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Does "will not hesitate" mean something different when economists/bankers use it? The BoE says it will not hesitate to intervene if there's a run on the £...
... in November. ;)
£1 = $1.066 this morning, when I sent money to my son in US in Aug it was $1.19, in May it was $1.28
If the state of our government was a soap opera I'd sit back and say: "Pass the popcorn, it's about to get interesting". Unfortunately this affects us all.
Today, the IMF said in round about terms: WTF are you doing UK? Maybe the Chancellor should listen?
garynortheast
28-09-22, 08:16 AM
The tories have truss in place and know they are going to be out of government (if "government" is how you can describe what they are doing) before much longer, so they are just asset stripping now.
Although, if they carry on down the current fascism inspired path, they may be about for a lot longer. Witness Truss congratulating the new fascist leader in Italy. I seem to recall Italy's last dabble with fascist government didn't end well.
its not the gov's fault its the boe brexit and covid but mainly covid suppose you could add in putin.
when a gov gives free money away to its working population there is something wrong. they have been doing it since working tax credits and such like and they still continue to do so.
its not the gov's fault
https://www.bloomberg.com/news/articles/2022-09-27/uk-markets-have-lost-500-billion-since-truss-took-over?utm_campaign=socialflow-organic&utm_content=bloomberguk&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-bloomberguk
tldr: UK markets have lost $500 billion since Truss took over
makes the £32 billion of Test and Trace a bargain.
Yesterday's Daily Star wins the headlines competition:
https://i.ibb.co/JynnMc1/quids.png
The whole shooting match is just monumentally screwed up.
The idea that the BoE is responsible for controlling inflation when it only has one tool in the box, and that's totally the wrong tool for this particular case, is utterly stupid. Raising interest rates suppresses demand, but this is a supply side driven inflation situation, it just costs more to make and do stuff (fuel/energy/raw materials etc). If demand is driven down, as it will be when people can't afford their bills, it means businesses go bust. Growth? You must be joking.
If you think 10% inflation is the peak, just wait a few months. Unfortunately the inflation figures will be suppressed a bit when we get to 12months after the first big energy rate rise, the increase will get consolidated into the new annual baseline, so the govt will try to sell this as getting inflation under control, but the prices will still be stratospherically high (just not going up even further as quickly). That's where the trick of abandoning the pension triple lock will get us, if you set the increase much lower than inflation/wages for a year it gets locked in for ever, then when the headline inflation drops after a year they'll say the pensions don't need to increase much. Kerching for the Treasury ..... for ever more.
Unfortunately the utterly catastrophic and idiotic actions of Truss/Kwarteng have made it necessary for the BoE to raise rates just to try to stop the £ collapsing completely. Some people need a damn good slap, utter sh*t-for-brains numbskulls.
... apart from that it's going well ..........
(PS ... and it looks like the £ is still going down against the $ and Euro..)
redtrummy
28-09-22, 12:34 PM
'when a gov gives free money away to its working population there is something wrong.'
When a civilised and supposedly rich country needs foodbanks there is something wrong, and they existed before Covid but now are busier than ever.
The BoE has stepped in to stabilise the bond market. (not totally successfully)
So, the BoE has had to step in to protect the economy from the Conservative government's policies.
I think that is a first.
The BoE has stepped in to stabilise the bond market. (not totally successfully)
So, the BoE has had to step in to protect the economy from the Conservative government's policies.
I think that is a first.
but who started the ball rolling in the first place? Labour who gave control back to the BOE directors under the promise that they would cut interest rates so Labour could borrow more money but keep the payments the same. problem is they kept borrowing and also took us out the gold standard so they sell off the reserves, which backfired IIR as the price of gold plummeted.
you have to remember that when the BOE cut interest rates other big country's like America had to do the same. the low interest rates also affected the stock market. thanks ****y pants Brown.
or am i wrong again....
but who started the ball rolling in the first place?
Assuming you're correct, the Tories have had over 12 years to fix it. This current debacle though is a triumph of ideology over sense. Remember Sunak? He called Truss' plan "fairy tale economics". The most positive of economists said it was a gamble, the IMF said "stop", even the White House recommended "fiscal prudence".
