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tomandlu

George Osborne On Interest Rates

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(the markets) have taken the view that the UK is a safe bet, a good bet at the moment. Our interest rates are very close to Germany's, yet our budget deficit is the same as Portugal's. That is the remarkable thing, and it is the confidence that we have earned out there in the international community that means businesses and families are enjoying much lower interest rates than Portugese families, or Greek families or even Italian or Spanish families at the moment, and that is a monetary stimulus for the British economy that would not be there otherwise.

Hmm, rather skimming over the fact that such low rates during a period of high inflation are a sign of desperation...

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Interesting. If you take his words at face value he's saying "the market's given us some space - for now, but fundamentally we're screwed".

i think he means, "Thanks to Merv the swerve taking out oodles of long dated debt maturity before the crisis went nuclear, im more than happy to stand here spout sht and take full plaudits for that decision"

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i think he means, "Thanks to Merv the swerve taking out oodles of long dated debt maturity before the crisis went nuclear, im more than happy to stand here spout sht and take full plaudits for that decision"

:lol:

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Our interest rates are very close to Germany's, yet our budget deficit is the same as Portugal's.

That is the remarkable thing, and it is the confidence that we have earned out there in the international community ..

Oh yes the misleading and concealing waffle is so remarkable.

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i think he means, "Thanks to Merv the swerve taking out oodles of long dated debt maturity before the crisis went nuclear, im more than happy to stand here spout sht and take full plaudits for that decision"

How did Merv the swerve get credit for doing the Treasury's work?

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And Sterling continues it's slide.

Don't worry Bruce, the sterling weakness won't feed inflation, cos Merv says inflation is only temporary, and we need not import anyway.....we are a manufacturing nation.

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How did Merv the swerve get credit for doing the Treasury's work?

Coz i cant see a treasury under the last Labour regime being quite that on the pulse but i may be underestimating them given the sterling work up to that point

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Interesting. If you take his words at face value he's saying "the market's given us some space - for now, but fundamentally we're screwed".

That's the truth of the matter, all our skeletons are still in the closet just waiting to come crashing out.

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So nothing to do with the fact that the pound is a sovereign currency which has already depreciated while Greece carries a substantial depreciation risk as well as having a much weaker balance sheet.

Edited by CrashConnoisseur

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That is the remarkable thing, and it is the confidence that we have earned out there in the international community that means businesses and families are enjoying much lower interest rates than Portugese families, or Greek families or even Italian or Spanish families at the moment, and that is a monetary stimulus for the British economy that would not be there otherwise.

If the greeks had their own central bank buying their own toxic crap wouldnt they too have low rates?

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comeone guys - we have to have this great devaluation thing, the pain on recent FTBs, whos only crime was to do what govt/society encouraged them to do, would be too great

there is societal responsibility here too; of course BTLrs should not get bailed, but that is a side effect

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How did Merv the swerve get credit for doing the Treasury's work?

His interest rate decisions have helped maintain fake the gradient on the 30 year yield curve, haven't they?

Or am I giving him too much credit?

Edited by Jack's Creation

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His interest rate decisions have helped maintain the gradient on the 30 year yield curve, haven't they?

Or am I giving him too much credit?

hi - could you explain this to me please, if poss, I'm sure you're right, but I want to know how that works!

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i think he means, "Thanks to Merv the swerve taking out oodles of long dated debt maturity before the crisis went nuclear, im more than happy to stand here spout sht and take full plaudits for that decision"

Anyone point me to this forthcoming debt loading scedule. There must be data on when this is due and how much somewhere.

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hi - could you explain this to me please, if poss, I'm sure you're right, but I want to know how that works!

Its more a competence and confidence issue. Strongly inverted yield curves have historically preceded economic depressions. Without the BOE's intervention into the bond market via QE, the yield curve would not have looked so rosy.

At it's most basic, a normally inclined yield curve represents a belief by the investor that growth will continue into the future.

Investors also use it for other purposes. For example the spread between the 3 month and 20yr Treasury historically runs at +2%. If this gap widens, it's been a useful and reliable indicator in the past that the economy is improving. IN Jan 2010 this gap was at its widest ever (2.92%), indicating to me that Central banks are possibly using yield curves as a low level form of head fake financial propaganda.

Ted spreads are also used by investors to asses credit risk within the economy.

There are lots of different theories regarding the usefulness of yield curves as economic indicators. Though the central bank interventions of the last couple of years have invalidated most of them

Hope my limited understanding helps.

Edited by Jack's Creation

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Is this the same George Osborne?

Virtuous savers and pensioners have suffered most under Labour

Savers and pensioners are the forgotten victims of Labour's recession.

By George Osborne

8:47PM GMT 18 Dec 2008

Over the past year, someone with £10,000 of savings in an easy access high street account has seen their income fall from £50 a month to less than £25. Having planned for their retirement and put money aside for a rainy day, pensioners and savers are seeing their living standards fall. Those who weren't caught up in Gordon Brown's Age of Irresponsibility are being made to pay the price for it.

Of course, cuts in interest rates by the Bank of England are absolutely necessary to try to restimulate the economy. That is why we called for them. But the unavoidable collateral damage on savers is devastating and it's simply not good enough for the Government to walk on by.

With the US Federal Reserve having reduced its interest rate to zero per cent, we may well see further rate cuts here. This would make life even more difficult for savers.

In circumstances like these, the Government should be there to help. But instead, Gordon Brown has made things worse.

