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Not the Budget

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  1. chdot
    Admin

    “It's only the unfairness of the higher rate changes that have people backs up.“

    That’s true to an extent, but can’t explain why money market traders - people more likely than most to benefit - reacted so strongly.

    Partly because they could - and make money doing it - also to show the Gov how things really work.

    But also, having seen the fuss about ‘borrowing money to give to the rich’ actually made them do the sums and conclude that neither the ‘new’ Gov nor the UK are actually in a good place.

    To be continued - for the next 5 years at least.

    Posted 4 months ago #
  2. Baldcyclist
    Member

    "neither the ‘new’ Gov nor the UK are actually in a good place"

    The global economy is in the toilet, every nation is over borrowed. The markets know this, which is why they are risk off and down 20% + since Nov. The UK economy is in no better or worse state than any other, everyone will feel pain for next 18 months.

    I keep going back to 2008, all of this has its roots there, though the UK moment might be the final unwinding trigger.

    Posted 4 months ago #
  3. chdot
    Admin

    2008 was a worldwide problem essentially starting in the US - convenient for some to blame Lab. I have no idea whether Brown/Darling did well, badly, or so so, but I’m quite sure the current UK problems are due to last week’s *special event*.

    Whether it would have happened anyway, next week, next year or unknown, is largely unknowable.

    If you have an ‘average’ mortgage or are looking forward to a ‘reasonable’ pension the prospects are not great. Many others have an even worse look-out.

    I suspect a lot of people are going to be disappointed that Saturday’s ‘energy price cap’ will not keep costs down as much as they expect.

    Hard Times. I’m sure some people are planning books.

    Looking forward to the trickle down. Might have to wait until November to find out how it’s going to work…

    Posted 4 months ago #
  4. Baldcyclist
    Member

    Nicola Sturgeon on the news calling for the higher rate cut to be rolled back, linking that to the turmoil. Kier Starmer also on news saying he'd vote for most of it. Higher rate, and penny off income tax he doesn't agree with.

    Andrew Neil on twitter saying the 1p drop 'and promise of more to come' was what spooked markets. Again saying the rest of it was largely expected.

    Of course the govt will say the tax cuts will create more growth, course they would, only time will tell.

    Everybody moaning about interest rates, however they were always going up, it's why we fixed for 10 years, 18 months ago. Can't get a 10 year deal now, and interestingly the 5 year deals seem to be cheaper than the 2 year deals today, perhaps indicates temporary problem?

    Posted 4 months ago #
  5. toomanybikes
    Member

    "they were always going up" if it was that obvious the market on bonds wouldn't have moved so much this week. Definitely unexpected in scale and not even guaranteed in direction.

    Posted 4 months ago #
  6. chdot
    Admin

    “perhaps indicates temporary problem?”

    Not as such.

    NO-ONE knows what interest rates, fuel, food, etc prices will be next month/year/decade.

    Banking/finance/insurance/pension industries ‘rely’ on (more or less) ‘more of the same’ like life expectancy and inflation rates while trying to allow for ‘global warming’ and oil prices etc., then deciding how safe to play.

    A ten year mortgage is likely to be more than covered by a ten year bond costing less than the mortgage payer will be paying.

    At the moment, with things in flux, mortgages are harder to get. This will likely last until December.

    And then?

    Slightly lower house prices, more cash buyers - downsizers and landlords.

    More people unable to afford higher mortgages and almost certainly higher rents.

    It’s the free market…

    Posted 4 months ago #
  7. chdot
    Admin

    Graham Cox, director of the firm Self Employed Mortgage Hub, said: “Unless we are very lucky and inflation falls much more quickly than predicted, I don’t see any other outcome than a sizeable fall in house prices – possibly 20%-plus over the next two to three years. I’ll be accused of being a doom-monger, but if you use simple maths and common sense, how can house prices not fall? A lack of housing supply won’t help one iota when mortgage rates are somewhere between 5% and 7%.” He claimed that “the decade-long property bubble is about to burst … It’s a buyer’s market now.”

    https://www.theguardian.com/money/2022/sep/28/uk-house-prices-may-fall-20-amid-mortgage-carnage-warn-experts

    Back to negative equity misery.

