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The Debt Situation Continues To Get Worse

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From article in the blog...

"The Bank said the amount of net lending to individuals increased by 0.8 per cent in October, or 10.2 per cent over the past 12 months, leaving the amount outstanding at £1,138bn."

Link:

http://news.ft.com/cms/s/8b59cd22-612a-11d...00779e2340.html

You really have to read between the lines as to what the meaning of the report is.

I think that we often look too deeply at details of house sale volumes, blips up of down each month, quarter point IR changes etc. Stand back and see the bigger picture.

At the end of the day growth for the UK is very poor. Wage inflation is similarly low with pressure from poor high street sales and low paid immigrant workers. True unemployment is rising at currently stands at 12% of the adult population being classed as "non-productive".

House prices are at best flat and probably falling, yet the amount borrowed is increasing at a massive rate....10% per year. Despite recent reports of consumer belt-tightening, overall borrowing increased by 0.8% in october!

Bulls point to the stagnation of the situation as evidence that a crash has been overted.....some how as if the longer it goes on the less likely a crash is to happen. I believe the contrary is the case. We are all agreed I think that debt will be the killer this time around. The longer the current situation goes on, the more sensitive the market gets to samll changes in IR's, unemployment, tax rises, one off bad news, etc.

Whilst we tend to find this long drawn out correction frustrating at times, keep consoling yourself that the longer it goes on, the longer your landlord subsidises your housing costs and the bigger the crash will be.

James.

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From article in the blog...

"The Bank said the amount of net lending to individuals increased by 0.8 per cent in October, or 10.2 per cent over the past 12 months, leaving the amount outstanding at £1,138bn."

Link:

http://news.ft.com/cms/s/8b59cd22-612a-11d...00779e2340.html

You really have to read between the lines as to what the meaning of the report is.

I think that we often look too deeply at details of house sale volumes, blips up of down each month, quarter point IR changes etc. Stand back and see the bigger picture.

At the end of the day growth for the UK is very poor. Wage inflation is similarly low with pressure from poor high street sales and low paid immigrant workers. True unemployment is rising at currently stands at 12% of the adult population being classed as "non-productive".

House prices are at best flat and probably falling, yet the amount borrowed is increasing at a massive rate....10% per year. Despite recent reports of consumer belt-tightening, overall borrowing increased by 0.8% in october!

Bulls point to the stagnation of the situation as evidence that a crash has been overted.....some how as if the longer it goes on the less likely a crash is to happen. I believe the contrary is the case. We are all agreed I think that debt will be the killer this time around. The longer the current situation goes on, the more sensitive the market gets to samll changes in IR's, unemployment, tax rises, one off bad news, etc.

Whilst we tend to find this long drawn out correction frustrating at times, keep consoling yourself that the longer it goes on, the longer your landlord subsidises your housing costs and the bigger the crash will be.

James.

Are people borrowing to pay mortgages they cant afford, borrowing to pay for fuel they cant afford, borrowing for council tax they cant afford?? :ph34r:

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HenryWeston,

Borrowing to pay for a govt and economic policy they cannot afford!

10% debt growth is horrific, as this is growth measured on top of an already ballooned figure. The BOE's rate cut in the summer will further magnify the fallout.

Edited by OnlyMe

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HenryWeston,

Borrowing to pay for a govt and economic policy they cannot afford!

10% debt growth is horrific, as this is growth measured on top of an already ballooned figure. The BOE's rate cut in the summer will further magnify the fallout.

borrowing more and more could go on for a long time yet though couldnt it? its so easy for anyone to get credit cards, so if you max one out no problem just get another! just look at the money saving expert message board for lots of examples of £30,000+ card debt :blink:

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Agreed, I think that we are now in a situation where the average consumer/householder is borrowing more and more just to keep his head above the water. Unfortunately I think that this may go on for some time, with the gov't fudging figures on inflation, whilst putting pressure on the BOE to loosen credit further.

