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Int rates cut 0.25%
£70bn more QE (£60bn govt £10bn corp)
£100bn “Term Funding Scheme” so banks pass cuts on
It's worse than I thought.

I guess

"so banks pass cuts on" means "so banks pass cuts on to savers".

These ****s will stop at nothing

These ****s will stop at nothing

Edited by TheCountOfNowhere

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The interest rate cut is a £20 per month saving on 150k mortgage.

The Turd Funding Scheme I'm still unsure about. I doubt it if it will bypass the recently introduced stress tests and stricter lending criteria and be open to everyone.

Prices are still insanely high.

Anyone feel safer in their job today than yesterday? Thought not..

So what has exactly changed? Sentiment?

Edited by AvoidDebt

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Here's why I am thinking the Turd Funding Scheme may turn out to be a complete dud. If we were facing a genuine credit problem it might have worked but we are not. The reason why people are not buying and deals are collapsing is:

1. Major job insecurity.

2. Sky high prices that diminish the purchasing power of even the most highly paid professional to a pauper.

The TFS does nothing to address any of the above two. Nor does it help extend the amount that you can personally borrow as it is still subject to the below stress tests. There may well be some decent five and ten year fixed deals off the back of this and possibly a new HTB scheme that tempts some people to buy into the bubble but the above two structural problems will remain, grow and continue to act as a barrier.

When assessing affordability, mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, Bank Rate were to be 3 percentage points higher than the prevailing rate at origination.

https://www.the-fca.org.uk/firms/interest-rate-stress-test

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Here's why I am thinking the Turd Funding Scheme may turn out to be a complete dud. If we were facing a genuine credit problem it might have worked but we are not. The reason why people are not buying and deals are collapsing is:

1. Major job insecurity.

2. Sky high prices that diminish the purchasing power of even the most highly paid professional to a pauper.

The TFS does nothing to address any of the above two. Nor does it help extend the amount that you can personally borrow as it is still subject to the below stress tests. There may well be some decent five and ten year fixed deals off the back of this and possibly a new HTB scheme that tempts some people to buy into the bubble but the above two structural problems will remain, grow and continue to act as a barrier.

When assessing affordability, mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, Bank Rate were to be 3 percentage points higher than the prevailing rate at origination.

https://www.the-fca.org.uk/firms/interest-rate-stress-test

********, it'll have the same effect as the last time, some spivs will use it to ramp up prices.

Forget collapsing hpuse prices for another 2 years.

These f**ks have just stolen your deposits

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Easy, let the borrower's spend their extra £20 savings back into the economy.....savers to save an extra £20 a month to make up the losses.;)

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Haha, Turd Lending Scheme. How appropriate. So the remoaners in the City have found the the ear of the soon to be retiring Governor of the Bank of England. However the rest of the country, the 99.9%, are over extended, they can't borrow any more of their children's future as they can barely make the payments on their current debts.

We're turning Japanese.

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You can't get a quart into a pint pot.

Anyway as time goes on central banks are becoming more and more ineffective.

This will have zero impact on the real world.

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Here's why I am thinking the Turd Funding Scheme may turn out to be a complete dud. If we were facing a genuine credit problem it might have worked but we are not. The reason why people are not buying and deals are collapsing is:

1. Major job insecurity.

2. Sky high prices that diminish the purchasing power of even the most highly paid professional to a pauper.

The TFS does nothing to address any of the above two. Nor does it help extend the amount that you can personally borrow as it is still subject to the below stress tests. There may well be some decent five and ten year fixed deals off the back of this and possibly a new HTB scheme that tempts some people to buy into the bubble but the above two structural problems will remain, grow and continue to act as a barrier.

When assessing affordability, mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if, at any point over the first five years of the loan, Bank Rate were to be 3 percentage points higher than the prevailing rate at origination.

https://www.the-fca.org.uk/firms/interest-rate-stress-test

Rates unlikely to get anywhere near 3% in 5 years.

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What the bank has done is effectively removed any means to be proven wrong on their brexit predictions for the economy. Any lack of deterioration or upturn can now be claimed to the credit of recent action by the boe. Conversely their credibility would have been hugely damaged had the economy shown no significant deterioration in the absence of these measures... traitors the lot of them..

