Bleak Start To 2013 As Poorest Uk Households Feel The Squeeze

[doomed]

So they won't be allowed to default? But, it can't go on for ever, can it?

Peter.

If the money can't be paid back default is the only option. It is completely unavoidable no matter how much can kicking they do.

[Gone baby gone]

But - I strongly believe that I am happier than I would be with large mortgage debts and a lack of freedom to move. I have several mates in the UK who in the past six months have started to question their working lives and the way the UK is going. Never seen that before.

I dunno, could be classic mid-life crisis. One of my pals who is an STR told me that he felt his life was shit and he simply was not enjoying anything anymore. In his case he has small children and a job he perceives as a dead end, with an increasing number of hours but with no extra money being provided. Due to the nature of his work he can't find another job nearby and he and his wife would struggle to pay the rent+bills on one salary.

A mortgage isn't the only limitation on your freedom to move, having kids in school is a huge limiting factor too.

It goes deeper than simply property, it's a lack of hope. When you are 35-40, both working, toting an armful of qualifications and struggling to have as good a standard of living as your parents did on one salary, you begin to question what is going on and if the work is worth it.

[dizzib]

The government need to cut spending by 160 billion a year, before it even thinks about paying back the trillion pound debt left behind. This is not going to be possible with out complete state failure.

There literally is no way out for them.

, effectively cancelling 30% of the debt. If QE continues at the current rate the entire debt should be cancelled around 7 years from now. In other words a (hyper?)inflationary default by stealth.

[Dorkins]

, effectively cancelling 30% of the debt. If QE continues at the current rate the entire debt should be cancelled around 7 years from now. In other words a (hyper?)inflationary default by stealth.

You are getting debts and deficits confused.

[Goat]

You are getting debts and deficits confused.

Is he a member of the shadow cabinet?

[TheCountOfNowhere]

Is he a member of the shadow cabinet?

probably has a job in a bank.

[Warwick-Watcher]

Perhaps the debt binge was actually hiding something else... that the standard of living in the UK has been falling for years.

Now the debt binge is over, the "new normal" is here. And it turns out we were sold a pup from about 1990 onwards

Balance of trade has been negative for about 15 years now (went negative in 1997 - now what happened in that year ???).

http://www.tradingeconomics.com/united-kingdom/balance-of-trade

North Sea oil and gas sales ever declining meaning we import more of the basics every year. With low interest rates the pound is weak against the dollar - now remind me - what's oil and gas priced in ?

Larger population means higher national GDP but try measuring GDP per head instead? Lots of immigrants (EU and non-EU) not earning huge wages so lowering the average income.

[TheCountOfNowhere]

The big mistake we all made was to believe that what was "right" would happen.

When the majority of the country are mired in debt and/or mentally and physically invested in the price of property rising, the government will do what it thinks will satisfy the majority and not necessarily take the "right" action.

that's the thing. the minority of the country are in a bad position because of their house debt, not the majority.

with that in mind you have to ask why the politicians, who would quite frankly lick your ar5e if you voted for them, prepared to alienate the whole country rather than just let a minority take a hit.

the only conclusion i can come to is that the hit would be enough to topple the banking system.

keeping up horse prices is not about saving anyone other than their banker friends. some people will benefit, sure, most won't, but the bankers necks will be saved one way or another.

its pretty shameful what is going on.

Edited February 18, 2013 by TheCountOfNowhere

[S P]

that's the thing. the minority of the country are in a bad position because of their house debt, not the majority.

with that in mind you have to ask why the politicians, who would quite frankly lick your ar5e if you voted for them, prepared to alienate the whole country rather than just let a minority take a hit.

the only conclusion i can come to is that the hit would be enough to topple the banking system.

keeping up horse prices is not about saving anyone other than their banker friends. some people will benefit, sure, most won't, but the bankers necks will be saved one way or another.

its pretty shameful what is going on.

I think you realise the majority of clueless people think that high and rising house prices is 'good' news, and falling prices are definetely 'bad' news. Keeping house prices up is about votes, and I think the idots are winning (to quote Dan Ashcroft).

S P

[Gone baby gone]

that's the thing. the minority of the country are in a bad position because of their house debt, not the majority.

It's not simply people who have debts who have a vested interest in house prices though.

Millions of retired people do.

Millions of BTLers (private and company owned) do.

And as you pointed out, banks do to.

[Dorkins]

Is he a member of the shadow cabinet?

The prime minister seems to struggle with the difference too.

[rantnrave]

I think you realise the majority of clueless people think that high and rising house prices is 'good' news, and falling prices are definetely 'bad' news. Keeping house prices up is about votes, and I think the idots are winning (to quote Dan Ashcroft).