To be honest it would be better for us if IR's were lowered drastically to bring the situation to a head quicker. It would finally kill off the consumer.

The only problem is that it may go on for so long that when the country finally does come to its senses that the whock economy is totally donald-ducked for all of us!

JP.

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Only Me

ECB are looking to increass rates

FED are also looking to increase rates

the £Pound is failling

Oil and Gas is forcing up inflation

and you think

The BOE's rate cut in the summer will further magnify the fallout.

not saying you are wrong but if they do try this then expect to see £1.00=1.00EU

Have you seen how the price of little electric generators has started to drift upwards !

Justice will keep warm cus he just asked all the local estate agents to send him details on houses within a price range of £120k to £300k so he can burn all the details in the fire to keep nice and warm this xmas. :)

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Agreed, I think that we are now in a situation where the average consumer/householder is borrowing more and more just to keep his head above the water. Unfortunately I think that this may go on for some time, with the gov't fudging figures on inflation, whilst putting pressure on the BOE to loosen credit further.

To be honest it would be better for us if IR's were lowered drastically to bring the situation to a head quicker. It would finally kill off the consumer.

The only problem is that it may go on for so long that when the country finally does come to its senses that the whock economy is totally donald-ducked for all of us!

JP.

Interesting post. We're all wishing that house prices come down significantly but i occasionally wonder what the side effect of a correction could be. The economy is complicated and works in weird ways and whatever set of circumstances bring down the prices, there may be far reaching adverse effects that may take the edge off what we all want.

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Interesting post. We're all wishing that house prices come down significantly but i occasionally wonder what the side effect of a correction could be. The economy is complicated and works in weird ways and whatever set of circumstances bring down the prices, there may be far reaching adverse effects that may take the edge off what we all want.

In other words "be careful what you wish for".

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Guest growl

Bumped into a neighbour of mine who I hadn't seen for a while a month ago. We were both out with our dogs, so she decided to tag along with hers. I try to avoid her as she's one of those that brags about her spending habits, yet hates it when you mention how you've got a bargain or if your business is doing well. Her husband was away on business, and she got a call from him. I stepped away a few yards and threw a frisbie for her dog out of politeness. But I couldn't help overhear her get into a heated argument with him about how she hadn't managed to sell their second home despite dropping the price twice. No figures were mentioned and she was upset that I could hear this. I decided to give her dog back and carry on the walk by myself.

Bumped into her again four days ago. She was complaining that her washing machine had broken down and her husband had lost a contract. Just as it is coming up to Christmas. She was moaning about how things always happen at this time of year. Now my washing machine broke down last spring, but I had savings for such emergencies and bought one...cash.

'Oh', she says, 'Never mind I'll just get everything for Christmas, including the washing machine on the credit card. I can pay it back in January.'

Sure I thought.

When I spotted her on Tuesday while out with the dog I turned into my road quick.

These people are just boring me now. Its like they just drift through life following the crowd and never planning for anything. If you try to give them advice, they just get resentful. I can't be bothered these days with them. I'd rather talk to people who are planning forward. <_<

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Bumped into a neighbour of mine who I hadn't seen for a while a month ago. We were both out with our dogs, so she decided to tag along with hers. I try to avoid her as she's one of those that brags about her spending habits, yet hates it when you mention how you've got a bargain or if your business is doing well. Her husband was away on business, and she got a call from him. I stepped away a few yards and threw a frisbie for her dog out of politeness. But I couldn't help overhear her get into a heated argument with him about how she hadn't managed to sell their second home despite dropping the price twice. No figures were mentioned and she was upset that I could hear this. I decided to give her dog back and carry on the walk by myself.

Bumped into her again four days ago. She was complaining that her washing machine had broken down and her husband had lost a contract. Just as it is coming up to Christmas. She was moaning about how things always happen at this time of year. Now my washing machine broke down last spring, but I had savings for such emergencies and bought one...cash.

