BOE confrims it "will have to act" to curb inflation

[Warlord]

1 hour ago, dpg50000 said:

So, we have RPI at 4.9% - https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

Looks like IR rises are, as predicted, extremely unlikely (bar a token one) - we've had higher inflation than that in, I think, 2010-11 and the BOE just "looked through it".

Nothing to see here..........

[winkie]

If no action is taken by tptb people will have to or will be forced to take action, by action will mean spending and borrowing less, using less fuel, working from home, not eating out, not buying so much tat, buying secondhand, sharing more, DIY, helping others with skills, doing voluntary work, even multi generational living, pooling resources, sharing cars, using more free services, travelling less or travelling to places where inflation is not as noticeable, fuel and food is cheaper...... sometimes needs must, by spending less and using less and recycling more also means doing your own bit towards climate change.......all is not lost, people can be very innovative when they want to or have to.

 

[PeanutButter]

Martin Lewis’ mortgage warning

[winkie]

Let's hope mortgage deals don't go the same way as fuel deals did.

[Social Justice League]

4 hours ago, “Nasty Piece of work” said:

But they don’t.

it is “managed” for the Tories to remain in power, by fluffing the voter base by employing fictional riches, and to maximise Tory Party funds by handing wealth to their donors.  It is a direct cost to the population, who generally are to thick to see they are being shafted. It is run for V.I.’s, not the population, who are merely paying.

100% agree.

[Gigantic Purple Slug]

5 hours ago, “Nasty Piece of work” said:

But they don’t.

it is “managed” for the Tories to remain in power, by fluffing the voter base by employing fictional riches, and to maximise Tory Party funds by handing wealth to their donors.  It is a direct cost to the population, who generally are to thick to see they are being shafted. It is run for V.I.’s, not the population, who are merely paying.

Do you think this is a Tory thing ?

Thatcher came up with the aspiration home ownership guff in 1979. Blair doubled down on that through the 00's and the Tories have continued through the 10's.

We've had pretty much Tories in charge ramping the housing market since 1979.

The only real alternative has been Corbyn, and he came up with a raft of other policies which to put it mildly people didn't really like.

I don't see Starmer if he gets in power behaving any differently. It will just be a continuation of the status quo.

The only way I see it changing is if one of the smaller parties like the Lib Dems, or maybe even a dedicated housing party takes hold of housing and really starts to push it. But it's a very divisive issue because there are a lot of strong VIs and a lot of politicians believe rightly or wrongly that a crash in the housing market will lose them an election.

IMO it's going to have to get a lot worse yet before it gets better.

[Horseradish]

19 hours ago, Huggy said:

That would be a bad result.

Yeah, it would be a horrible result. Seems more likely though. Which is, well, awful. Screamingly awful.

[Will!]

On 17/10/2021 at 20:18, spyguy said:

The biggy isnt rate rises, its removal of term funding.

A bit more on term funding here:

BoE: The Term Funding Scheme: design, operation and impact (pdf) from Q4 2018

Quote

The aim of the package — which also included a 25 basis point reduction in Bank Rate to 0.25% and an expansion of asset purchases of £70 billion — was to provide additional support to growth and achieve a sustainable return of inflation to the 2% target.

The primary objective of the TFS was to reinforce the pass‐through of the August 2016 cut in Bank Rate to the interest rates faced by households and companies, allowing the reduction from 0.5% to 0.25% to have broadly the same impact as cuts made when rates were further from zero.

The design of the Scheme reflected this primary objective and it was calibrated so that the reduction in Bank Rate could have a broadly neutral impact on lenders’ margins in aggregate.

Under the TFS, participating banks and building societies were able to borrow funds from the Bank of England at a rate close to Bank Rate for up to four years. The Scheme closed to new lending in February 2018, as envisaged when it was introduced, having made £127 billion of loans.

Quantitative and qualitative evidence, including feedback from participants, suggests that the primary objective of the Scheme was achieved. Observations from the period after the TFS was launched suggest that the reduction in Bank Rate was passed through to lower lending rates on loans such as mortgages, without any significant compression in lenders’ net interest margins, or in the supply of credit to the economy.

 

[“Nasty Piece of work”]

6 hours ago, Gigantic Purple Slug said:

Do you think this is a Tory thing ?

Mostly - but it mainly a liar thing, which the likes of Boris excel at.

 I was dim enough to be taken in by Cameron  - never again will I ever vote for those scum again.  I do think the threat of being voted out keeps anybody true, sharp, and reminds them they serve the public, not themselves.

[Gigantic Purple Slug]

5 minutes ago, “Nasty Piece of work” said:

Mostly - but it mainly a liar thing, which the likes of Boris excel at.

 I was dim enough to be taken in by Cameron  - never again will I ever vote for those scum again.  I do think the threat of being voted out keeps anybody true, sharp, and reminds them they serve the public, not themselves.

