Interest rates

[The Tall Luthier]

Much more of this Kwasiomics (quasi-economics) we will be looking at (yet) another vote of no confidence in our prime minister in the very near future. Tory MPs never wanted Truss in the first place. Sunak consistently had the Tory MPs vote and only lost to Truss when unelected members of the Tory party were given the final say.

As we know markets (and politics) are all about confidence. My best guess is that when Truss said we will borrow many billions to make rich people richer, against all treasury advice, the markets lost their confidence.

Now the pound has crashed again foreign investors will pile in like it’s the Sale of the Century buying up UK PLC. She will call that a win of course, whilst she lasts.

 

[HowieDog]

Crumbs this is looking really bad, market projected implied BOE base rate above 6% by May 2023 and potential for an emergency MPC meeting this week.

 

[HowieDog]

Will be pressure on mortgage affordability and business lending. Property may be supported by overseas investors looking for bargains though, benefiting from weakness of GBP.

I wonder how many letters have been sent to Graham Brady so far...

 

[HowieDog]

Personally I've never seen the attraction of fixed when there are still good trackers available, with fixed you are making a bet with the bank, odds are usually in bankers favour.

We recently took a mortgage to act as a bridging loan when moving house, base rate + 0.68% with the Skipton no early repayment charges. So ideal to act as a cheap bridging loan.

Everyone's needs/circumstances are different, so many variables. We used a broker to check the market. Used an online one called Trussle.com and was actually pretty impressed with their service.

You pay for certainty.

We knew that at 2.49% over a ten year fixed term we could repay our residential mortgage in full comfortably.

I still remember the horror of a 15.75% mortgage rate on a £40,000 loan: my gross salary was about £11,500.

We fixed in July at 1.66% for ten years. Been looking at the trend in rates for quite a while and back in December when we booked the deal it was pretty clear that rates were going to increase, and that was before Ukraine etc.

 

[sidepod]

That day when we say "F*** this", load the van and drive off into the sunset is getting closer!

 

[Corradobrit]

That day when we say "F*** this", load the van and drive off into the sunset is getting closer!

I did that 30 years ago and never looked back.

 

[The Tall Luthier]

Oh!

 

[Amarillo]

Oh!

Dear!

Conservative MPs were furious with Liz Truss and Kwasi Kwarteng as the pound continued to crash on Monday, with some talking of a new leadership contest and others terrified that replacing her would lead to an early election.

Tory MPs furious with Liz Truss and Kwasi Kwarteng as pound crashes

Backbenchers express concern new leadership team has already lost them the next election

www.theguardian.com

 

[Swiss Cheese]

Property may be supported by overseas investors looking for bargains though, benefiting from weakness of GBP.

I had a property in the UK until mid-last year. Things changed over the 7 years I owned it, and IMO it is now pretty inefficient to buy & sell as a non-resident. Stamp Duty is much higher to buy than domestic buyers (between 12% - 17%), and then capital gains tax kicks in if you make a profit (as high as 28%, but you can deduct the original stamp duty paid I think).
You might get a few very rich buying in the usual selected areas from abroad, but it won't move the dial on the rest of the country I'd speculate. On top of that you've got the possible further swings of the pound (which you can hedge of course), making another layer of cost or risk.

 

[SamSara]

Seriously though, when I was a young man with 3 kids and a mortgage, interest rates were sky high. It was a real challenge. Then as I approached and went into retirement, interest rates were rock bottom due to central bank policies after the 2008 crash. A double whammy on our family finances. Selfish I know, but i’m enjoying the current interest rate rises. Let’s all be honest we knew the quantitive easing would have to be paid back sooner or later.
Until recently none of my children had ever experienced an increase in mortgage rates. I’m pleased they’ve had the foresight to fix their rates for as long as possible.

Enjoy briefly, inflation will decimate savings as we dive into recession. Buy another Cali!

 

[Calimili]

Two things going on
- $ is rising Globally.
- $ is rising against
They both get rolled into one, which is convenient or not depending on your agenda.

$ £ € all worth pretty much the same, makes for easy calculations

 

[Lambeth Cali]

I rang my bank yesterday to switch from tracker to two year fixed at 4.14.
We have a phone appointment for next Wednesday. Still seems available. Hopefully they won’t jump before then!

 

[Calimili]

Crumbs this is looking really bad, market projected implied BOE base rate above 6% by May 2023 and potential for an emergency MPC meeting this week.