    Posted 4 months ago #
  8. Baldcyclist
    Member

    Watched an interesting video a few weeks ago, mortgage market has been under stress for a quite a while already as energy price increases reduced the average persons affordability by £90K, and banks were taking that, as well as inflation on food etc into their affordability calculations. Prices already showing some signs of weakness due to this, and properties on the market longer than in the summer.
    I'm a perma bear though so have expected turmoil for a while.

    Posted 4 months ago #
  9. chdot
    Admin

    Don’t forget…

    Daniel Hannan: No, the pound isn’t crashing over a trifling batch of tax cuts. It’s because the markets are terrified of Starmer.

    https://conservativehome.com/2022/09/28/daniel-hannan-no-the-pound-isnt-crashing-because-of-a-trifling-batch-of-tax-cuts/

    Posted 4 months ago #
  10. Morningsider
    Member

    Daniel Hannan - somehow proving that certain stopped clocks aren't right twice a day.

    Posted 4 months ago #
  11. chdot
    Admin

    In a reversal of a policy position announced on the day before Kwarteng’s fiscal event, the Bank said it was setting aside £65bn to buy bonds over the next 13 working days to ease pressure on pension funds and insurance companies.

    https://www.theguardian.com/business/2022/sep/28/bank-of-england-in-65bn-scramble-to-avert-financial-crisis

    Posted 4 months ago #
  12. chdot
    Admin

    08.13

    Truss says she has to do 'what I believe is right' when asked about criticism of mini-budget

    https://www.theguardian.com/politics/live/2022/sep/29/liz-truss-kwasi-kwarteng-mini-budget-sterling-crisis-economy-conservatives-uk-politics-live-updates

    Posted 4 months ago #
  13. Baldcyclist
    Member

    If you like to geek out...

    They Used To Say the Sun Never Sets on the British Empire

    [+] Embed the video | Video DownloadGet the Video Player

    Posted 4 months ago #
  14. chdot
    Admin

  15. Yodhrin
    Member

    "Conservatives could collapse within weeks" sounds like wishful thinking tbh. How's that going to happen? She won't go for an election, she's "prepared to be unpopular" but only because she's actually delusional enough to believe her plans will bear fruit before the next election. Even if Starmer has the guts to call for a vote of no confidence which is by no means a guarantee, you'll never get enough Tories to vote for it when Labour are almost 20 points up in the polls. She's safe from a leadership challenge for at least 12 months unless they change their rules again, and they'll only do that if there's evidence of overwhelming demand from MPs to sack her, which there isn't because they know the party is already a punchline over their top job having a revolving door attached and because they know starting a battle with their own membership - who for some mad reason chose Truss - right before they inevitably have to call an election(whoever replaced her would have a mandate thinner than cheap bogroll) would be mad.

    Either she'll "reflect", sack some random underling, and delay the more unpopular unfunded measures for a few months, then we'll spend the next two years with the leaders of both the government and the opposition staring at each other and desperately hoping some random event comes along that makes one look worse than the other; or she'll stick her fingers in her ears and push on, her backbenchers will make trouble for her without going so far as to actually endanger the government, and she'll spend the next two years as a lame duck hoping the billionaire media can gaslight people into believing the City making a fortune betting pension funds will collapse is somehow a good thing.

    EDIT: 30 points ahead now in some polls. No chance the Tories will let an election happen.

    Posted 4 months ago #
  16. chdot
    Admin

    The latest snapshot from the building society Nationwide comes at the end of a torrid week for the housing industry as lenders pulled 40% of available mortgages from the market after Kwasi Kwarteng’s mini-budget last Friday

    https://www.theguardian.com/business/2022/sep/30/uk-house-price-growth-flatlines-as-mortgage-rates-rise-says-nationwide

    Posted 4 months ago #
  17. chdot
    Admin

    1h ago

    09.49 BST

    Britain should prepare for new age of austerity, warns Simon Clarke
    Simon Clarke, the levelling up minister and a key Liz Truss ally, has told the Times that the market chaos that followed the government’s tax cutting mini-budget would pass and warned that Britain should prepare for a new age of austerity.

