Grendel
Well-Known Member
No I’m not I’m saying it’s a likely outcome
So In 2019 you admit we should have voted for Boris Johnson? Good stuff.
Do you want to discuss boring politics? (221 Viewers)
- Thread starter mrtrench
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No I’m not I’m saying it’s a likely outcome
So In 2019 you admit we should have voted for Boris Johnson? Good stuff.
David O'Day
Well-Known Member
You seem to have missed the without support for those effected part of what I said.
Rate hikes are pretty much the only monetary policy the BoE can take but there needs to be support as well so people don't lose their homes.
It's worrying now even though food inflation etc is starting to go down underlying inflation is heading in the wrong direction.
duffer
Well-Known Member
It's the old, if the only tool you've got is a hammer, every problem looks like a nail, thing.
If the government really wants to take money out of the economy then I suspect there are fairer and quicker mechanisms than raising interest rates (which have an inbuilt lag on inflation reduction anyway, I believe).
Maybe a penny or two on the higher rates of income tax, higher VAT on non-essential items, government backed high interest rate savings accounts.
A quicker way to drive down cost-push inflation, which is really where this started, might be price control on utilities - those who can't bear to see their dividends cut if profits are reduced can always hand their business back to the country.
All mho of course, but there has to be a better way than simply driving the country back into recession and austerity.
David O'Day
Well-Known Member
yes, there are fiscal methods that can and should be looked at but the government don't want to do this as they seem to think it would be a sign od economic weakness.
the BoE can only effect monetary policy so in the absence of any fiscal action they are going to take action like this. it's their remit
shmmeee
Well-Known Member
Probably if you didn’t want Corbyn. I’m assuming FP doesn’t want Sunak but who knows?
shmmeee
Well-Known Member
Sunak is allergic to raising taxes though, and even if he wasn’t the backbenchers would eat him alive.
But yeah, would be better to target restrictions on those who can afford it rather than making average wage people lose their house.
Grendel
Well-Known Member
he has raised taxes
I could imagine the national uproar if he raised personal taxes in the middle of a cost of living crisis though ! Remember after NI was rightly increased to pay for social care.
Agree with Duffer that the problem with rate rises is the lag. It’s not just aimed at mortgages though, it businesses and people looking to borrow etc. It should ultimately cool the economy, however, I personally think they’ve ended up going too far now due to them trying to make up for previous mistakes and raising rates too slowly to begin with
It’s national bank group think. They’ve all edged up even though our inflation is different to USAs inflation. We know there’s a lag so they should’ve raised rates higher more quickly (front load) ? On top of the fact that they shouldn’t have carried on printing during and after a supply side shock (pandemic/ lockdowns) and should’ve raised rates/stopped QE sooner. Andy Haldine (former chief economist at BoE) advised this back in June 2021 !
Edit - central banks not national banks
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skybluetony176
Well-Known Member
The interest rate hike (and probably the previous 12) just seem like an overreaction to me. Low interest rates didn’t drive inflation and I struggle to se what impact raising the interest rates has had on reducing it. Seems to me it’s a combination of the B word, the war in Ukraine and the echoes of the pandemic all turbo charged the ridiculous Truss and Kwasi era that are driving it not people having too much money to spank because they’re being paid too much. I don’t know anyone who wasn’t cutting back prior to Trussonomics. I don’t know anyone who’s not had real term pay cuts over the last couple of years. I know plenty of people who saved during 2020 but are now giving their savings away corporations registering record profits to have some resemblance of living the life they have become accustomed too full of luxuries like eating, heating and wearing clothes.
As one pundit put it, what does the Bank of England expect to achieve that it didn’t achieve the previous 12 times. Then there’s the issue of debt, it’s now over 100% of the country’s GDP. People will and have said it doesn’t matter. Okay, let’s put our rising debt to GDP into some sort of context we’re not that far behind where Greece was in 2008, within a year it was 127%, currently it’s about 175%. Yes yes I know Japan is 225% but our economy is nearer in makeup to Greece than Japan. I think we’re so close to doing a Greece it’s not funny, we’re un-investable especially to our traditional trading partners in the EU (big story in Germany today) which has a knock on effect to how the rest of the world sees us.
The government needs to make the country attractive to invest to stimulate the economy. Interest rate rises isn’t going to do that, not for the average man in the street. The richest will of course get richer, they always do, as we witnessed in the pandemic, especially with a compliant government, which they have.
As one pundit put it, what does the Bank of England expect to achieve that it didn’t achieve the previous 12 times. Then there’s the issue of debt, it’s now over 100% of the country’s GDP. People will and have said it doesn’t matter. Okay, let’s put our rising debt to GDP into some sort of context we’re not that far behind where Greece was in 2008, within a year it was 127%, currently it’s about 175%. Yes yes I know Japan is 225% but our economy is nearer in makeup to Greece than Japan. I think we’re so close to doing a Greece it’s not funny, we’re un-investable especially to our traditional trading partners in the EU (big story in Germany today) which has a knock on effect to how the rest of the world sees us.