'Oh', she says, 'Never mind I'll just get everything for Christmas, including the washing machine on the credit card. I can pay it back in January.'

Sure I thought.

When I spotted her on Tuesday while out with the dog I turned into my road quick.

These people are just boring me now. Its like they just drift through life following the crowd and never planning for anything. If you try to give them advice, they just get resentful. I can't be bothered these days with them. I'd rather talk to people who are planning forward. <_<

I've really started getting my finances on track lately. I was never in debt, but was not keeping tabs on things like I should. Have now been tracking EVERY PENNY of income/expenditure. It's quite an eye opener I tell you and quite fun when you get into it. I now consider each purchase carefully and make sure my money is earning best ineterest rate avail. Not stingy, just think twice.

Managed to save more than two thirds of my net income for 2 months in a row now!

JP.

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Guest growl

I've really started getting my finances on track lately. I was never in debt, but was not keeping tabs on things like I should. Have now been tracking EVERY PENNY of income/expenditure. It's quite an eye opener I tell you and quite fun when you get into it. I now consider each purchase carefully and make sure my money is earning best ineterest rate avail. Not stingy, just think twice.

Managed to save more than two thirds of my net income for 2 months in a row now!

JP.

That's more like it, and you're right...it is amazing how much you can save. Then when you really need to pay for something unexpected. Or you want to treat yourself, then you can do it without that horrible thought at the back of your mind that you are using debt. Its a nice feeling knowing you have the cash. I'm going on a ski-ing holiday in Switzerland for two weeks over the Christmas period, and I've been planning it since last January. Its all paid for and we have the spending money. In the new year when I get back there will be no credit card bills sitting on the hall floor. :D

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That's more like it, and you're right...it is amazing how much you can save. Then when you really need to pay for something unexpected. Or you want to treat yourself, then you can do it without that horrible thought at the back of your mind that you are using debt. Its a nice feeling knowing you have the cash. I'm going on a ski-ing holiday in Switzerland for two weeks over the Christmas period, and I've been planning it since last January. Its all paid for and we have the spending money. In the new year when I get back there will be no credit card bills sitting on the hall floor. :D

Same here - I'm off on snowboarding holiday over xmas too - paid it back in October using my debit card (credit card payment would've been 2% extra - screw that).

Im now thinking of completely canning my credit card - I pay it off each month if I do use it, but

just cant be arsed with it anymore. Can't believe it has a £7500 limit either - ludicrous!

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Bumped into a neighbour of mine who I hadn't seen for a while....

Yep, it is a sad fact of life that there are a lot of stupid people like this lady out there living the Beckham lifestyle, but with no, I MEAN NO conception of interest rates, prudence, saving, inflation or any other of the piddling trifles that don't concern you when your house is rocketing in value.

Memories are indeed very short for a lot of people, and I am continually amazed at how quickly 'debt culture' has taken root in our society - Weren't we hard-working Protestants once??

The recent rise in mortgage approvals is simply down to debt consolidation on the back of the house, after watching/reading yet another VI report saying that the crash has been avoided....well that's all right then. :blink:

As the housing free-money spigot drys up, price inflation is coming on line...the level of consumption that thickos like this girl think is their God-given right is being revealed as nothing more than a fantasy.

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Bumped into her again four days ago. She was complaining that her washing machine had broken down and her husband had lost a contract. Just as it is coming up to Christmas. She was moaning about how things always happen at this time of year. Now my washing machine broke down last spring, but I had savings for such emergencies and bought one...cash.

'Oh', she says, 'Never mind I'll just get everything for Christmas, including the washing machine on the credit card. I can pay it back in January.'

You don't realise how important a washing machine is until it breaks down...

Same with debt. Doesn't seem a problem until the income (employment) dries up.

(I repaired my washing machine myself. Cost £30 to replace the jetspray pump. Less hassle than buying a new one!)

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Im now thinking of completely canning my credit card - I pay it off each month if I do use it, but

just cant be arsed with it anymore.