    He also said the prime minister was “enjoying having the chance” to enact policies that “she believes is right”.

    Despite the turmoil in financial markets, Clarke said that Truss was “astonishingly resilient” and urged the government to channel the spirit of Margaret Thatcher to push ahead with their vision.

    https://www.theguardian.com/politics/live/2022/oct/01/kwasi-kwarteng-liz-truss-uk-economy-politics-latest-news?page=with:block-6337fc9c8f086bb4a78ec47e#block-6337fc9c8f086bb4a78ec47e

    Posted 3 months ago #
  18. LaidBack
    Member

    U-turn on making rich people richer. I expect a convey of Porsches on M25 in protest... = business as usual.

    Alistair Jack will now be able to afford to stay in the country he loves along with QC Roddy Dunlop.

    Meanwhile our business lost money on transactions and new customers will be too worried about how to pay their mortgage or rent (although rent rises are held till March next year).

    What a complete and utter piece of financial terrorism. They're going for ground zero.

    Posted 3 months ago #
  19. chdot
    Admin

    Liz Truss packed her cabinet with “cronies off the backbenches” rather than competent ministers with a range of views, and appeared to have no coherent plan behind her mini-budget, Michael Heseltine has said.

    The ex-deputy prime minister and former senior Conservative, who sits in the Lords as an unaffiliated peer after being suspended from the party in 2019, also predicted that Truss’s chances of winning the next election were “looking pretty bleak”.

    Speaking at a fringe event on Monday at the Conservative conference in Birmingham, Heseltine said the prime minister’s plan for rapid economic growth would never work, castigating what he said was a curse of short-termism.

    https://www.theguardian.com/politics/2022/oct/03/liz-truss-picked-cronies-off-backbenches-for-cabinet-says-michael-heseltine

    Posted 3 months ago #
  20. LaidBack
    Member

    Biased Broadcasting Co have had to borrow footage from Peter Macmahon ITV Border in Carlisle. Maybe BBC in Glasgow here was too busy protecting Douglas Ross? #In a state media.
    Colin Mackay @STV has also shown that he can find out what's happening in the northern territories!

    https://twitter.com/GlennBBC/status/1576865485718593536?t=n8j4hwZ3cTZXgWKYjvR8ug&s=19

    BBC thought that the massed ranks of southern media would ensure FM folded on progressive tax question? (Labour/SNP/Green policy).

    Time we had mass media to reflect politics here? Accept that 50% of people will disagree at moment until they find that the trusted channels can't handle our politics fairly. I don't want to live in a one party state btw but until we get proper alliances our future will be doomed to be a footnote of Britiannia Unhinged.

    Posted 3 months ago #
  21. Baldcyclist
    Member

    As predicted above Sterling has recovered, as have all other currencies against the $. The DXY had topped (for now) as the chart suggested it had.

    Might get a reversal at some point in a month or two once the market decides it wants $s again, but for now DXY on its way down.

    The £2bn higher rate tax gamble a side show really. And actually the market wants higher rate reduced, just not right now.

    Rising interest rates, and a society that is over leveraged is more of a concern for the market, cue house price collapse back to the long term average of 3X earnings. Though the Bank has already indicated at the slightest sneeze that it will print again, must protect those house prices, our economy is over dependent on them...

    Posted 3 months ago #
  22. LaidBack
    Member

    @Baldcyclist - Rising interest rates, and a society that is over leveraged is more of a concern for the market,

    You're right of course. People's income goes back out the door on a never never land of standing orders for items they can't afford to buy outright. Argument was that in many places rented property was the norm - not just for 'social housing' but across society.
    Now an ageing house gathers value in a way no other older thing could.

    I use my credit card to buy groceries- going to try to stop! Take more money out of bike business.

    Energy Saving Trust still offer interest free credit to customers over term of 4 years. So we benefit in one way but of course deliver VAT back the other way to help Kwasi Kwarteng balance his books!