Will be pressure on mortgage affordability and business lending. Property may be supported by overseas investors looking for bargains though, benefiting from weakness of GBP.

I wonder how many letters have been sent to Graham Brady so far...

The 6% rate will strenghten the pound unless $ or € will raise rates above that

 

[The Tall Luthier]

“What fixed rate can you get?”
is the new
“What box set are you watching on Netflix?”

Best of luck everyone.

 

[Californication69]

So glad I fixed in May at 2.19% for 5 years.
Then that’s done.

 

[Dave Wickham]

Biggest problem with this country is nobody gives a toss about anything but themselves. We're just a push over. We barely even use our vote FFS! No wonder the governments do whatever they please.

What we need is a bit more of the French style protesting and generally giving a F***!

I couldn't agree more. Greed, greed, unbridled greed has gone us into this mess (thanks Thatcher). Still Truss (thick lizzie) makes Maggie look like a moderate.

 

[sidepod]

Finally Starmer starts to talk sense about energy!
Creating a national energy company with profits reinvested and a sovereign wealth fund.
That’s where it all went wrong when Thatcher stared using the oil revenue to pay the doll, as opposed to the Norwegian example.

 

[soulstyledevon]

Investing in green technology seems a no brainer.
I’m just puzzled why we’re spending £120b+ on a silly train track instead of something such as a tidal pool generator at Swansea or other capital energy projects…

 

[Amarillo]

Investing in green technology seems a no brainer.
I’m just puzzled why we’re spending £120b+ on a silly train track instead of something such as a tidal pool generator at Swansea or other capital energy projects…

The calculation is that the money spent on HS2 will create a greater economic boost than the Swansea Project.

I can’t comment on whether that calculation is right or wrong. But I wouldn’t be surprised if Kwarsi-Truss now cancel HS2 to pay for the 11.1%* cut in taxes for the most wealthy.

*A reduction from 45% tax to 40% tax is an 11.1% slash in the tax rate, not a 5% cut as widely misreported.

 

[GrumpyGranddad]

Investing in green technology seems a no brainer.
I’m just puzzled why we’re spending £120b+ on a silly train track instead of something such as a tidal pool generator at Swansea or other capital energy projects…

Swansea Tidal Pool @soulstyledevon - Apart from the funding issues I believe there was a lot of objections from environmental organisations including the WWF.

 

[GrumpyGranddad]

The calculation is that the money spent on HS2 will create a greater economic boost than the Swansea Project.

I can’t comment on whether that calculation is right or wrong. But I wouldn’t be surprised if Kwarsi-Truss now cancel HS2 to pay for the 11.1%* cut in taxes for the most wealthy.

*A reduction from 45% tax to 40% tax is an 11.1% slash in the tax rate, not a 5% cut as widely misreported.

IMO there’s no way that HS2 will now be cancelled in it’s entirety @Amarillo . Just come and look at the scale of the project already well underway through the Chilterns.

 

[soulstyledevon]

IMO there’s no way that HS2 will now be cancelled in it’s entirety @Amarillo . Just come and look at the scale of the project already well underway through the Chilterns.

I’ve read it would cost £15b to cancel the project at this stage.
To many fingers in the pie who stand to make billions from the project. They had the opportunity to cancel this wasteful project 4 years ago and didn’t.

My wife’s office is in London. Pre-Covid, she would travel down 3/4 days a week.
It’s now once a week at the most…

 

[sidepod]

I see we got a bollocking from the IMF !

 

[Lambeth Cali]

You can’t cancel a fast train to the north to pay for tax cuts for the south. Plus that would be cancelling infrastructure spending for unfunded tax giveaways. There’s not an economist in the world that would recommend that.

They might aswell hand Keir the keys to No10.

 

[subthree]

Investing in green technology seems a no brainer.
I’m just puzzled why we’re spending £120b+ on a silly train track instead of something such as a tidal pool generator at Swansea or other capital energy projects…

The previous owners of our house installed 19 PV panels and 3 solar thermal panels. The PV consistently produces 3,300kWh of electricity per annum, about 75% of our annual consumption. Even today, clear skies but not hot, the solar thermal will have the water coming off the roof at 50-60 degrees and will probably heat most of the hot water tank.

Why are we not having a national scheme to install these technologies across the country? Even if the government paid for them - we ultimately pay, but most people think if the government pays it is free!