It's worth keeping the credit card though if you want to take advantage of the insurance they offer for things you buy using the card, e.g. if a company you buy from on the Internet goes tits-up and you never receive your goods, you can claim it back.

Up to you though. :D

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What I am finding now is that more and more people, those who only 2 or 3 months ago rubbished any thought of a recession let alone a HPC, are now letting slip the odd comment about being short of money or worried about where things are going with the economy.

My ex partner only mentioned in a phone call this week, (bearing in mind that a month ago everything was all about her 70K extension and how wonderful her life, her modernised home and her new man were.), that she "does not have two pennies to rub together at the moment". She does not appear to be alone in this and I think that people are now begining to wake up and be open more to the reality of a recession than they were open to the idea of a HPC. Of course, in the UK both go hand in hand.

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Make no mistake fellow bears, the planets are aligning. Of course, the sensible ones on this forum have known this for a long time. Of course being patient is never easy, these things don't happen overnight...but we have seen the various factors coming together, and now the perception of the idiot on the street is FINALLY beginning to change. The unreality of the economy and the VI spin is being writ large on the street by the day to day experience of those struggling to get by.

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borrowing more and more could go on for a long time yet though couldnt it? its so easy for anyone to get credit cards, so if you max one out no problem just get another! just look at the money saving expert message board for lots of examples of £30,000+ card debt :blink:

yes but not as "cheap" as it was as many banks now charging "handling fee" for balance transfer. the days of rate card whores being able to switch their £20K debt to another 0% card, without a care in the world are over. and i must admit i did it for years and it kept me out of trouble. thankfully got it all paid off now but it took 10 yrs after i left college. and still i get offers of at least 2 cards per month thru the post.........

more and more are just jacking the debt and declaring themselves bankrupt but obv this has serious repocussions on your credit history...........

Edited by beenhearingthisforyears

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Make no mistake fellow bears, the planets are aligning. Of course, the sensible ones on this forum have known this for a long time. Of course being patient is never easy, these things don't happen overnight...but we have seen the various factors slowly coming together, and now the perception of the idiot on the street is FINALLY beginning to change. The unreality of the economy and the VI spin is being writ large on the street by the day to day experience of those struggling to get by.

I notice the bulls are being rather quiet today...

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One of my friends cannot understand why her aunt has started compalaining about being short of money this past few months. The friend has always been given the impression that the aunt was minted. Inhereited property, husband worked loads of overtime, earned good money, always had good holidays, nice cars etc......

Reality appears to be finally dawning on people. And it's about time too !!

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One of my friends cannot understand why her aunt has started compalaining about being short of money this past few months. The friend has always been given the impression that the aunt was minted. Inhereited property, husband worked loads of overtime, earned good money, always had good holidays, nice cars etc......

Reality appears to be finally dawning on people. And it's about time too !!

Only when the tide goes out do you see who's been swimming with no trunks on!

Love that quote.

JP.

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It's worth keeping the credit card though if you want to take advantage of the insurance they offer for things you buy using the card, e.g. if a company you buy from on the Internet goes tits-up and you never receive your goods, you can claim it back.

Up to you though. :D

Good point!! Forgot there was a plus side to it. I'll phone them up this week and get my limit dropped

to £500 - they'll love that! :D

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Are people borrowing to pay mortgages they cant afford, borrowing to pay for fuel they cant afford, borrowing for council tax they cant afford?? :ph34r:

YES They are!!!! And LOADS of them are going bankrupt..... Very very bad times ahead.....

If anyone buys a property now - they must be TOTALLY INSANE..... unless they get a 50-60% "discount"....

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Ozzmosiz why not see if you can change to a CC that gives AirMiles, and get it paid off every month by direct debit. We go on holiday on schedules flights each year for free* courtesy of Natwest Bank! (* well it used to be free now there are various charges, but it's still cheaper than RyanAir & that Orange airline).

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  • 301 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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