    Posted 3 months ago #
  23. Baldcyclist
    Member

    More impactfull is the market thinks, and there are rumours abound that Credit Suisse, and perhaps also Deutsche Bank could fail.

    True, or likely or not, the jitters are everywhere...
    https://www.ft.com/content/8e6e7255-ca94-4a82-8ca8-20fc25ef3785

    Posted 3 months ago #
  24. ejstubbs
    Member

    Argument was that in many places rented property was the norm - not just for 'social housing' but across society.

    Which is true e.g. in a lot of continental Europe, but in most of those places the rental market is significantly different to the UK: longer, assured tenancies; no eviction/lease being terminated without good reason; and greater prevalence of unfurnished rentals. This gives renters much greater stability and allows them to make the property more like a home with their own furniture and (within the terms of the lease) fittings. (Actually, a good number of the middle class families who rent flats in town do actually own or have access to a property out in the country somewhere, often an ancestral home rather than a "holiday cottage" as we tend to think of them.)

    Anyway, what happened to Thatcher's dream of a "property owning democracy"?

    I use my credit card to buy groceries- going to try to stop!

    Nothing wrong with doing that IMO (it's what I do), so long as you have a DD in place to pay it off every month (as I do*). If you can't pay it off before it starts accruing interest then credit card debt is pretty much the most expensive kind (except see below) and to be avoided at all costs. For purchases that you know you won't be able to pay off within ~six weeks then a personal loan, or better still a 0% credit card, is much cheaper.

    So we benefit in one way but of course deliver VAT back the other way to help Kwasi Kwarteng balance his books!

    You'd pay VAT whichever way you chose to finance the job.

    P.S. Thanks for the reminder about the Energy Saving Trust. Can't immediately see anything on their web site about interest free loans, though - am I missing something?

    * Because I get better perks - points/cashback - on my CC than I do on my debit card. Also, it doesn't hurt to have a history of reliably paying off CC debt on time.

    Posted 3 months ago #
  25. Yodhrin
    Member

    @ejstubbs https://energysavingtrust.org.uk/grants-and-loans/ebike-loan/

    I took advantage to get my Gazelle, best to apply as close to the start of a new financial year as possible as the fund is finite in each.

    Posted 3 months ago #
  26. Morningsider
    Member

    @ejstubbs - You can find info here:

    https://www.homeenergyscotland.org/find-funding-grants-and-loans/interest-free-loans/

    A word of warning, Home Energy Scotland can truly claim to be world leaders in pointless bureaucracy. It's actually quite something to behold.

    I don't want to spoil the fun, but it starts with having to complete a lengthy telephone interview (after a while on hold), only to be emailed a link to a web form where you get to input all the same information...

    Posted 3 months ago #
  27. LaidBack
    Member

    End of another VAT quarter which is not so daunting with Fountainbridge HQ'd FreeAgent.

    So catching up... yes... providing quotes for EST a big part of LB although as @Morningsider says it's 'a process'!
    Only ever had one turned down until yesterday when a UA buyer and a Nihola Cargo trike applicant got refused on same day. Fixed though as the 500Wh battery size had been confused with 250W motor. Got lots of different people handling so they may not know e-bikes as just money to allocate on various stuff.

    Some applicants have been sorted inside 2 weeks. Others 6 weeks.
    Again like the car industry this bit of finance adds to people's monthly outgoings. Unlike car loans generally smaller and once you have the running costs are lower.
    Beside every mortgaged house there's a car loan etc...

    Do clear card every month but think I need to have one less card. Both bike and graphics have credit cards although these have auto deduct.
    Overdrafts also needed when required etc.

    Posted 3 months ago #
  28. chdot
    Admin

    EXCLUSIVE:

    I'm told that Kwasi Kwarteng is being sacked as Chancellor as Liz Truss prepares to reverse the mini-Budget

    Not clear who will be replacing him

    Events moving very, very quickly this morning

    No 10 not commenting

    https://mobile.twitter.com/steven_swinford/status/1580868139692134400?

    Posted 3 months ago #
  29. chdot
    Admin

    New C is Hunt.

    Posted 3 months ago #
  30. chdot
    Admin


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