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Just seen on ITV news 2 papers are bitching about the IR squeezing families disposable incomes!!

Jeez!! :rolleyes: and I thought it was high house prices! :blink:

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Just seen on ITV news 2 papers are bitching about the IR squeezing families disposable incomes!!

Jeez!! :rolleyes: and I thought it was high house prices! :blink:

:)

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Interest rates rise to 4.75%

03/08/06

Homeowners are under fresh pressure after a surprise hike in interest rates by the Bank of England added to pain over soaring energy bills.

Just days after the latest price hike from British Gas, the Bank said concerns over inflationary pressures had prompted it to change its base rate for the first time in a year - by a quarter of a percentage point to 4.75%.

For homeowners with an average £80,000 mortgage, the decision is likely to add around £12 a month to repayments. Lenders were reviewing their positions ahead of announcements on mortgage and saving rates in the coming days.

Figures from the Insolvency Service on Friday are expected to show a record 27,000 people went into insolvency between April and the end of June. Earlier, Barclays said bad debt levels at its Barclaycard credit card unit spiralled 37% to £696 million in the first six months of the year.

Industry leaders criticised the move and said the Bank had jumped the gun at a time when many firms were still finding their feet after a prolonged downturn.

The FTSE 100 Index fell by more than 1% as the prospect of higher borrowing costs dealt a blow to business confidence.

Fears that the rate rise could lead to a slowdown in the housing market hit shares in construction and estate agency companies, while a number of retailers were also lower.

Here's the majority of the express story.

They're moaning about an increase which raises the typical mortgage payment by ~5%, but continually drill it into the nation that property price inflation is on the march again, and what fantastic news it is for existing homeowners, but treat FTB's like cannon fodder.

I sincerly hope once the inevitable HPC is upon us, this newspaper gets washed away in the recession :angry:

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The thing is, the media are probably making it worse. Going by events today, you wouldn't blame anyone for thinking interest rates doubled!

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Homeowners are under fresh pressure after a surprise hike in interest rates by the Bank of England

Surprise? - this just shows how unaware the public is of real inflation levels - and how little they care IMO

No wonder the MPC have kept IR on hold for so long and just let inflation climb

Raise IR by 0.25% and the press go ballistic

Raise REAL inflation by 10% and nobody says a thing....

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Surprise? - this just shows how unaware the public is of real inflation levels - and how little they care IMO

No wonder the MPC have kept IR on hold for so long and just let inflation climb

Raise IR by 0.25% and the press go ballistic

Raise REAL inflation by 10% and nobody says a thing....

its like if we were heading towards the end of the world. crazy which is a good thing for ir rise :P economic panic

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its like if we were heading towards the end of the world. crazy which is a good thing for ir rise :P economic panic

Or maybe the panic will help encourage people to tighten their belts and start repaying their debts for fear of future IR rises. If they stop spending then inflation will fall and the BoE won't need to raise rates further. The media furore makes future IR rises less likely.

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The express is leading with a story about the record divorce settlement. The Times is talking about a debt timebomb after the rate increase.

On sky news active, they mention tomorrows headlines.

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Guest muttley

Or maybe the panic will help encourage people to tighten their belts and start repaying their debts for fear of future IR rises. If they stop spending then inflation will fall and the BoE won't need to raise rates further. The media furore makes future IR rises less likely.

If people stop spending, as you say, then IRs will not rise because the economy will be in recession.

All roads lead to Rome,Marcus Licinius Crassus.

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The express is leading with a story about the record divorce settlement. The Times is talking about a debt timebomb after the rate increase.

On sky news active, they mention tomorrows headlines.

There won't be anymore IR rises if the public stops the spending on credit and pushing up real inflation

Will that happen? - probably not - IR are still low and the public have had a taste of living the high life on credit the past few years....

Edited by dnd

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If people stop spending, as you say, then IRs will not rise because the economy will be in recession.

All roads lead to Rome,Marcus Licinius Crassus.

Hopefully they won't stop spending, just ease off a bit... :unsure:

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The public have got used to living in a high inflationary environment over the past few years - will an extra few, now worthless, quid on their mortgages really stop them spending?