I'm not sure it qualifies as "lies". I don't recall any political party having "we are going to lower the average house price" in their manifesto. More weasel words. I suppose the people have said that they are going to build X number of houses and fail, you could call that a lie. i don't look on that as an exclusive Tory issue though.

Mismanagement would probably be a better description for me.

Yes the threat of being voted out does keep politicians on their toes I agree.

[TheCountOfNowhere]

11 hours ago, PeanutButter said:

Martin Lewis’ mortgage warning

He sounds like a 2 bit mortgage broker/estate agent trying to encourage people to get mortgage deals while still on offer. 

Is he on the bbc? 

[TheCountOfNowhere]

11 hours ago, winkie said:

Let's hope mortgage deals don't go the same way as fuel deals did.

Yeah, that would be sad

[Si1]

26 minutes ago, Gigantic Purple Slug said:

I'm not sure it qualifies as "lies". I don't recall any political party having "we are going to lower the average house price" in their manifesto. More weasel words. I suppose the people have said that they are going to build X number of houses and fail, you could call that a lie. i don't look on that as an exclusive Tory issue though.

Mismanagement would probably be a better description for me.

Yes the threat of being voted out does keep politicians on their toes I agree.

I find Arderne in NZ exasperating - she got voted in on the back of helping the poor, disenfranchised and also the impoverished indigenous population. And she's overseen mental house price growth pricing then out from, well, life. And she's adamant that house prices can't be allowed to fall. She's populist and smug, utterly divorced from her stated ideals.

[PeanutButter]

15 minutes ago, TheCountOfNowhere said:

He sounds like a 2 bit mortgage broker/estate agent trying to encourage people to get mortgage deals while still on offer. 

Is he on the bbc? 

 https://en.wikipedia.org/wiki/Martin_Lewis_(financial_journalist)

In July 2015 Lewis sold just over half his shareholding in Moneysupermarket.com, obtained in the sale of Money Saving Expert, for £25.2 million.^[14] On the back of this, he donated a further £1m to Citizens Advice and £500,000 each to The Trussell Trust and the Personal Finance Education Group to fund financial triage and education work.^[15] His personal wealth is estimated at £125 million.^[16] In 2018 Lewis started legal action against Facebook for defamation over fake adverts using his face and name, mostly promoting "bitcoin" and "investing". He later dropped the action after Facebook agreed to fund an anti-scam project.^[17]

[spyguy]

2 hours ago, Will! said:

A bit more on term funding here:

BoE: The Term Funding Scheme: design, operation and impact (pdf) from Q4 2018

 

I dont think BoE messing with Term funding will end well.

TF basically is a way to games the markets pain signals.

Its it's ok, BoE might have cut URs but we reckon is bull. If you want to raise capital then it'll be x%.

BoE not happy, so as well as low IRs, hey starting pushing in the capital side too.

That's fine - If the BoE is going to be doing TF for ever. It's not.

I thought of this after reading-

The Bank of England’s £28bn problem

Investors are worried by the maturing of a big gilt issue as giant QE programme starts to unwind

https://www.ft.com/content/989527cc-f056-41bb-a10c-00095ab8ec85

When the Bank of England outlined plans in August to unwind its £875bn bond-buying programme it promised the process would be “gradual and predictable”. But the central bank’s sudden shift towards higher interest rates has raised the prospect that so-called “quantitative tightening” could begin with a bang

As recently as a month ago, the BoE was expected to stay put until at least March next year, with most investors betting that the first rate rise would not come until the summer. Following a series of warnings over high inflation from Andrew Bailey and his colleagues, lift-off is expected next month, with a second increase to follow in December or February

Crucially, that would lift the BoE’s interest rate to 0.5 per cent, the level at which it plans to begin the process of reversing quantitative easing by halting reinvestments of maturing bonds that it holds. As it happens, bonds held by the BoE worth £28bn fall due on March 7 — the largest such reinvestment since Threadneedle Street started buying bonds.

Investors are left wondering whether a hefty slice of demand — which until recently they took for granted — is set to evaporate. The figure is large enough to spark some big market moves, analysts say.

[spyguy]

Looks like I.Rs are rising, bond yields are going to shoot up and banks will be stuck for funding.

[spyguy]

On 19/10/2021 at 10:03, Gigantic Purple Slug said:

Well I'm pretty sure people on the bottom rungs who can only just about afford the cheapest place possible because prices are outrageous in their particular area would say exactly the same thing.

Bottom line is that IR rises yes will hurt the over leveraged like BTL landlords, but also people on the bottom rung that didn't want to rent, couldn't get a council flat and ended up in an overpriced shoebox because they couldn't afford anything else and wanted a home to keep their family "safe and secure".

