For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Ideally you want to stifle luxury spending, the best way is forcing people to save (so that it will enter the system at some time in the future) or think twice. So a mixture of VAT and interest rates should be considered rather than all on interest rates.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Ideally you want to stifle luxury spending, the best way is forcing people to save (so that it will enter the system at some time in the future) or think twice. So a mixture of VAT and interest rates should be considered rather than all on interest rates.
Leave interest rates more or less alone (down from the current) and equip NS&I with the ability to offer ISAs at market leading rates with the annual limit raised from £20,000 to say £50,000 or perhaps more (other financial institutions able to offer the same limits and rates but of course capped at the FSC protection limit.
Reduces spending on luxury goods and fills the government's coffers with cash. Luxury goods manufacturers and retailers would feel the pinch though.
Caveat - I haven't really thought this through so there may be a glaringly obvious flaw in the argument!
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But its literally contributing to the economic issues you mention. If its as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
Early 70's prices were flying up by the day, I think it was about 1971 when my parents were buying a house in Eltham, agreed at £4k which was £150 over the asking price, by the time it came to exchange the seller said £4,500 as that's what he could now get (probably 8 weeks later), so gone up over 10%, my mum pawned her engagement ring!
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
Early 70's prices were flying up by the day, I think it was about 1971 when my parents were buying a house in Eltham, agreed at £4k which was £150 over the asking price, by the time it came to exchange the seller said £4,500 as that's what he could now get (probably 8 weeks later), so gone up over 10%, my mum pawned her engagement ring!
When we brought our house around that time we wrangled a 5.5 times our combined annual wage, funny enough we are just sorting through all the paperwork / deeds etc, we couldn’t afford it. Mind you the price included all the carpets, fixtures and fittings, when we moved in the only new thing we had was the bed, everything else was either included with the house or second hand from relatives.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
Early 70's prices were flying up by the day, I think it was about 1971 when my parents were buying a house in Eltham, agreed at £4k which was £150 over the asking price, by the time it came to exchange the seller said £4,500 as that's what he could now get (probably 8 weeks later), so gone up over 10%, my mum pawned her engagement ring!
When we brought our house around that time we wrangled a 5.5 times our combined annual wage, funny enough we are just sorting through all the paperwork / deeds etc, we couldn’t afford it. Mind you the price included all the carpets, fixtures and fittings, when we moved in the only new thing we had was the bed, everything else was either included with the house or second hand from relatives.
How times changed. We bought our first house in 1985 and all we could get was 2.5x joint on a 95% mortgage.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
Early 70's prices were flying up by the day, I think it was about 1971 when my parents were buying a house in Eltham, agreed at £4k which was £150 over the asking price, by the time it came to exchange the seller said £4,500 as that's what he could now get (probably 8 weeks later), so gone up over 10%, my mum pawned her engagement ring!
When we brought our house around that time we wrangled a 5.5 times our combined annual wage, funny enough we are just sorting through all the paperwork / deeds etc, we couldn’t afford it. Mind you the price included all the carpets, fixtures and fittings, when we moved in the only new thing we had was the bed, everything else was either included with the house or second hand from relatives.
How times changed. We bought our first house in 1985 and all we could get was 2.5x joint on a 95% mortgage.
Yes they certainly do, think ours was just over the 100% mark, so we could afford the carpets, which were a horrible brown, oh we also talked them into leaving the light bulbs.
For me, raising interest rates is a very blunt tool to try and get down inflation, and it seems like we largely only have blunt tools, there is no precise surgery for this, so hear me out, don't let perfect be the enemy of the good.
What would happen, if instead of raising interest rates, governments (not central banks) stated that they were going to raise tax rates, and effectively draw that same amount of money out of the economy, and use it to pay off debt (obviously this only works when you have a massive amount of debt), or spend that money on things which don't increase inflation by much at all (eg long term infrastructure projects).
I know that this isn't a million miles off of the concept of quantitative easing, apart from it actually takes money out of the system as well as reinjecting it (at hopefully a low multiplier, in theory the government would either pay debt or spend the cash in a way that doesn't cause inflation).
