier1 capital and you have 10x the effect in the loans market thanks to the fractional reserve system.

Edited by chris c-t

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They will think of ANY excuse to keep IR's at near zero.

That's my opinion

I agree labour would.

The question is, is the bank of England truly independant? If yes then they should raise them soon for the reasons I stated above. If they are not really independant and are pressured by the government into complying with their agenda, like Gordon browns ZIRP, then maybe DC will be less inclined to keep them so low.

With regards to the housing market he has already began removing some of the props. CGT and HIPs. Maybe they are looking at the long term benefit of the country and have realised that a few years of pain now will allow for many more years of prosperity in the future. Young people will be able to buy with affordable mortgages, be much less debt laden and have plenty more disposable income.

Maybe i'm being optimstic bit his first few actions as PM don't seem like those of a government prepared to 'prop the market up at all costs'

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Upping VAT is a one-off effect. Why would the BoE need to raise interest rates because of that? It's not like it would cause an out of control inflationary spiral.

Monkeying around with VAT just distorts the CPI and RPI indices for a year - it doesn't then require any monetary policy changes.

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Upping VAT is a one-off effect. Why would the BoE need to raise interest rates because of that? It's not like it would cause an out of control inflationary spiral.

Monkeying around with VAT just distorts the CPI and RPI indices for a year - it doesn't then require any monetary policy changes.

What happened when VAT was cut to 15%?

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Upping VAT is a one-off effect. Why would the BoE need to raise interest rates because of that? It's not like it would cause an out of control inflationary spiral.

Monkeying around with VAT just distorts the CPI and RPI indices for a year - it doesn't then require any monetary policy changes.

That is what they are partially blaming the current 'spike' in inflation on. So an increase to say 20% would cause a further 'spike' according to the bank of England.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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