The government needs to make the country attractive to invest to stimulate the economy. Interest rate rises isn’t going to do that, not for the average man in the street. The richest will of course get richer, they always do, as we witnessed in the pandemic, especially with a compliant government, which they have.
shmmeee
Well-Known Member
I think it’s madness we tie mortgage rates to BoE base rate TBH. It’s just for the benefit of the banks. Offer state backed 30 year fixed rate mortgages and watch them fly off the shelves and suddenly you’ve not got a random inflation tax that leaves the wealthy alone.
skybluetony176
Well-Known Member
There was nothing right about that at all. The only reason it was broken was because of the failed Tory policy of austerity, Boris was then elected on a manifesto that had a plan (allegedly) to fix it hand in hand with a pledge to not raise taxes or NI.
We need more cash for social care as we’re living longer, ultimately this should probably come from either income tax or NI. I think NI gets capped in which case they should amend this. Nobody wants to make tough decisions anymore so we just constantly kick the can
skybluetony176
Well-Known Member
I wonder how many top rate income tax earners would take an income tax rise vs more increases in the interest rate? There’s a misconception that all top income rate tax payers are gazillionaires so somehow immune (in context average earners) to interest rate hikes. Not true in many possibly the majority of cases, there’s no shortage of stories flying around about high earners struggling/failing to meet their mortgage obligations because they’re mortgaged up to the hilt like most working people. A tax rise might be more acceptable hit to many compared to interest rates going up and up. Probably benefit the government and wider economy more too.
skybluetony176
Well-Known Member
But that wasn’t the platform they were elected on, they had a costed plan apparently.
They could’ve justifiably argued post pandemic they needed to break certain commitments/promises. I personally didn’t think they should’ve had that in their manifiesto, however, they bottled it after May fucked the previous election. At least she was honest with the electorate about the problem and tried to provide a solution (the maturely renamed dementia tax) however unpalatable it might be for some.
We live in a country where most people just aren’t willing to pay more tax though, even if it’s for the greater good
D
Deleted member 5849
Guest
That's been a cultural shift over a (relatively!) recent period, though. Two world wars focussed peoples' minds over what was important, then we had a shift with no such thing as society etc.
clint van damme
Well-Known Member
Haha!!
Sky Blue Pete
Well-Known Member
So hard not to just shout racists to the first 2 cos that’s what they are
skybluetony176
Well-Known Member
Clearly the bloke who did the flashing around my chimney about 10 years ago must have been French or German. I didn’t detect an accent but having heard the evidence it’s the only possible explanation.
skybluetony176
Well-Known Member
Kin’ell. Must be a windup
fernandopartridge
Well-Known Member
Indeed, fuck them. If they are intending on "improving the economy" I'm sure reducing the spending power of millions of people is the right way to go about it.
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fernandopartridge
Well-Known Member
Spot the difference
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Grendel
Well-Known Member
Nandy was on the Keunsberg show this morning and admitted she thought that the interest rise was the right thing to do to stem inflation - it’s strange for an opposition whose clearly going to win to not have alternate and at least a bit radical outlook
chiefdave
Well-Known Member
It’s an odd strategy to piss off huge chunks of your core vote while saying you would do nothing different to the current disaster of a government
David O'Day
Well-Known Member
The real story is different to what that tweet says. No one has said they will not give 6.5% or any other % increase. All they have said is that they will not just automatically rubbered stamp anything which is fair to me.
But that's a not a snappy tweet
But it's pointless arguing with the morons who are so entrenched in their views they will post tweets without actually looking into the full story
chiefdave
Well-Known Member
Doesn’t exactly sound like a resounding yes to me
Ian1779
Well-Known Member
It’s not though is it. Teachers pay has gone down in real terms for years and years.
Now they say they won’t even sign off on an independent body’s recommendation (which is again way below any kind of real terms pay rise)
But it’s us that are the problem - maybe time to face facts that you’ve gone all in on a clown and stop embarrassing yourself trying to defend him.
fernandopartridge
Well-Known Member
All she had to say was that she'd accept an independent pay review body, she didn't. She said exactly the same thing that Sunak did.
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shmmeee
Well-Known Member
Not sure why it’s even a political decision TBH. Should just be for a review body and the unions to thrash out. Isn’t that what Labour want in other sectors?
labour.org.uk
Kickstart economic growth – The Labour Party
A Labour government will deliver economic stability with tough spending rules, boost growth, build 1.5 million new homes and create jobs.
labour.org.uk
clint van damme
Well-Known Member
Not if they don't intend actually changing anything.
Sky Blue Pete
Well-Known Member
Course they want to change things bloody hell
clint van damme
Well-Known Member
No opposition has ever had such an opportunity to propose and implement radical change, they're proposing moving the dial a notch, its pathetic.