Trickle down economics works on paper but not in real life anywhere it has been tried.
Didn't we leave the gold standard in 1931?
G.Brown sold off the gold reserves but notified the markets in advance causing its value to drop but that was much later. He did pump massive amounts of money to save the UK banks which would have collapsed (taking the economy with it).
All of that, though, was from external forces (if you ignore the lack of regulation), this current fiasco is self inflicted.
Craig380
28-09-22, 07:17 PM
Brown selling off gold reserves at the price he did 'lost' the country around £7 billion at today's prices. That's loose change compared with the amounts that have spunked on doomed projects like HS2, dodgy PPE contracts, Test & Trace etc etc since 2010.
It's all Putin's fault, says Truss on local radio. She was on several local radio stations this morning and got savaged.
Here's BBC Bristol with just over one minute of a painful interview:
https://tinyurl.com/5e84v4zy
Boris's award for being our worst PM didn't last long.
dont blame current MP's for what their predecessors started. everyone seems to blame the "person in the chair" but not the system. one person does not make all the descensions of a party. we should start pointing the fingers at the advisors and civil servants. we dont get a vote for the head civil servants but they play a bigger role than the MP's.
as for putin, you have to wonder why he is doing what he is doing. after all he's not a stupid person. the UK would not think twice about invading a minor country if it needed its resources (middle east springs to mind). one man's terrorist is another man's freedom fighter.
back onto the economy. its feked worldwide and its going to take very very clever people to sort it out or everyone agrees to re-start the bean counter.
dont blame current MP's for what their predecessors started
I'm sorry but when (non) budget details are announced and then the pound collapses, government borrowing interest rates skyrocket the blame is only on the shoulders of the people who put forward the legislation. Truss and our Quasi-Chancellor (sic) are responsible.
This non budget was purely an exercise in ideology because Tories think that tax cuts are the answer to everything usually followed by cuts to services to pay for them. Problem here is that there's little left to cut.
The only good thing about this debacle is it makes it more likely that we are coming to the end of Tory rule.
daktulos
29-09-22, 06:08 PM
https://www.theguardian.com/commentisfree/2022/sep/12/liz-truss-sacking-civil-servants-government
The prime minister’s peremptory sacking of the head of the Treasury, Tom Scholar, is ominous. It was one of her first decisions and cannot have been anything he said or did. She had already let it be known, through “allies”, that she also intended to sack the cabinet secretary, Simon Case, but apparently changed her mind. Scholar’s sin was that he supposedly embodied the “Treasury orthodoxy”, which Liz Truss had pledged to overturn. His ousting was clearly meant as a talisman of her new regime.
There's a reason why civil servants are supposed to be separate from politics.
The relationship between politicians and civil servants is a bit like that between a house owner and a builder. The house owner wants an extension built, decides what it should look like etc, but if they tell the builder that they should start at the top of the wall and lay the bricks downwards it's not unreasonable for the builder to first point out that it is not the "normal" way to do things, to point out why it's usual to lay bricks from the bottom up and what could happen if you try to do it the other way round, and if the house owner insists then it's also not unreasonable for the builder to leave the job.
Sometimes it's wise to ask advice and listen to the experienced tradesperson you are employing. Learn from history. Experience is often gained just after you needed it.
garynortheast
30-09-22, 03:47 PM
This is a bit depressing when viewed this way.
https://kamikwasi.tax/
its about time somebody had the cinchonas to cut the stupid high earners tax. why should there be different rates of tax.. after all these "high earners" use the same services that all of us do well in fact most of them have private health care but do they get a rebate on their NI contributions or council tax... ermm no. some people i know have worked their butts off to get where they are but get robbed with the high earners tax. its not a fair taxation. lower taxation might just encourage foreign businesses to set up here and bring much needed income/jobs.
redtrummy
04-10-22, 11:35 AM
Yes, but a lot did not have to work their butts off, and does wheeling and dealing count as working their butts off? There's a lot of them.
... "high earners" use the same services that all of us do well in fact most of them have private health care but do they get a rebate on their NI contributions or council tax... ermm no....
You have to consider what sort of welfare state you want. