Jump to content
House Price Crash Forum
Realistbear

Lower I R Are Doing Nothing To Reduce £1.45 Trillion U K Debt

Recommended Posts

http://www.telegraph.co.uk/finance/economics/8197806/Low-interest-rates-failing-to-rescue-British-households-from-1.45-trillion-debts-says-Bank-of-England.html

Low interest rates failing to rescue British households from £1.45 trillion debts, says Bank of England
Low interest rates are not fixing Britain's household debt burden, a damning survey for the Bank of England has found.

So, the Muppets have received a report that their low IR policy has failed. The debt burden will just continue on its merry way and the BoE will continue with their "vigilance" or Hawk-like observation as Mr. Bean has recently said.

The markets love it and our BOnds are still AAA+ and there have been no consequences that we can see. So far.

Share this post


Link to post
Share on other sites

I dont believe they thought people would pay money back at 0.5% interest rates. whats the motivation? even Mervyn the letter writer cant be that dense.

higher interest rates motivate people to pay off the debt. not many people forget to pay off those 1,000,000% APR payday loans immediately.

they did it cos even 3% interest rates would leave about 1,000,000 BTL properties being repossessed, and the last UK banking "crisis" looking like boomtimes in avalon.

Share this post


Link to post
Share on other sites

Can you imagine the amount of interest being paid on 1.45 TR of debt? Some of it at store credit rates at 24%. :o

As we are the most indebted nation in the EU for private debt it makes you wonder how they keep the plates spinning.

Share this post


Link to post
Share on other sites

I dont believe they thought people would pay money back at 0.5% interest rates. whats the motivation? even Mervyn the letter writer cant be that dense.

higher interest rates motivate people to pay off the debt. not many people forget to pay off those 1,000,000% APR payday loans immediately.

they did it cos even 3% interest rates would leave about 1,000,000 BTL properties being repossessed, and the last UK banking "crisis" looking like boomtimes in avalon.

+ 1

But I think the BoE knows that. And I think they also know that they have to land this sh!t as gently as possible. It will be a crash landing, as controlled as possible, but landing it will, one way or the other. Timing will be everything here, they can't land too fast, or it would break the banks. And they can't delay it for too long, or bond buyers will lose confidence, IR would rocket, and it would break the banks. I think. A very very tricky balancing act.

Share this post


Link to post
Share on other sites

+ 1

But I think the BoE knows that. And I think they also know that they have to land this sh!t as gently as possible. It will be a crash landing, as controlled as possible, but landing it will, one way or the other. Timing will be everything here, they can't land too fast, or it would break the banks. And they can't delay it for too long, or bond buyers will lose confidence, IR would rocket, and it would break the banks. I think. A very very tricky balancing act.

Nicely put.

My fear is a Goldilocks move that will keep us bullett proof and avoiding any meltdowns. That is, relative to others. Our debt is excruciating and it amazes me that the IMF think we have a credible plan to pay it off when the interest alone is outpacing the Koalishon's ability to tax and cut enough to reduce the debt pile. Consumers are drowning in debt on paper but still spend which must mean liquidity is still there. Peraps the last of QE1 is filtering through.

For now, all the fundamentals are positove, AAA+ bonds, FTSE nearing 6000, Strong £, full employment relative to others, slow HPC, and record low IR with no sign that the BoE will move anytime soon.

Where is the trigger?

Share this post


Link to post
Share on other sites

Nicely put. (...)

Thanks.

(...) Where is the trigger?

Here. Check the deficit. (And do remember Mckinsey TOTAL national debts (gov.+ households + companies). Crash it will.

20101023_INT400.gif

Edited by Tired of Waiting

Share this post


Link to post
Share on other sites

+ 1

But I think the BoE knows that. And I think they also know that they have to land this sh!t as gently as possible. It will be a crash landing, as controlled as possible, but landing it will, one way or the other. Timing will be everything here, they can't land too fast, or it would break the banks. And they can't delay it for too long, or bond buyers will lose confidence, IR would rocket, and it would break the banks. I think. A very very tricky balancing act.

I'm pretty sure the wizards that didn't see this coming are going to nose dive us into the ground in a blazing golden fireball. I hope they f4ck up spectacularly :D

Edited by General Congreve

Share this post


Link to post
Share on other sites

I'm pretty sure the wizards that didn't see this coming are going to nose dive us into the ground in a blazing golden fireball. I hope they f4ck up spectacularly :D

Was this a subliminal message of some sort? :)

Share this post


Link to post
Share on other sites

Im not paying my mortgage off even though im only paying 1% interest on IOM.

Cost of living is so high these days i never seem to have much spare cash.

The mortgage is so low it feels like i dont have one.

Nice feeling, but at some point it will have to end.. but im hoping for a japanese style multi decade zero interest rates and falling land/house prices too.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 311 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.