I'm guessing it's the difference between "those banks have ruined my life with mortgage rates" Vs the same person saying "the government has ruined my life with high taxes." It would be politically unpalatable. I might be completely missing something though, but my mortgage went up by £500, wouldn't it be better if that instead went on paying down national debt and interest?
But it's not really about collecting cash, it's a very blunt instrument to stop spending at this point. A much simpler way would be VAT, push it up considerable on true luxury items and in 18 month time trickle it back down slowly. That and very small increase in interest rates, they could have capped that out at around 1-1.5%.
No one will lose their home as the cost of a new BMW M5 Sport is now £15k more. But they will as fix rates are getting towards 4x what they were 2 years ago.
Yeah completely agree, the taxation system would be a much better way of doing it (although I am guessing there's a reason we are wrong). I hope it isn't just political difficulty that is preventing it.
Complex isn’t it. The economy can’t afford for hundreds of thousands of people losing their homes, flooding the market with property and crashing house prices across the board with no one able afford to buy them anyway. No idea where this ends. There’s still no sign of food prices stabilising. The cost of a weekly shop is horrendous.
If the house market hadn't been artificially manipulated for years with a shortage of stock, prices wouldn't be so high and people would be able to afford to buy.
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
Yep and if my auntie had bollox she’d be my uncle. We are where we are with the U.K. housing market. Nothing changes that and we have to deal with what’s in front of us.
But it’s literally contributing to the economic issues you mention. If it’s as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
So when exactly did the crazy housing market start causing our problems ? Think you’ll find it was around 1970. Fifty three years. It’s a reality that’s in front of us with the horse long since bolted.
Was it not when buyers were getting 6/7 times their earnings?
Early 70's prices were flying up by the day, I think it was about 1971 when my parents were buying a house in Eltham, agreed at £4k which was £150 over the asking price, by the time it came to exchange the seller said £4,500 as that's what he could now get (probably 8 weeks later), so gone up over 10%, my mum pawned her engagement ring!
When we brought our house around that time we wrangled a 5.5 times our combined annual wage, funny enough we are just sorting through all the paperwork / deeds etc, we couldn’t afford it. Mind you the price included all the carpets, fixtures and fittings, when we moved in the only new thing we had was the bed, everything else was either included with the house or second hand from relatives.
How times changed. We bought our first house in 1985 and all we could get was 2.5x joint on a 95% mortgage.
This is exactly it really. The housing market has had such a demand led stimulus for generations...
If banks went back to those rules, houses would halve in price overnight.
The price of a house is not what someone is prepared to pay for it, it's what a bank is willing to lend against it....
Tip: overspend on the big weekly shop rather than forgetting loads of stuff every week and making trips to your local coop sometimes twice a day to get the bits you forgot like me, an idiot.
I asked the caretaker at my secondary school why we had that horrible, vicious bog roll and he said "because every time parents complain and I hand out soft shitrag, you pricks soak it in water and lob it everywhere" which was fair enough in my book.
I asked the caretaker at my secondary school why we had that horrible, vicious bog roll and he said "because every time parents complain and I hand out soft shitrag, you pricks soak it in water and lob it everywhere" which was fair enough in my book.
Don’t remember ever having to use toilet tissue at St. Austin’s. In fact I rarely ever if at all possible ventured into the toilets at all even for a piss.
Comments
Reduces spending on luxury goods and fills the government's coffers with cash. Luxury goods manufacturers and retailers would feel the pinch though.
Caveat - I haven't really thought this through so there may be a glaringly obvious flaw in the argument!
Food prices won't be dropping, they may stop rising.... but a £1 chocolate bar which is now £1.25, will never be returning to £1.
Most of the financial issues from the last year are down to greed and nothing else.
But its literally contributing to the economic issues you mention. If its as simple as ' just dealing with what's in front of us' you might aswell close the thread and end the discussion.
How times changed. We bought our first house in 1985 and all we could get was 2.5x joint on a 95% mortgage.
If banks went back to those rules, houses would halve in price overnight.
The price of a house is not what someone is prepared to pay for it, it's what a bank is willing to lend against it....
I swear that was the initial cause of the farmers...
That's the one. It was more of a muck-spreader than cleaner-upper.