The Conservative Party

inbetween said:
I had this argument with someone over the weekend. The usual was quoted that we had 15% rates 20 years ago and we were fine but that was 15% based upon what you borrowed 20 years ago which was far less. The maths are pretty simple, 15% rates on a mortgage of £200k is a lot more than 15% rates on a mortgage of £20k... The proportion of income to housing costs has only got worse over the years.

That's what people do not understand where even a 0.5% rate increase at current house prices could put people into hardship. We bought our house 4 years ago, the rate was 0.5% then and we pay £830pm. I dread to think what it'll be when our fix ends in 3 years. No-one is immune because this will impact landlords who need to cover their costs and so rents will go up even more than mortgages.

The BoE are idiotic and completely moronic to raise rates to combat inflation when inflation is being caused by problems outside the UK. We already have the government paying chunks of our energy bills to keep the energy market alive so what's next, the government pays people's mortgages to keep the housing market going???

The thing is a change of government won't help because Labour won't do a single thing about this either, they can put more spending in but that will compound inflation further and their taxation plans aren't exactly investment friendly compared to the Tories so nothing will change. Regardless of government the £ will still be on its arse and inflation will be sky high so at the moment we have no real choice.

What is really needed is a common sense approach or policies that resolve the causes of inflation which is the post-COVID/Brexit supply troubles and the war in Ukraine. We can get our knickers in a twist about tax breaks for millionaires but either way that's irrelevant to the problem of the day. I haven't seen jack all from either party on how they will resolve all of this because the fact is they don't have a clue.
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The BoE has raised rates and will raise rates in the future to make the pound more attractive to investors to arrest its decline. Although a weak currency in theory helps exports, it also makes imports much more expensive which hits consumers and exporters that rely on imported components or raw materials.

Regarding energy bills we should be in a much better position than many of our neighbours in the EU because only half our gas is imported which equates to just 20% of our overall energy. Unfortunately, rather than taking advantage of this by applying a windfall tax to the producers (or by one of a number of other possible measures) our government would prefer to borrow multiple billions at high rates to maintain the excessive profits of these companies, profits that are a result of external factors rather than anything clever they have done themselves.

A change of government would most definitely help because a competent government would ease the concerns of investors which on its own would have a beneficial effect on interest rates which are soaring due as much to perceived risk because of government incompetence as much as the external factors. Starmer has done the right thing over the last 3 years in marginalising the Corbynite faction and making the party not only palatable to the majority of the electorate but palatable to the international investment community.
 
BeerIsTheBest said:
This shithead said that the tax matter for the richest was dropped as it had ‘become a distraction’
A distraction?
It’s gone beyond insulting to anyone with a semblance of intelligence facing impossible financial challenges and who is worried about the countries future.
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Now the distraction has been pushed to one side, can we now look at the real issue of not taxing the big energy providers, leading to huge debts which will now be heaped on public services?
 
feedmpenzaandhewillscore said:
One thing that was concerning yesterday is she kept saying she will learn from this experience. Thanks for using our mortgages, pensions and the money we have in our pockets as an experiment. Sunak told her it would be a disaster back in August, it’s depressing we have to suck it up under this pm for another two years.
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They’re just a pair of incompetents playing at being PM and Chancellor. Over the past week we’ve narrowly avoided a financial meltdown that was wholly unnecessary and self-inflicted, owing to the fact we’ve got a pair of amateurs running the show.

Just look at the timeline.

They were given a set of borrowing projections from the OBR on their first day in the job. That projection would have looked concerning even before any policy measures were factored in, and if those forecasts had been released, markets would have already been concerned by a probably substantial pick up in planned gilt issuance. Remember of course that the fiscal year runs to end-March, and that the BoE had already planned to sell gilts back to the market as well, so the market was already looking at having to buy a lot of gilts in a condensed period. Like any other market, this would have been difficult to absorb without a price adjustment.

The government then announced a very expensive energy price package, which will increase borrowing by an unknown but large number. To an extent, this package may have been anticipated by the market but, again, sentiment around gilts was under pressure.

Ignoring repeated warnings from advisors, Truss and Kwarteng then announced unfunded tax cuts well beyond those signalled in the leadership contest, with a very uneven distribution of gains across the income spectrum compounding the issue. Additional gilt sales of 72bn are announced - close to double the initial requirement planned for the year - but little to no detail is provided as to how this number has been calculated. Kwarteng then aggravates the issue by having an evening drinks reception with a small number of party donors who also happen to be fund managers - all without any Treasury representation present or minutes being taken - while the rest of the market was left blindsided, trying to absorb and appraise a major shift in fiscal policy.

Over the following week, with the pound falling further, gilts collapsing and the mortgage market effectively seizing up, Truss repeatedly pushes back on the suggestion of a statement being released to address market concerns. In fact, she disappears for four days as the losses escalate, and the BoE is eventually forced into intervening in order to avoid a financial collapse that would have required many billions of taxpayer money to repair.

Belatedly, Truss emerges with a disastrous round of interviews across regional radio stations, in which she fails to provide an effective defence of their actions. The government then has a meeting with the OBR - whose forecasts they chose to ignore ahead of the mini-Budget - in order to provide the impression that a full fiscal forecast and new policy framework will be delivered in November.

