Bank of England Base rate & other news

[JustKeepSwimming]

I don't think that houses will become more affordable anytime soon. Sure you could have a 40% drop but if rates go up you will still be outside the affordability rate.
But even if you can still afford it, with the cost of electricity, council tax, the amount you are throwing away in interest, you are better buying something in a different country. Move to Asia or S Europe.

Instead of paying 150 on council tax, 200 on electricity on average, most of your mortgage rate on interest you are better saying good-bye to the dream and live like a nomad somewhere else.
A nomad is better than a slave.

That's not how it works. House prices will fall until the monthly payment (capital + interest) becomes affordable.

£250k house with £25k deposit @ 3% = £1,066.98/m

£1,066.98/m @ 6% = £165,000~ + £25k deposit = £190k house

[GigiBronz]

That's not how it works. House prices will fall until the monthly payment (capital + interest) becomes affordable.

£250k house with £25k deposit @ 3% = £1,066.98/m

£1,066.98/m @ 6% = £165,000~ + £25k deposit = £190k house

houses have been unaffordable for a very long time and prices still went up.

If they were previously able to afford £1,066.98/m, now you have to reduce that by 20% because some of the money has to be re-distributed to other needs.

We should start looking at average disposable income, what % goes on other costs for living and then what is saved after rent to be able to afford a £25 deposit.

I think that even with the higher rates most and potentially lower prices, houses would still be equally unaffordable. It does not mean that prices will in the end correct either. China in the previous recession has seen house prices go up while everything else was crumbling.

its back again

it takes only a few braincells to look the information up and see it's not nonsense. And if you've ever worked in FS and understood what is happening, you'd probably understand.
Most of the people in FS are silent or probably too busy fighting for their next bonus or office politics to be able to give their two cents.

[Paddy]

This is a most bizarre situation. The BoE’s excuse for high interest rates just does not add up. Increasing interest rates will not reduce inflation when the cause of inflation is not caused by over consumerism. Inflation is caused by commodity and energy speculation and the government ‘printing’ money to pay interest on their bonds and borrowing.

The effect of current interest rates on consumers and house prices is just a side effect of the government getting out of their own tulip.

[GigiBronz]

This is a most bizarre situation. The BoE’s excuse for high interest rates just does not add up. Increasing interest rates will not reduce inflation when the cause of inflation is not caused by over consumerism. Inflation is caused by commodity and energy speculation and the government ‘printing’ money to pay interest on their bonds and borrowing.

The effect of current interest rates on consumers and house prices is just a side effect of the government getting out of their own tulip.

You do not need to know economics just look at the basic facts in front of you: It's quite obvious actually, 95% of the population buy food from the large supermarkets. They did not see a large increase in disposable income but still prices have doubled for food only in the past 3 years + shrinkflation. Most people only received a 5% salary increase before taxes which is peanuts.

If anyone is wondering where all these mishandled policies will lead? Because it will not solve any of the problems we have, it only accelerates them.

It will lead to this:
"When all else fails, they take you to War" -Gerald Celente

[JustKeepSwimming]

This is a most bizarre situation. The BoE’s excuse for high interest rates just does not add up. Increasing interest rates will not reduce inflation when the cause of inflation is not caused by over consumerism. Inflation is caused by commodity and energy speculation and the government ‘printing’ money to pay interest on their bonds and borrowing.

The effect of current interest rates on consumers and house prices is just a side effect of the government getting out of their own tulip.

BoE has pretty much one goal, maintain 2% inflation and limited tools to do it. Even if interest rates only impact 10% of inflation they are still obliged to act.

I think people underestimate the danger of high inflation. It's more than just cost of living crisis. Its what brings down governments and the rule of law, it was the primary cause of the Nazis.

A great depression is preferable to hyperinflation.

[Fraidycat]

This is a most bizarre situation. The BoE’s excuse for high interest rates just does not add up. Increasing interest rates will not reduce inflation when the cause of inflation is not caused by over consumerism. Inflation is caused by commodity and energy speculation and the government ‘printing’ money to pay interest on their bonds and borrowing.

The underlying cause is not a concern for them. The issue is the proles demanding pay rises. So if inflation does not come down they will increase interest rates until companies go bankrupt and unemployment and redundancies go up, then people will be too afraid to demand pay rises.

[GigiBronz]

The underlying cause is not a concern for them. The issue is the proles demanding pay rises. So if inflation does not come down they will increase interest rates until companies go bankrupt and unemployment and redundancies go up, then people will be too afraid to demand pay rises.

If the proles consumption is disconnected from inflation but inflation is only due to the costs in the supply chains that due to currency debasement and money supply(reckless money printing and throwing it at the top of the pyramid).

How is starving the proles the solution? It won't tame inflation, in any way, we are heading for hyperinflation for certain. You are just creating an oppression mecanism for the proles.
And in the end when the system indeed fails, they will create a new diversion and probably take you to war with another country?

How do not people get this?

[Martin@AS Financial]

UK inflation pressure stays strong despite fall in headline rate

An interesting report from Reuters:

https://www.reuters.com/world/uk/uk-...ly-2023-08-16/

[Zigenare]

UK inflation pressure stays strong despite fall in headline rate

An interesting report from Reuters:

https://www.reuters.com/world/uk/uk-...ly-2023-08-16/

What the BoE doesn't appear to be considering is that people would generally accept greater debt than have their lifestyle curtailed.

[dsc]

Core inflation holding steady at almost 7% is a big concern, more interest rates increases on the horizon which I'm sure will enrage loads of people.