Bear Goggles Posted March 30, 2022 Author Share Posted March 30, 2022 5 minutes ago, Mancunian284 said: I was in London at the weekend and it was heaving. The economy has made no sense to me for the last 3 or so years. Totally agree, it’s surreal. I’m conscious that I’m probably living in a bubble right now. We’ve had a big increase in our family income over the past couple of years (new jobs) and a significant decrease in our expenditure — less commuting, plus fewer holidays/ eating out etc over lockdown — and we got on a 2y fixed energy deal last autumn just before the increase in gas and electricity prices (pure luck), and we own an EV, so petrol price rises haven’t affected us either. On top of all this we got outbid on a house by £100k last month (we’d already offered over asking price). All I see is boom times, yet the economic data looks horrific. Perhaps it’s just a SE England thing? I can’t make sense of it. Quote Link to comment Share on other sites More sharing options...
Jolly Roger Posted March 30, 2022 Share Posted March 30, 2022 In many cases the 2008 recessionary period didn't really feel any different to what came before - people still went to work, bought gadgets and cars and went on foreign holidays. What kind of crash would it take for the majority to notice a real decline in living standards, a proper depression? Quote Link to comment Share on other sites More sharing options...
robmatic Posted March 30, 2022 Share Posted March 30, 2022 10 hours ago, TheResponsibleHouseBuyer said: doesn't really make sense though......... i thought with lockdowns and WFH people would be saving lots..... especially on rail commutes. Why would they be borrowing? I'm doing an MSc at the moment and I've paid for it using my credit cards because the rates on cash transfers were relatively cheap. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted March 30, 2022 Share Posted March 30, 2022 4 hours ago, Bear Goggles said: I have no idea, but when I look around I see the bars and restaurants busy, roads busy, and people bidding up houses. I just can’t square that with the economic data right now. 3 hours ago, Bear Goggles said: I’m conscious that I’m probably living in a bubble right now. We’ve had a big increase in our family income over the past couple of years (new jobs) and a significant decrease in our expenditure — less commuting, plus fewer holidays/ eating out etc over lockdown — and we got on a 2y fixed energy deal last autumn just before the increase in gas and electricity prices (pure luck), and we own an EV, so petrol price rises haven’t affected us either. On top of all this we got outbid on a house by £100k last month (we’d already offered over asking price). All I see is boom times, yet the economic data looks horrific. Perhaps it’s just a SE England thing? I can’t make sense of it. What economic data looks horrific? What I see is very much a UK of two halves. Yes credit card spending may be increasing, but savings rates remain high - plenty of people are STILL WFH, STILL not taking so many expensive holidays abroad etc. Most people are on a fixed energy deal of some sort. Most people with a mortgage have a 2-5 year fix. So the picture looks rosy for half the country. For the other half it's probably the worst conditions for decades, with fuel bills rocketing etc. Basically if you're a City finance worker you are coining it right now, with your high salary but without so many high costs of living. If you own a City cafe you're screwed because you have half the customers and double the gas bill. Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted March 30, 2022 Share Posted March 30, 2022 With overdraft Apr at an evil 40%. its not suprising credit card debt is up massively Best low-interest credit cards (9%) https://www.which.co.uk/money/credit-cards-and-loans/credit-cards/best-credit-card-deals/best-low-interest-credit-cards-a94wp1x2sl0x Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted March 30, 2022 Author Share Posted March 30, 2022 17 minutes ago, scottbeard said: What economic data looks horrific? What I see is very much a UK of two halves. Yes credit card spending may be increasing, but savings rates remain high - plenty of people are STILL WFH, STILL not taking so many expensive holidays abroad etc. Most people are on a fixed energy deal of some sort. Most people with a mortgage have a 2-5 year fix. So the picture looks rosy for half the country. For the other half it's probably the worst conditions for decades, with fuel bills rocketing etc. Basically if you're a City finance worker you are coining it right now, with your high salary but without so many high costs of living. If you own a City cafe you're screwed because you have half the customers and double the gas bill. I agree, I think this is spot on. We are now a country with two economies. Some people are going to be absolutely screwed by inflation and the "cost of living crisis", those are generally going to be those already on lower incomes. Others are going to be insulated and hedged against inflation via asset price rises, fixed rate mortgages at below the rate on inflation, and pay rises or bonuses, matching inflation - those already with higher incomes or asset wealth. It's a societal nightmare, a massive acceleration of the neoliberal-era wealth inequalities we've already seen, and could have serious political consequences in the medium term, but short term, one bunch of people are going to experience extreme financial hardship, and another bunch of people are going ride it out, or even feel richer while it happens. That's just the way it is. That's why I think the housing market is too tough to call, and only a general recession (if one happens in the near term) is likely to significantly change the outlook for HPI. Quote Link to comment Share on other sites More sharing options...