I doubt it....

It's the public's lack of awareness of rising prices that's driving inflation up further - the press need to make the public more aware of it IMO - not much chance of that though.... (VI issue)

Edited by dnd

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It's the public's lack of awareness of rising prices that's driving inflation up further - the press need to make the public more aware of it IMO - not much chance of that though.... (VI issue)

Well, they certainly squealed about utility bill increases... and British Gas lost 300,000 customers last year as a result. Seem to remember a lot of stories about petrol prices in the last few months as well. :ph34r:

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Well, they certainly squealed about utility bill increases... and British Gas lost 300,000 customers last year as a result. Seem to remember a lot of stories about petrol prices in the last few months as well. :ph34r:

That's the problem with the press - very simplistic, single issues - inflation is subtle and pervades everthing - not just 'gas' and 'petrol'

IR are far simpler to explain - it's a single figure and it makes your mortgage repayments go up

People are paying out more and more everyday in small ammounts without even realising it - inflation is just too subtle....

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There won't be anymore IR rises if the public stops the spending on credit and pushing up real inflation

Except it's not spending in the UK that's pushing inflation up: it's the global credit bubble. Stagflation here we come.

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Except it's not spending in the UK that's pushing inflation up: it's the global credit bubble. Stagflation here we come.

Huh? - global credit is pushing up UK inflation?

Here's me thinking it's global energy prices filtering through the manufacturing process and into imported goods prices - doh!!!

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Except it's not spending in the UK that's pushing inflation up: it's the global credit bubble. Stagflation here we come.

If that's the case then why would the BoE bother raising rates? They'd only do that if they thought it would control inflation, otherwise they'd just be heaping unecessary pain on the economy.

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Here's me thinking it's global energy prices filtering through the manufacturing process and into imported goods prices - doh!!!

Doh!!! Where the hell do you think the inflation in commodity prices is coming from? We borrow money and send it to the Chinese who buy commodities to make the tat they send back to us.

They'd only do that if they thought it would control inflation, otherwise they'd just be heaping unecessary pain on the economy.

It's called stagflation, and happens when you let inflationary pressures build up for years and then have to raise rates while your economy is declining in order to try to eliminate those pressures. At least the interest rate rises increase the value of the pound and reduce the effective cost of commodities.

Edited by MarkG

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It's called stagflation, and happens when you let inflationary pressures build up for years and then have to raise rates while your economy is declining in order to try to eliminate those pressures. At least the interest rate rises increase the value of the pound and reduce the effective cost of commodities.

...whilst simultaneously plunging us into recession. If the interest rate rises won't control the inflation anyway (because its not domestically driven and can't be controlled by reducing consumer spending) then the BoE will simply concentrate on the stability target instead - probably by switching their focus to core inflation and accepting that the CPI will be out of target range for a while. I think Mervyn King would be happier to explain to the chancellor why he's missed an inflation target than explain why he's plunged the economy into recession...

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Doh!!! Where the hell do you think the inflation in commodity prices is coming from? We borrow money and send it to the Chinese who buy commodities to make the tat they send back to us.

A convoluted way of saying that increased demand from the west for imported goods (fuelled by global credit) has pushed up energy, and ultimately, commodity prices

...but it's not the only reason for rising energy prices - market speculation, capacities...

Edited by dnd

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A convoluted way of saying that increased demand from the west for imported goods (fuelled by global credit) has pushed up energy, and ultimately, commodity prices

...but it's not the only reason for rising energy prices - market speculation, capacities...

...war in the Middle East...

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There won't be anymore IR rises if the public stops the spending on credit and pushing up real inflation

..yes there will!!!!!!

I'm afraid the big picture is more about the global village and less about little britain.

If 3bn indian and chinese people all want cars when they couldn't afford them before it has a F***in WHOPPIN impact on how we live,because we have to buy raw goods at market raet,just like they do.

considering there are only about 600mn people in EU/US who already own cars,that should put things in perspective.

if that doesn't ....ponder on china/india being 1/3 the population of the entire planet.

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  • 335 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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