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The impact of this is not so much an individuals small interest gain or loss, but the actions of the rest of the world...other central bankers.....all in this together.....till the time of huge write off of reciprocal debts?.......only money.;)

Edited by winkie

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'Rates unlikely to get anywhere near 3% in 5 years.'

Yes, and if they choose to ignore or rewrite the stress tests then it really is fill yer boots time, but I don't think they will/can. The amount I can borrow today is exactly the same as yesterday. There needs to be additional props for this to change..

Edited by AvoidDebt

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The impact of this is not so much an individuals small interest gain or loss, but the actions of the rest of the world...other central bankers.....all in this together.....till the time of huge write off of reciprocal debts?.......only money. ;)

We can all see it coming, but the BIG question now is what's the best course of action ?

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'Rates unlikely to get anywhere near 3% in 5 years.'

Yes, and if they choose to ignore or rewrite the stress tests then it really is fill yer boots time, but I don't think they will/can. The amount I can borrow today is exactly the same as yesterday. There needs to be additional props for this to change..

It's not you spending tho...it's some spiv company with access to the "free money" who will be more than willing to ride around tiown buying up loads of real estate at any price just to show how rich he is.

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We can all see it coming, but the BIG question now is what's the best course of action ?

Wait to hear Mays fiscal response........house prices can only increase by how much people can and governments will pay for rents, falling secure employment and regular incomes will mean rents are very volatile at best.....a house is not an investment if the costs of purchasing and holding does not cover capital growth....there is no yield in it.

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Wait to hear Mays fiscal response........house prices can only increase by how much people can and governments will pay for rents, falling secure employment and regular incomes will mean rents are very volatile at best.....a house is not an investment if the costs of purchasing and holding does not cover capital growth....there is no yield in it.

So rent. Yes with you on that.

And protecting your cash/savings etc ?

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********, it'll have the same effect as the last time, some spivs will use it to ramp up prices.

Forget collapsing hpuse prices for another 2 years.

These f**ks have just stolen your deposits

Not housing but they'll be using the same technique.

Some furniture salesman was on the radio yesterday saying that with the rate cut people knew that they could now borrow safely and start to spend.

Straight from the spivs book of spivery - advocating heads-in-the-cloudism.

Of course nobody questioned the self serving statement. They didn't even say something like but they'll have to pay the money back.

Edited by billybong

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Not housing but they'll be using the same technique.

Some furniture salesman was on the radio yesterday saying that with the rate cut people knew that they could now borrow safely and start to spend.

Straight from the spivs book of spivery.

Of course nobody questioned the self serving statement. They didn't even say something like but they'll have to pay the money back.

...Did they mention the increased food costs due to the £ collapse ?

...hmmm thought not.

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...Did they mention the increased food costs due to the £ collapse ?

...hmmm thought not.

Locally grown healthy food......something we all need to survive. ;)

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I've tried not to think about this scheme, but had a 3am moment unfortunately.

Are the recent supposed increases in prices the beginning of this scheme starting to manifest itself?

I hate to say it but in on the verge of giving up and buying. While there hasn't been so much media coverage of this scheme, it's intentions are clear: bypass real interest rates and bypass the productive economy in order to keep things pumped.

I can't imagine a future without more of the same: the next generations are such generous lenders :s

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On 05/08/2016 at 8:37 AM, TheCountOfNowhere said:

...Did they mention the increased food costs due to the £ collapse ?

...hmmm thought not.

The era of cheap food and fuel is over.

Quote

Electricity prices have surged by more than 40pc over the past year to almost £50 a megawatt, according to the ICIS power index, as the number of power plants has dwindled.

However, analysts warned that prices could surge to eye-watering highs of £3,000 a megawatt for some evening periods this week as the UK market faces its highest demand this winter.

The UK typically imports cheaper nuclear power from France during peak hours. 

The market is braced for a round of price shocks which could emerge by midweek as cold weather forces French electricity demand to within a whisker of its all-time high.

http://www.telegraph.co.uk/business/2017/01/14/era-cheap-food-fuel-comes-end/

 

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Increased today from £100bn to £115bn.