First, he has systematically undermined Britain's savings culture over 10 years. In 1997, he made the calamitous decision to abolish tax relief on dividends paid to pension funds.

According to a report by a fellow of the Institute of Actuaries, this tax raid has slashed the value of private sector pensions by £175 billion. The number of members of private sector pension schemes has fallen from 6.1 million in 1995 to 3.6 million last year, while the savings ratio has more than halved.

Second, there are things Gordon Brown could be doing now to protect savers from further losses. He could suspend the requirement to annuitise accrued pensions at the age of 75. Labour's refusal to do so means that anyone turning 75 in the near future will receive a terrible deal when they are forced to buy an annuity, consigning them to a lower income for the rest of their life. This simply isn't fair. It's also unfair that Gordon Brown still hasn't dealt with the Equitable Life scandal. The Parliamentary Ombudsman found the Government at fault, and the Prime Minister promised that he would respond by Christmas – but is now refusing to take action. That's a disgrace, and won't restore confidence in our savings and pensions system. Third, with Labour's national debt forecast to double to a trillion pounds over the next five years, higher tax rises are inevitable.

While the Prime Minister may have forgotten about savers, the Conservatives have not. We would suspend the annuity rule. We would accept the Ombudsman's report on Equitable Life. We would increase the threshold for inheritance tax, so that the vast majority of responsible families who save for their children will be exempt from estate duty. And we would avoid adding recklessly to the national debt and constrain the growth of government spending.

However, we also want to help savers on more modest incomes, and take steps to encourage saving and reward financial responsibility. We are looking at the tax system to see what can be done. Our general election manifesto will include policies to help savers and pensioners, as part of our plan to deliver economic change for Britain.

George Osborne is the shadow chancellor

http://www.telegraph.co.uk/comment/personal-view/3835309/Virtuous-savers-and-pensioners-have-suffered-most-under-Labour.html

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Anyone point me to this forthcoming debt loading scedule. There must be data on when this is due and how much somewhere.

There was an absolutely fantastic chart that someone posted on here which had a list of the different countries bonds that were listed by amount, length and expiration date. It also listed the percentage issued (I think?).

This is probably what you are looking for, could somebody please repost it, it was a great chart?

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Its more a competence and confidence issue. Strongly inverted yield curves have historically preceded economic depressions. Without the BOE's intervention into the bond market via QE, the yield curve would not have looked so rosy.

At it's most basic, a normally inclined yield curve represents a belief by the investor that growth will continue into the future.

Investors also use it for other purposes. For example the spread between the 3 month and 20yr Treasury historically runs at +2%. If this gap widens, it's been a useful and reliable indicator in the past that the economy is improving. IN Jan 2010 this gap was at its widest ever (2.92%), indicating to me that Central banks are possibly using yield curves as a low level form of head fake financial propaganda.

Ted spreads are also used by investors to asses credit risk within the economy.

There are lots of different theories regarding the usefulness of yield curves as economic indicators. Though the central bank interventions of the last couple of years have invalidated most of them

Hope my limited understanding helps.

cheers

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That is the remarkable thing, and it is the confidence that we have earned out there in the international community that means businesses and families are enjoying much lower interest rates than Portugese families, or Greek families or even Italian or Spanish families at the moment,

Cough, cough, bullsh1t... You can get a 10 year fixed mortgage in Italy (80% LTV) at 4,57% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139353615&CodiceFinalita=1&CodTipoTasso=1&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=10&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

a 20 year variable mortgage (again 80% LTV) at 2,49% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139354055&CodiceFinalita=1&CodTipoTasso=2&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=20&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

and a 20 year fixed mortgage at 4,94% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139353975&CodiceFinalita=1&CodTipoTasso=1&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=20&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

Try that in the UK...

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Cough, cough, bullsh1t... You can get a 10 year fixed mortgage in Italy (80% LTV) at 4,57% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139353615&CodiceFinalita=1&CodTipoTasso=1&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=10&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

a 20 year variable mortgage (again 80% LTV) at 2,49% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139354055&CodiceFinalita=1&CodTipoTasso=2&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=20&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

and a 20 year fixed mortgage at 4,94% APR

http://www.mutuionline.it/richiedi/ricerca/listaofferteprivati.asp?IdInterrogazione=139353975&CodiceFinalita=1&CodTipoTasso=1&CodTipoIndice=0&valore=0200000&ImportoMutuo=0160000&CodiceDurata=20&DurataPreammortamentoDesiderata=&CodFrequenzaRate=1Η=40&CodiceOccupazione=0&CodCategoriaReddituale=1&CodiceResidenza=79&CodiceLocalita=79&ImportoMassimo=0&PeriodoMinimo=0&CodiceEffettivaErogazione=0&CodiceDisponibilita=1&CodiceBanca=0&CodStatoAvanzAcquisto=0&CodPenaleMax=&Reddito=3500

Try that in the UK...

Interesting factoid, thanks.

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Cough, cough, bullsh1t... You can get a 10 year fixed mortgage in Italy (80% LTV) at 4,57% APR

http://www.mutuionli...x=&Reddito=3500

a 20 year variable mortgage (again 80% LTV) at 2,49% APR

http://www.mutuionli...x=&Reddito=3500

and a 20 year fixed mortgage at 4,94% APR

http://www.mutuionli...x=&Reddito=3500

Try that in the UK...

I guess he means existing debtors. Mind you, any existing debtor who went with a mix of fixed and variable will still be suffering, and long term too. They have to find a way out of the fixed portion, but anything available is probably even higher than the fixed.

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  • 276 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% +
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