Greater Fool Posted March 30, 2022 Share Posted March 30, 2022 People buying 9 or 10 year old cars for what they would have paid for a 5 year old model 18 months ago. Looks like decent second hand cars are going to be the next bubble, priced out of a decent second hand car as well as a house. Also Rolex watches selling for silly money over the retail price. Easy money being channeled to the same outlets. Quote Link to comment Share on other sites More sharing options...
Gurgle Posted March 30, 2022 Share Posted March 30, 2022 12 hours ago, winkie said: ......they might be using the credit card to spend short-term earning points/ cash back/ a period of free interest/ protection...rather than a debit card? That’s why I’m asking. I have credit cards but I never paid a penny of interest on them in my life. So yes, I borrowed money but not because I needed to, rather for the points and protection offered. The stat is only meaningful if there is actual debt (I.e people are not paying those cards off and are incurring increased amount of interest). That’s why I was asking how it was being defined Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted March 30, 2022 Share Posted March 30, 2022 1 hour ago, Gurgle said: That’s why I’m asking. I have credit cards but I never paid a penny of interest on them in my life. So yes, I borrowed money but not because I needed to, rather for the points and protection offered. The stat is only meaningful if there is actual debt (I.e people are not paying those cards off and are incurring increased amount of interest). That’s why I was asking how it was being defined Agreed, I put nearly all my spending on credit cards but just pay them when the bills come in at the end of the month. I only ever used them for actual credit on one or two exceptional occasions when I was much younger and didn't have a decent income and savings and even then had paid them off in a few months. What we need is stats for unpaid CC debt - how high/fast is it piling up? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted March 30, 2022 Share Posted March 30, 2022 16 hours ago, Bear Goggles said: Article in the FT I’m in two minds about this. Sure, it could be people using their credit cards to cover essentials, or it could be people splashing the cash because they feel confident. My anecdotal experience at the moment is the latter, but I’m not really representative. Great news for debt pushers. Ex-banker Sunak is playing a blinder Quote Link to comment Share on other sites More sharing options...
petetong Posted March 30, 2022 Share Posted March 30, 2022 16 hours ago, TheResponsibleHouseBuyer said: Are you also thinking that's where all the furlough money/loans went? House buying and extensions in my locality. Quote Link to comment Share on other sites More sharing options...
wighty Posted March 30, 2022 Share Posted March 30, 2022 People are more financially aware. TV programs like that by Martin Lewis show how to play the system. There's been a spate of long term 0% card deals past few months. Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted March 30, 2022 Share Posted March 30, 2022 3 hours ago, scottbeard said: What economic data looks horrific? What I see is very much a UK of two halves. Yes credit card spending may be increasing, but savings rates remain high - plenty of people are STILL WFH, STILL not taking so many expensive holidays abroad etc. Most people are on a fixed energy deal of some sort. Most people with a mortgage have a 2-5 year fix. So the picture looks rosy for half the country. For the other half it's probably the worst conditions for decades, with fuel bills rocketing etc. Basically if you're a City finance worker you are coining it right now, with your high salary but without so many high costs of living. If you own a City cafe you're screwed because you have half the customers and double the gas bill. It was the best of times, it was the worst of times......... Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted March 30, 2022 Share Posted March 30, 2022 I put all spending on CC and then just clears automatically when due so no interest charged. Worth doing for Section 75 CCA protection and an old habit from interest rates were reasonable. When Igloo went bust I got moved to E.On but the Direct Debit did not. Now I wait to pay them until I get a threat of a £10 late fee and then I pay the two months overdue in one go on my credit card. This adds about £200ish a month to my usual run rate. I think if people are still buying the same stuff and not cutting back then of course their credit card bills would increase. What I'd be looking at is the split between the transactors and the revolvers. One uses CCs like I do and just clears the balance on time, every time. The other juggles the balances around and doesn't clear in full. If the latter are adding to their debt levels then they're in the doodoo. Quote Link to comment Share on other sites More sharing options...
MonsieurCopperCrutch Posted March 30, 2022 Share Posted March 30, 2022 7 hours ago, Jolly Roger said: In many cases the 2008 recessionary period didn't really feel any different to what came before - people still went to work, bought gadgets and cars and went on foreign holidays. What kind of crash would it take for the majority to notice a real decline in living standards, a proper depression? I disagree. 2008 felt different as people were slowly losing their jobs. My department was slowly cut back until mid 2009 when I lost my job. Quote Link to comment Share on other sites More sharing options...
