It’s only taken a day since Sunak’s budget and interest rates are going up!

MolteniArcore

MolteniArcore

Well-known member
Cut from the Tory supporting Times:

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Looks like everyone’s favoutfits Tory has speeded up interest rate increases by 4 months thanks to his strange budget.
 
I would have thought that a slight nudge up in interest rates is probably overdue. It isn't necessarily a bad thing.

Of course if your on the bread line already a small hike in your mortgage could to you over the edge but that's happening anyway with increased fuel costs and the ni hike.

The poor were screwed before the budget and remain so.
 
Inevitable anyway despite his budget. We have had unprecedented low interest rates for a long time. Many people won’t be able to imagine what it was like when base rate was at 15% in 1989 and mortgage rate was nearly 16% pa. That was Thatchers legacy. On the upside you were getting 13% on your savings. Those Pensioners with savings were loving it.
 
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Cardiffdaffs said:
Inevitable anyway despite his budget. We have had unprecedented low interest rates for a long time. Many people won’t be able to imagine what it was like when base rate was at 15% in 1989 and mortgage rate was nearly 16% pa. That was Thatchers legacy. On the upside you were getting 13% on your savings. Those Pensioners with savings were loving it.
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It was inevitable but the point I am making is his budget has sped it up (by 4 months).

1% in May will be a big hit for borrowers.
 
Cardiffdaffs said:
Inevitable anyway despite his budget. We have had unprecedented low interest rates for a long time. Many people won’t be able to imagine what it was like when base rate was at 15% in 1989 and mortgage rate was nearly 16% pa. That was Thatchers legacy. On the upside you were getting 13% on your savings. Those Pensioners with savings were loving it.
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I remember.

My first mortgage and no savings to speak of 😮
 
MolteniArcore said:
It was inevitable but the point I am making is his budget has sped it up (by 4 months).

1% in May will be a big hit for borrowers.
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Most of the salient points of the budget were announced weeks ago and some months ago. My argument is that his address wasnt speeding them up at all but as a result of what has gone on in the economy. I don’t think the Bank of England have any choice putting them up given the inflationary pressures.

Whatever sparked it off, and or when, we can agree on one thing. It’s going to be a very hard winter for borrowers and low income families.
 
I must admit it makes me smile to see rags like the Mail & Express getting their knickers in a twist over a Tory budget, makes a change!
 
MolteniArcore said:
Cut from the Tory supporting Times:

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Looks like everyone’s favoutfits Tory has speeded up interest rate increases by 4 months thanks to his strange budget.
Click to expand...

Stop it!… We’re not supposed to be talking, or even thinking about this. There was a purposefully manufactured distraction to eliminate any talk of the schitt of the unraveling of the budget in less than 3 hours, and the schitt in our waterways and sea. We’re at war with France. Get a grip, man
 
Pak_Doo_Ik said:
Sorry for being stupid but how does a rise on interest rates help stabilise or reduce inflation?
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It stops people going out and spending on possibly unnecessary goods . They cant afford to splash the cash and that takes pressure off inflation
 
Pak_Doo_Ik said:
Sorry for being stupid but how does a rise on interest rates help stabilise or reduce inflation?
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If you take the premise that inflation is bad then simply put by increasing the base interest rate raises the cost of borrowing for commercial banks. ... With more cash held in bank accounts and less being spent, money supply tightens and demand for goods drops. Lower demand for goods should make them cheaper, lowering inflation.
 
Zoophonic said:
If you take the premise that inflation is bad then simply put by increasing the base interest rate raises the cost of borrowing for commercial banks. ... With more cash held in bank accounts and less being spent, money supply tightens and demand for goods drops. Lower demand for goods should make them cheaper, lowering inflation.
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Ah right that makes sense. So when interest rates were at 14/15%, inflation wasn’t an issue cos everyone was skint and had nowt to spend
 
There`s a commonality in this inflation and interest increase lark.....which goes round in cycles...repeating itself
When I bought my first house the interest rate was 5%.
Four years later it was 15.8%
Building-societies were dishing out 110% mortgages.
People were borrowing against their property - despite having negative equity.
It lead to the biggest of financial crisis with people losing their homes.
I`l give you a clue who the Prime-minister was - without mentioning her name or which Party she represented.:( Eventually she got chucked out of Parliament and head of her party by her colleagues.
 
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r00fie1 said:
There`s a commonality in this inflation and interest increase lark.....which goes round in cycles...repeating itself
When I bought my first house the interest rate was 5%.
Four years later it was 15.8%
Building-societies were dishing out 110% mortgages.
People were borrowing against their property - despite having negative equity.
It lead to the biggest of financial crisis with people losing their homes.
I`l give you a clue who the Prime-minister was - without mentioning her name or which Party she represented.:( Eventually she got chucked out of office by her Parliamentary colleagues.
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Greed is good was her ethos and if you didn't like it you were a 'moaning Minnie'
 
Pak_Doo_Ik said:
Ah right that makes sense. So when interest rates were at 14/15%, inflation wasn’t an issue cos everyone was skint and had nowt to spend
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Pretty much but its the theory. I didn't say I Iiked it. That said in 1989 Thatchers Cabinet was in charge of interest rates and not the BofE and they were using interest rate rises to manage the economy in a far more draconian fashion.

It wasnt until Brown came to his first announcement in May 1997 that he transferred power to manage rates from Governments to the Central Bank following the Fed model, that we saw less political influence on the cost of borrowing.
 
A blind man on a galloping horse could have seen inflation coming over the next few months, even years.

Government: ’Lets pay Brithish people more money to produce, pick or transport the goods Johnny Foreigner used to do cheaply’.

Public: 🤔 but won’t that mean the cost of the goods go up so the BRITISH workers are no better off. Also won’t other Johnny Foreigners from outside the EU be tempted by these higher wages, and actually we don’t want these jobs anyway.

Government: ‘ 🤔 it’s up to industries to solve their own problems, it isn’t the Governments job’

And all of a sudden your mortgage rate is 15% - out of interest anyone calculated what their mortgage will cost at 15%, you’re in for a shock.
 
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