Off Topic The Politics Thread

[sb_73]

Who's going to fall into poverty over this change? Under what circumstances would this drop in interest rates push someone into poverty?

The only scenario that anyone could come up with is one where a couple with nearly three quarters of a million in a standard savings account earning base rate, and trying to live off just the interest from that very large deposit. Which is not helping the 'poverty' argument much.

Many elderly people have had their income squeezed by low interest rates for years, partially offset by low inflation. Now we have even lower savings income with widely predicted rising inflation. People will get poorer as a result, everyone with savings relatively and for a (hopefully) few it will mean genuine hardship. I've made this point several times. It's not the end of the world but it is a decision based on disregard for people who have done what old fashioned Tories ask and looked after their own finances. The strategy on gilts increases risk for their savings as well.

Believe what you like Chaz, the sun may possibly shine out of Mark Carney's maple leaf shaped arse, but he is a man who has talked about and then put off raising interest rates for years. Very low interest rates give us stagnant economies like Japan's has been for twenty years and like much of Europe's is now.

 

[Stroller]

Many elderly people have had their income squeezed by low interest rates for years, partially offset by low inflation. Now we have even lower savings income with widely predicted rising inflation. People will get poorer as a result, everyone with savings relatively and for a (hopefully) few it will mean genuine hardship. I've made this point several times. It's not the end of the world but it is a decision based on disregard for people who have done what old fashioned Tories ask and looked after their own finances. The strategy on gilts increases risk for their savings as well.

Believe what you like Chaz, the sun may possibly shine out of Mark Carney's maple leaf shaped arse, but he is a man who has talked about and then put off raising interest rates for years. Very low interest rates give us stagnant economies like Japan's has been for twenty years and like much of Europe's is now.

Carney has acted to try to avert a post-referendum (I nearly said post-Brexit) economic downturn, or even recession. We need spending, not saving. Somewhat doubtful whether it will have any significant effect, though. Some might say that the government should be doing the spending.

 

[TootingExcess]

Carney has acted to try to avert a post-referendum (I nearly said post-Brexit) economic downturn, or even recession. We need spending, not saving. Somewhat doubtful whether it will have any significant effect, though. Some might say that the government should be doing the spending.

Yeah that's his plan, there's the risk of stagflation - but the Japanese tried to spend their way out of it with infrastructure builds on low borrowing rates. Which, as you say Strolls, is a Government decision not his.

 

[sb_73]

Carney has acted to try to avert a post-referendum (I nearly said post-Brexit) economic downturn, or even recession. We need spending, not saving. Somewhat doubtful whether it will have any significant effect, though. Some might say that the government should be doing the spending.

I know why they have done it, I just doubt that people already in personal debt should be encouraged to rack up more. The consequences of these decisions are not academic. And it's daft not to combine monetary policy with economic policy, Hammond should have come out with a treasury package backing this up at the same time. Perhaps George was right, an emergency budget was needed.

 

[TheBigDipper]

Who's going to fall into poverty over this change? Under what circumstances would this drop in interest rates push someone into poverty?

The only scenario that anyone could come up with is one where a couple with nearly three quarters of a million in a standard savings account earning base rate, and trying to live off just the interest from that very large deposit. Which is not helping the 'poverty' argument much.

To be fair to my example, it was actually hypothetical and I wasn't making an argument for anything. At the time we were all getting hung up on rates and percentages. I thought using actual cash values might help the discussion. It didn't.

 

[Stroller]

I know why they have done it, I just doubt that people already in personal debt should be encouraged to rack up more. The consequences of these decisions are not academic. And it's daft not to combine monetary policy with economic policy, Hammond should have come out with a treasury package backing this up at the same time. Perhaps George was right, an emergency budget was needed.

I don't think it's so much about personal debt, more about companies borrowing to invest. As I said, something the government should consider.

 

[TheBigDipper]

Carney has done the best he can with the instruments at his disposal. It's the governments job to work out what else needs doing.

Seems to me that reducing the cost of borrowing and increasing the amount of money in the system may not be enough for private businesses to increase investment to kickstart things. I don't see the confidence out there in business land until we resolve the dreaded B-word. What will ordinary people paying mortgages do with the extra £20-30/month they get from any rate cut? How does it help people who don't have mortgages?

Government-led capital investment projects to deliver infrastructure that we need today, like housing, seems an obvious thing to do - but the Conservatives don't want there to be a public housing sector, it seems.

Anyone got any ideas?

 

[sb_73]

Carney has done the best he can with the instruments at his disposal. It's the governments job to work out what else needs doing.

Seems to me that reducing the cost of borrowing and increasing the amount of money in the system may not be enough for private businesses to increase investment to kickstart things. I don't see the confidence out there in business land until we resolve the dreaded B-word. What will ordinary people paying mortgages do with the extra £20-30/month they get from any rate cut? How does it help people who don't have mortgages?