MonsieurCopperCrutch Posted March 30, 2022 Share Posted March 30, 2022 2 hours ago, Tiger131 said: People buying 9 or 10 year old cars for what they would have paid for a 5 year old model 18 months ago. Looks like decent second hand cars are going to be the next bubble, priced out of a decent second hand car as well as a house. Also Rolex watches selling for silly money over the retail price. Easy money being channeled to the same outlets. Looks like you’ve got you Dear Tory Clown Leader to thank for it all. Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted March 30, 2022 Share Posted March 30, 2022 Is there data anywhere of how much of this spending gets paid off before interest is accrued? Quote Link to comment Share on other sites More sharing options...
scottbeard Posted March 30, 2022 Share Posted March 30, 2022 7 hours ago, Jolly Roger said: In many cases the 2008 recessionary period didn't really feel any different to what came before - people still went to work, bought gadgets and cars and went on foreign holidays. What kind of crash would it take for the majority to notice a real decline in living standards, a proper depression? Not that many cases! Where were you at that time? Where I was working we had several people just made redundant overnight and disappear, never to return. Pay rises fell to nil. Only the massive cut in interest rates saved a tidal wave of house repossessions. Quote Link to comment Share on other sites More sharing options...
skinnylattej Posted March 30, 2022 Share Posted March 30, 2022 Like others on this thread, I buy everything I can on my credit card, and it's paid of automatically at the end of each month. CC is much safer than cash or, when purchasing over the internet, a debit card. I'm bring forward planned expenditure on 'big ticket' items as fast as I can, as inflation will take hold, and everything will be more expensive. Recently looked at a replacement car. It was over-priced, so I tried to negotiate a discount, salesman said no discount, 'take it or leave it' as he can sell every car on the forecourt very easily. He also said that they were having trouble getting new cars from Renault and Suzuki. While I was at the dealership, the showroom was very busy. Quote Link to comment Share on other sites More sharing options...
Nick Cash Posted March 30, 2022 Share Posted March 30, 2022 For the first time in 30 years I am changing spending habits. Household income down. Food bills up, heating oil up, diesel up, parents care bills up 8%. We can no longer save. Feels a bit like the early 80s. The crux will be whether there is much unemployment. At the moment those in work are OK. Any lengthy period of unemployment or low paid work will be ruinous for many. Energy price cap fiasco is yet to play out. Quote Link to comment Share on other sites More sharing options...
winkie Posted March 31, 2022 Share Posted March 31, 2022 18 hours ago, Gurgle said: That’s why I’m asking. I have credit cards but I never paid a penny of interest on them in my life. So yes, I borrowed money but not because I needed to, rather for the points and protection offered. The stat is only meaningful if there is actual debt (I.e people are not paying those cards off and are incurring increased amount of interest). That’s why I was asking how it was being defined Be interesting to find out, prehaps a breakdown on borrowing on credit card borrowing amounts against interest rates charged on that borrowing, that should separate the good borrowing with the bad borrowing. It is not only credit cards that if you play your cards wrong you will end up paying up to double or more for all items purchased with them, minimum payment over long periods of time @ 30%, 40% or more Apr. It is also the high rate overdraft charges....can be another very expensive way to buy on credit, payday loans the worse of the lot! Therefore those with the least will pay the most for credit.....a sure way to see the poor will get poorer if take the wrong borrowing action. Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted March 31, 2022 Share Posted March 31, 2022 On 29/03/2022 at 21:39, Mancunian284 said: If retail sales are falling, what’s the credit being spent on? Staying afloat, financially - plugging the gap if you will. Quote Link to comment Share on other sites More sharing options...
byron78 Posted March 31, 2022 Share Posted March 31, 2022 (edited) 21 hours ago, Tiger131 said: People buying 9 or 10 year old cars for what they would have paid for a 5 year old model 18 months ago. Looks like decent second hand cars are going to be the next bubble, priced out of a decent second hand car as well as a house. Also Rolex watches selling for silly money over the retail price. Easy money being channeled to the same outlets. There is a clue as to what is driving prices in here somewhere... Incidentally, I have a 3K Rolex and I think it's a piece of crap. Have a watch drawer with all sorts in actually. Should probably get them valued then! Edited March 31, 2022 by byron78 Quote Link to comment Share on other sites More sharing options...
Greater Fool Posted March 31, 2022 Share Posted March 31, 2022 47 minutes ago, byron78 said: There is a clue as to what is driving prices in here somewhere... Incidentally, I have a 3K Rolex and I think it's a piece of crap. Have a watch drawer with all sorts in actually. Should probably get them valued then! That Rolex will be worth a lot more than 3k, which model is it? Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted March 31, 2022 Author Share Posted March 31, 2022 46 minutes ago, byron78 said: There is a clue as to what is driving prices in here somewhere... Incidentally, I have a 3K Rolex and I think it's a piece of crap. Have a watch drawer with all sorts in actually. Should probably get them valued then! Lack of supply? Presumably that's what driven the secondhand car market so hard. Prices have literally doubled. I've assumed it was a complete drop off of production and sales during covid resulting in not enough 2 - 3 year old cars hitting the market now. Presumably that will pass. Never seen the attraction of expensive watches, or pens for that matter. It's one of those things you have to know about to appreciate. I guess if you own some you know what to look for. Quote Link to comment Share on other sites More sharing options...
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