Is it a coincidence that TFS could be Theft From Savers?

 

 

Quote

 

Fifteen billion pounds. For those of you who've lived through the past decade - crisis after crisis, of governments routinely spending enormous amounts to bail out their banks - that might not sound like a lot of money.

But, for what it's worth, it amounts to about £550 for every household in the country.

It's equivalent to a 3p one-off income tax cut.

It would finance the construction of Britain's two new (monumentally expensive) aircraft carriers, and still leave change for three more.

So the fact that the Bank of England announced today that it would electronically print an extra £15bn of money to pour into Britain's financial system is not without consequence.

But if the Bank gets its way you're unlikely to hear much about this in the press.

That's because this £15bn is going into one of the most technical, abstruse schemes the Bank has ever devised.

The Term Funding Scheme was established in the wake of last year's Brexit vote, to encourage banks to lend more cash to consumers and to pass on lower interest rates to households.

In short, the Bank was worried that with interest rates at historic lows, high street lenders (whose business models rely on making a turn on their loans) would fail to pass on the rate cut to consumers.

So the BoE promised to lend those banks money - and lots of it - if they lent it on to their customers.

And where did the BoE get that money? It printed it.

Over the past year, the Bank has printed more than £78bn of cash and lent it to Britain's banks to encourage them to lend.

While this is subtly different to the quantitative easing scheme in some senses (under QE the Bank printed money to buy assets; in the TFS it prints money to lend to banks temporarily, taking collateral in exchange), in other senses it is similar.

For one thing, it involves a sharp increase in the size of the Bank's balance sheet.

After this increase the total size of the Asset Purchase Facility (basically all the money the Bank has printed) will rise from £545bn to £560bn.

For another, it acts as a stimulus for the economy.

It won't have escaped your attention that over the past few months a number of economists (including, ironically, some at the Bank), have sounded the alarm over rising rates of consumer debt.

Well, the chances are a good chunk of that lending has been encouraged by this BoE scheme.

Lo and behold, the Bank has now announced that as things stand, consumer lending is increasing at such a rate that by the time the TFS comes to the end of its life, next February, it will have breached the £100bn total the Bank expected from it.

That left the Bank with two choices: increase the total amount going into the TFS, or shorten its life. It chose the former.

In some senses, that was the easy decision.

It is not for the Monetary Policy Committee to intervene in the financial system (there is a difference). That is the job of another part of the Bank - the Financial Policy Committee.

But it does leave us in an interesting situation.

It is quite plausible the FPC introduces some checks and constraints on lending in the coming months. So the Bank would effectively be pressing the accelerator and the brake pedal at one and the same time.

http://news.sky.com/story/the-15bn-stimulus-the-bank-does-and-doesnt-want-10972127

 

 

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10 minutes ago, Noallegiance said:

Does this count as more QE?

The article I posted implies that.

Asset Purchase Facility now £560bn

Pre-Brexit QE was £375bn.

Brexit added £60bn more QE, £10bn to buy Corporate Bonds and £100bn TFS so totalled £545bn topped up by £15bn today to £560bn

Edit for link http://www.thisismoney.co.uk/money/news/article-3723409/Bank-England-cuts-rates-new-record-low-0-25-delivers-60bn-QE.html

 

Edited by Democorruptcy

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12 minutes ago, Democorruptcy said:

The article I posted implies that.

Asset Purchase Facility now £560bn

Pre-Brexit QE was £375bn.

Brexit added £60bn more QE, £10bn to buy Corporate Bonds and £100bn TFS so totalled £545bn topped up by £15bn today to £560bn

Edit for link http://www.thisismoney.co.uk/money/news/article-3723409/Bank-England-cuts-rates-new-record-low-0-25-delivers-60bn-QE.html

 

More they print the more likely Labour will win at the next election  .. Theresa May said so herself in a roundabout way before appointing by clearly saying it creates inequality then appointing a Keynesian landlord Chancellor with a £3million land deal in the offing and not sacking this vile excuse for a human Governor of the BoE.

Never thought i'd hate a central banker, but i truly despise Mark Carney.

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