Mexboroseasider
Well-known member
Looks like they’re going up again to curb inflation.
You are correct. Trouble is now, with inflation being driven by world commodity prices, and mortgage borrowing already higher due to the Kwarteng / Truss disaster, putting mortgages up even more will be inflationary.Theory is the more expensive it is to borrow cash the less there is in circulation, which reduces inflation.
That's the theory
Jacob the recliner runs this failed administration for his hedge fundsThe BS's & banks need to stop being so greedy and substantially increase the interest rates for savers. Some have - but most have not, the greedy barstewards
The increase in gas and electricity prices has certainly taken a lot of money out of circulation. The trouble is though it has also pushed prices up. Raising interest rates will do exactly the same. Do we really need both?Theory is the more expensive it is to borrow cash the less there is in circulation, which reduces inflation.
That's the theory
Never !Looks like they’re going up again to curb inflation.
I don’t understand the intricacies of economics, but raising base rate seems to me to be inflationary in itself. Global issues have pushed energy, fuel and food prices up, raising interest rates will increase everything, including mortgages. Surely all this means people will have less disposable income, therefore will buy less, therefore some businesses will fail and we will go into recession. Is that the plan? Will that lead to retailers dropping prices?
That's why official inflation rates aren't a useful measurement of cost of living increases. Added to that, interest rates have been held artificially low for at least three decades. We simply have a situation now where reality, in the form of various global crisis, a broken financial system, decades of wage stagnation, and unsustainable increases in rentier aspects of the economy, have finally come home to roost.I don’t understand the intricacies of economics, but raising base rate seems to me to be inflationary in itself. Global issues have pushed energy, fuel and food prices up, raising interest rates will increase everything, including mortgages. Surely all this means people will have less disposable income, therefore will buy less, therefore some businesses will fail and we will go into recession. Is that the plan? Will that lead to retailers dropping prices?
Because they don't. The basis of economic management is set by thinking established 200 years ago and that was largely set by the principles of economic advantage falling to just a few people. Trying to build or manage an economic system that functions for the masses will not work if its based on traditional orthodoxies.I don't understand how this works - people have more cost of living costs, cut back on spending retail and leisure-wise so businesses go to the wall, homes get repossessed etc. All of this weeks after Lizz was going to spend more to help the economy. What a shambles and it's almost like the people in charge don't understand how it works either.
Alas Mates, that is the aim. Businesses borrow less because of the higher prices. The wealthy who are not dependent on running businesses invest in safer stocks (because of the interest rise). Unfortunately us ordinary people whose earnings are largely spent on everyday living don't have spare cash to invest so instead we pay higher mortgages and higher energy bills. In other words, those who have spare cash benefit, whilst everyone else doesn't.I don’t understand the intricacies of economics, but raising base rate seems to me to be inflationary in itself. Global issues have pushed energy, fuel and food prices up, raising interest rates will increase everything, including mortgages. Surely all this means people will have less disposable income, therefore will buy less, therefore some businesses will fail and we will go into recession. Is that the plan? Will that lead to retailers dropping prices?
"almost" ?I don't understand how this works - people have more cost of living costs, cut back on spending retail and leisure-wise so businesses go to the wall, homes get repossessed etc. All of this weeks after Lizz was going to spend more to help the economy. What a shambles and it's almost like the people in charge don't understand how it works either.
Should we just gloss over the Thatcher plan to smash the Unions and effectively turn the country into Europe's distribution warehouse...Then along comes Brexit.For years, successive governments have encouraged us through the education system... to better ourselves away from manufacturing jobs in favour of higher educational non productive jobs... the leisure industry being one example.
When the shit hits the fan,as it now has.... we still need...
Food
Clothes
Shoes
White goods
Cutlery
Furniture
..... the list goes on and on....
If your economy is based on the manufacture and production of said items you continue to keep people employed and cushioned against the worst.... you reap what you sow.
Nobody should be surprised.
A lot of the manufacturers went aboard because the wages was less and the unions were less powerful.For years, successive governments have encouraged us through the education system... to better ourselves away from manufacturing jobs in favour of higher educational non productive jobs... the leisure industry being one example.
When the shit hits the fan,as it now has.... we still need...
Food
Clothes
Shoes
White goods
Cutlery
Furniture
..... the list goes on and on....
If your economy is based on the manufacture and production of said items you continue to keep people employed and cushioned against the worst.... you reap what you sow.
Nobody should be surprised.
Absolutely not... “for years, successive governments”.... As for Brexit... I agree with Sir Kier.... we get on and make it work.Should we just gloss over the Thatcher plan to smash the Unions and effectively turn the country into Europe's distribution warehouse...Then along comes Brexit.
.....amongst many other reasons..A lot of the manufacturers went aboard because the wages was less and the unions were less powerful.
You are so negative mate. Get your ass into gear and make more money.Normal people with mortgages and families get fucked once again, nice one.
I wasn’t referring to myself, I don’t have a mortgage or any dependants but I know there’ll be hardworking people who are in the shit because of this and there are other people who could do more to help.You are so negative mate. Get your ass into gear and make more money.
It was called offshoring. I call it treachery.A lot of the manufacturers went aboard because the wages was less and the unions were less powerful.
Either that or we think about feeding children, waiting for GP appointments that will never come, keeping elderly relatives warm, helping our children to pay their mortgages.It has to get worse before it gets better. We have to think about the Long-Run.
I'm not advocating that we disregard things at all. Just purely speaking on the topic of interest rates and the economy, the benefits of these higher rates will only be reaped in the long run. It's the job of the government to help us all through the short run.Either that or we think about feeding children, waiting for GP appointments that will never come, keeping elderly relatives warm, helping our children to pay their mortgages.
They are responsible for short, medium and long term.I'm not advocating that we disregard things at all. Just purely speaking on the topic of interest rates and the economy, the benefits of these higher rates will only be reaped in the long run. It's the job of the government to help us all through the short run.