Government-led capital investment projects to deliver infrastructure that we need today, like housing, seems an obvious thing to do - but the Conservatives don't want there to be a public housing sector, it seems.

Anyone got any ideas?

How about some old style Keynesian economics?

 

[Stroller]

How about some old style Keynesian economics?

That's what I was saying.

 

[sb_73]

That's what I was saying.

I know mate. This monetarist fiddling won't help much and we've had a fundamentally (though thankfully not fully) monetarist approach since 1979.

 

[durbar2003]

I'm not upset, just can't understand why someone who was a banker can't understand simple economics. Not even enough to understand that my questions are exactly what this debate centres on.

Maybe it's a good job you're opting out, I'm not sure how much further we can simplify this for you.

How about some old style Keynesian economics?

I don't think followin Kenyas monetary policy is the way to go! ;-)

 

[sb_73]

Blackpool and Brighton and Hove Albion among 198 firms called out for failing to pay minimum wage to some workers. ****ers.

Let's see what the Football League does about that, given that we will be punished for paying people too much.

 

[Uber_Hoop]

Blackpool and Brighton and Hove Albion among 198 firms called out for failing to pay minimum wage to some workers. ****ers.

Let's see what the Football League does about that,Niven that we will be punished for paying people too much.

What, this bloke?

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[sb_73]

What, this bloke?

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The Moons a Balloon mate.

Dave Nellist, Derek Hatton and Peter Taafe all hoping to rejoin Labour if Corbyn is re-elected leaderette. Thus neatly proving Tom Watson's point.

 

[sb_73]

FTSE 100 firms share prices, overall, have performed very well since Brexit. However their collective pension fund deficits have risen by over 150% to £63bn over twelve months, with £17bn of this happening since Brexit. Major cause the collapse in income from bonds, encouraged by the interest rate cut. But the fund managers should have been able to cover this through increased value of foreign assets (of course it doesn't help the British economy if they invest overseas) due to the (increasingly) weak £. Clearly they are not very good fund managers.

 

[Chaz]

The EU Exit has not been triggered, so in effect, the only thing that has so far changed is a slight lessening in uncertainty. Ally this to the Government's declared position - that they will not trigger the exit until the details are all clear - this leads to more confidence and more certainty from the markets than we would have if the people clamouring to trigger Article 50 immediately were listened to.

The fact that the FTSE is doing well is more down to our response and approach post-referendum than anything else, imo. It breeds confidence that a rush to leave the EU would destroy.

 

[sb_73]

The EU Exit has not been triggered, so in effect, the only thing that has so far changed is a slight lessening in uncertainty. Ally this to the Government's declared position - that they will not trigger the exit until the details are all clear - this leads to more confidence and more certainty from the markets than we would have if the people clamouring to trigger Article 50 immediately were listened to.

The fact that the FTSE is doing well is more down to our response and approach post-referendum than anything else, imo. It breeds confidence that a rush to leave the EU would destroy.

The FTSE is doing well because the majority of FTSE companies' profits are made outside the UK, so the fall in sterling has increased their income. In my opinion. What the government has offered so far is nothing, though they may be saying something to business leaders. We physically can't start the Brexit process because we do not have the staff to do it. Interesting side effect of Brexit, we have to build two new bureaucracies in Trade and Brexit departments to escape the bureaucracy in Brussels. I'm enjoying the bitch fest between 'Dr' Fox and Johnson though.

 

[Chaz]

I'm enjoying the bitch fest between 'Dr' Fox and Johnson though.

Not as much as I'm enjoying the hilarious debacle that is today's Labour Party.

 

[loomo]

FTSE 100 firms share prices, overall, have performed very well since Brexit. However their collective pension fund deficits have risen by over 150% to £63bn over twelve months, with £17bn of this happening since Brexit. Major cause the collapse in income from bonds, encouraged by the interest rate cut. But the fund managers should have been able to cover this through increased value of foreign assets (of course it doesn't help the British economy if they invest overseas) due to the (increasingly) weak £. Clearly they are not very good fund managers.

The problem the pension actuaries and trustees have is that they have always been over exposed to bonds/gilts because since they changed how the deficits are calculated they have set strategies to meet the deficit over a period of 10 -15 with added funding. This was perceived as a safer route but in fact they have missed out on real returns. its not the fund managers its the pensions Trustees

 

[sb_73]

The problem the pension actuaries and trustees have is that they have always been over exposed to bonds/gilts because since they changed how the deficits are calculated they have set strategies to meet the deficit over a period of 10 -15 with added funding. This was perceived as a safer route but in fact they have missed out on real returns. its not the fund managers its the pensions Trustees

Cheers Loomo, I didn't realise that.