The OBR commits to providing an initial appraisal of the fiscal impact of the mini Budget on 7 October - information which the market would dearly love to be released - but Truss declares that this forecast will remain confidential and will not be published. Markets naturally assume that this failure to release the OBR forecasts is due to the likely scale of the revisions to the borrowing projections. Speculation builds of impending cuts to government expenditure.

Over the past weekend, Truss declares that she will continue to take unpopular actions if she deems then necessary, and declares that the mini Budget would not be reversed. She fails to respond to questions about spending cuts, and members of her own party openly revolt ahead of the party conference, mindful of the disastrous polling which followed the Chancellor’s tax measures.

Today the Chancellor announces a humiliating u-turn, declaring that the 45p tax cut will in fact be reversed. In itself, this measure only accounts for a small proportion of the planned additional borrowing, and so the fiscal outlook remains of major concern, with little visibility surrounding future gilt issuance due to the decision not to publish the updated OBR forecast.

Incompetent, irresponsible, reckless and totally out of their depth.
 
inbetween said:
I had this argument with someone over the weekend. The usual was quoted that we had 15% rates 20 years ago and we were fine but that was 15% based upon what you borrowed 20 years ago which was far less. The maths are pretty simple, 15% rates on a mortgage of £200k is a lot more than 15% rates on a mortgage of £20k... The proportion of income to housing costs has only got worse over the years.

That's what people do not understand where even a 0.5% rate increase at current house prices could put people into hardship. We bought our house 4 years ago, the rate was 0.5% then and we pay £830pm. I dread to think what it'll be when our fix ends in 3 years. No-one is immune because this will impact landlords who need to cover their costs and so rents will go up even more than mortgages.

The BoE are idiotic and completely moronic to raise rates to combat inflation when inflation is being caused by problems outside the UK. We already have the government paying chunks of our energy bills to keep the energy market alive so what's next, the government pays people's mortgages to keep the housing market going???

The thing is a change of government won't help because Labour won't do a single thing about this either, they can put more spending in but that will compound inflation further and their taxation plans aren't exactly investment friendly compared to the Tories so nothing will change. Regardless of government the £ will still be on its arse and inflation will be sky high so at the moment we have no real choice.

What is really needed is a common sense approach or policies that resolve the causes of inflation which is the post-COVID/Brexit supply troubles and the war in Ukraine. We can get our knickers in a twist about tax breaks for millionaires but either way that's irrelevant to the problem of the day. I haven't seen jack all from either party on how they will resolve all of this because the fact is they don't have a clue.
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Did Labour say that they’d at least put a tax on Energy profits?

To add to the above, there is another element to affordability and that’s the amount of disposable earnings. I read somewhere that we have less than they had back then and that the lack of wage rises is compounding the issue.
 
west didsblue said:
The BoE has raised rates and will raise rates in the future to make the pound more attractive to investors to arrest its decline. Although a weak currency in theory helps exports, it also makes imports much more expensive which hits consumers and exporters that rely on imported components or raw materials.

Regarding energy bills we should be in a much better position than many of our neighbours in the EU because only half our gas is imported which equates to just 20% of our overall energy. Unfortunately, rather than taking advantage of this by applying a windfall tax to the producers (or by one of a number of other possible measures) our government would prefer to borrow multiple billions at high rates to maintain the excessive profits of these companies, profits that are a result of external factors rather than anything clever they have done themselves.

A change of government would most definitely help because a competent government would ease the concerns of investors which on its own would have a beneficial effect on interest rates which are soaring due as much to perceived risk because of government incompetence as much as the external factors. Starmer has done the right thing over the last 3 years in marginalising the Corbynite faction and making the party not only palatable to the majority of the electorate but palatable to the international investment community.
Click to expand...
The £ has been declining for years, not just due to weakening £ but due to the strengthening $. In any event you only have to look at the US to prove that the strength of currency is irrelevant. The US has the same problems that we do with even higher rates. They have massive inflation, big fuel costs etc and yeah the $ is stronger but the US is technically in recession so how has the strength of currency even become relevant?

The UK will follow into recession at the next quarter irrespective of interest rates but higher interest rates will make it harder for people and companies who want to borrow to grow. If that happens then talk of pay rises is completely stupid because how can a shrinking company give an inflationary 5-10% pay rise?

There is also a huge risk at these rate levels that the housing market will collapse and then we're screwed. The idiocy and ignorance of some people who want it to crash is they don't realise that it's their pensions and their savings that will go down with it.

In the wake of increased borrowing costs what will really happen with Labour is to realise their spending choices they'll have no choice but to take the option they aren't telling you about which is to print money. This gives us even more inflation, an even weaker £ and ultimately as I said we'll be in the exact same position.

All of this just proves that monetary controls are irrelevant and there is no silver bullet. However, resolving the problems outside of the money system is key but who is proposing to do it? What is the Labour position on Ukraine or the supply chain issues or European massive inflation? These are critical questions and far more important than today's £>$ exchange rate.
 
They had no choice but to u turn , the chairman said on sky yesterday anyone who didnt vote for it would havd the whip removed , sounds like a decent number were going to rebel and they cant be taking the whip of a large amount of them

Still it gave the rich chance to make money ,mortages to go up for millions of us plebs before they 'listened'
 
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