S P

First run of the FLS scheme is due to expire at the start of 2014. No doubt it will get extended for at least another nine months and produce a noticeable bounce in UK house prices from then until at least the first few months of 2015. I wonder if anything else of any significance is due to take place at around that time??

[dizzib]

You are getting debts and deficits confused.

If the Treasury pays interest to itself then I'd say the gilts (debt not deficit) held by BoE are effectively cancelled, assuming of course the QE is never unwound.

Actually 'cancelled' is the wrong word since the Treasury would still be paying 0.5% to the BoE via the APF, which begs the question why is QE money being lent by BoE at interest ?

[S P]

First run of the FLS scheme is due to expire at the start of 2014. No doubt it will get extended for at least another nine months and produce a noticeable bounce in UK house prices from then until at least the first few months of 2015. I wonder if anything else of any significance is due to take place at around that time??

Yep - Fighting a GE with house prices tanking will be suicide, so I expect the least they will do is maintain or extend it. Best case for them it makes a modest bounce happen, worse case for them it stops 'noticable/perceived' falls (it's possibly doing the latter right now). Of couse the only message from the opposition will be: 'you aren't doing enough'.

S P

[dances with sheeple]

Yep - Fighting a GE with house prices tanking will be suicide, so I expect the least they will do is maintain or extend it. Best case for them it makes a modest bounce happen, worse case for them it stops 'noticable/perceived' falls (it's possibly doing the latter right now). Of couse the only message from the opposition will be: 'you aren't doing enough'.

S P

And of course the BOE and UK government can do all this because they are supreme prime movers in the known universe? Little things like a Eurozone on the brink of serious unrest and escalating currency wars won`t trouble them? It is going to fall apart, probably before the next election IMO. We are just seeing noise in the house price stats as instruments and dials start spinning as a prelude to the vehicle coming apart at the seams

[NEO72]

Yep - Fighting a GE with house prices tanking will be suicide, so I expect the least they will do is maintain or extend it. Best case for them it makes a modest bounce happen, worse case for them it stops 'noticable/perceived' falls (it's possibly doing the latter right now). Of couse the only message from the opposition will be: 'you aren't doing enough'.

S P

I don't think it'll be extended - a lot of core tory voters are being hammered by low savings rates directly attributable to the fls. Even this bunch of clowns must know running it too close to the GE would do more political harm than good.

[goldbug9999]

the difference between a person "suffering" on £57K and a person "suffering" on £15K, is that one can drop one their two holidays, the other has to find a cheaper cut of meat....or lose a meal a day.

57K is £3,200 take home a month / £760 a week: hardly a fortune in this rip-off island of ours.

[goldbug9999]

57K is £3,200 take home a month / £760 a week: hardly a fortune in this rip-off island of ours.

Its also just above the level where you lose all the hand outs so youd probably be just as well off earning 30k.

[goldbug9999]

keeping up horse prices ...

so the supermarkets are getting priced out of "alternative" meat products now ??

[Vagabond]

Gross income £15k, take home £1080 a month. £400pcm room in an HMO in a town/city where there might actually be a job, £100 a month council tax and utilities = £19 a day for transport, food, clothing, prescriptions/dental etc. Assuming £10 a day for these things, able to save £9 a day or about £3k a year. This person will have to go without most of the things an average person in our society considers part of normal life e.g. cinema, pub, personal motorised transport, anything charging an entrance fee. That's pretty close to being poor.

Only relatively for the UK and you will never eliminate that.

Compared to most of the world he has won the lottery of life already.

[porca misèria]

Only relatively for the UK and you will never eliminate that.

Compared to most of the world he has won the lottery of life already.

Or compared to historical norms in the UK. Even within the lifetime of people now of a certain age.

[Dorkins]

Compared to most of the world he has won the lottery of life already.

I doubt that. Global happiness surveys suggest that it feels better to be poor (in absolute terms) in a country where poor (in absolute terms) is the norm than to be relatively poor in a rich country.

[S P]

And of course the BOE and UK government can do all this because they are supreme prime movers in the known universe? Little things like a Eurozone on the brink of serious unrest and escalating currency wars won`t trouble them? It is going to fall apart, probably before the next election IMO. We are just seeing noise in the house price stats as instruments and dials start spinning as a prelude to the vehicle coming apart at the seams

Here's hoping you're right, but tbh nothing would suprise me with how far they're willing to scrape that barrel

[Vagabond]

I doubt that. Global happiness surveys suggest that it feels better to be poor (in absolute terms) in a country where poor (in absolute terms) is the norm than to be relatively poor in a rich country.

Its a fair point but I'd still rather be dirt poor in the Uk with our free medical care and welfare system rather than dirt poor in a village in Africa using your hand for toilet paper.

Given that choice our 'poor' may find they're suddenly not as unhappy as they thought.