The people who made the most money out of housing over the past 20 years will probably be sitting pretty because their homes will be mortgage free.

I doubt though that the government will allow mass repos though because they would only have to house people somewhere else and the homes aren't available. Over leveraged BTL will get rinsed though.

UK is post mass mortgages now.

Go back to the 60s n most Brits still rented.

70s to 2008 saw mortgage debt expand massively.

First boost in early 80s financial deregulation, followed by Browns credit boom to end all credit boons.

Now most people own a house. Outstanding mortgage debt s falling as people pay off mortgages and the under 50s have been priced out.

The number of people exposed to higher IR is not as big as, say, early 90s recession.

However, the number of people who can take on mortgage debt is small. Btl n high house prices are to blame.

Theres no such thing as a housing ladder, ever has been, just a steady accumulation of equity and wages increases.

Io btl, turning the young into renters. And the flood of Chinese and European did for wage growth.

 

 

[TheCountOfNowhere]

31 minutes ago, spyguy said:

Looks like I.Rs are rising, bond yields are going to shoot up and banks will be stuck for funding.

They should be.. But I'd not bet against the boe being evil enough to ignore the inflation and keep rates at 0.

 

Its possible, just look at what the government are doing. They're about to take away people's rights now to speak out anonymously in the Internet. 

Can't protest it seems. 

Can't use certain worlds

6 more months of emergency powers

 

These evil shysters are up to something and it won't be in our favour. 

 

. 

[TheCountOfNowhere]

1 hour ago, Si1 said:

I find Arderne in NZ exasperating - she got voted in on the back of helping the poor, disenfranchised and also the impoverished indigenous population. And she's overseen mental house price growth pricing then out from, well, life. And she's adamant that house prices can't be allowed to fall. She's populist and smug, utterly divorced from her stated ideals.

Sounds like the lies Cameron used to grab power... Then look what he did.  Same establishment/bankers in NZ, OZ and fUKed

[Si1]

6 hours ago, TheCountOfNowhere said:

Sounds like the lies Cameron used to grab power... Then look what he did.  Same establishment/bankers in NZ, OZ and fUKed

I understand she was a special adviser in Downing Street to Blair.

Yeah she is the Kiwi Blair. That is all.

[dpg50000]

8 hours ago, spyguy said:

The Bank of England’s £28bn problem

https://www.ft.com/content/989527cc-f056-41bb-a10c-00095ab8ec85
<snip>

As recently as a month ago, the BoE was expected to stay put until at least March next year, with most investors betting that the first rate rise would not come until the summer. Following a series of warnings over high inflation from Andrew Bailey and his colleagues, lift-off is expected next month, with a second increase to follow in December or February

Crucially, that would lift the BoE’s interest rate to 0.5 per cent, the level at which it plans to begin the process of reversing quantitative easing by halting reinvestments of maturing bonds that it holds. As it happens, bonds held by the BoE worth £28bn fall due on March 7 — the largest such reinvestment since Threadneedle Street started buying bonds.

How gullible do you have to be to believe they are a) going to raise rates twice in next few months, and b) that they're ever going to reverse QE? These crooks will let the country collapse first.

[spyguy]

50 minutes ago, dpg50000 said:

How gullible do you have to be to believe they are a) going to raise rates twice in next few months, and b) that they're ever going to reverse QE? These crooks will let the country collapse first.

Filed under - Well see.

 

[cnick]

23 hours ago, winkie said:

If no action is taken by tptb people will have to or will be forced to take action, by action will mean spending and borrowing less, using less fuel, working from home, not eating out, not buying so much tat, buying secondhand, sharing more, DIY, helping others with skills, doing voluntary work, even multi generational living, pooling resources, sharing cars, using more free services, travelling less or travelling to places where inflation is not as noticeable, fuel and food is cheaper...... sometimes needs must, by spending less and using less and recycling more also means doing your own bit towards climate change.......all is not lost, people can be very innovative when they want to or have to.

 

Yes, what you're describing is society, where, as you say, people "forced?" to work together. Society,  in this sense, is incompatible with the never ending quest for the politico-bankers' growth.

? 

[Freki]

IR have de facto risen already for the government

Quote

Rising inflation has driven up the cost of repaying Britain’s national debt by around 50% in the first half of the financial year.

Interest payments from April to September totaled £32.7bn, up from £21.7bn a year ago, due to the increase in the Retail Prices Index to which index-linked gilts (government bonds) are pegged.

The RPI has risen sharply this year - hitting 4.9% in September, up from just 0.5% in August 2020.

Source

[winkie]

1 hour ago, cnick said:

Yes, what you're describing is society, where, as you say, people "forced?" to work together. Society,  in this sense, is incompatible with the never ending quest for the politico-bankers' growth.

? 

Quite........better to sell a street load of lawnmowers than two or three that all can share and maintain.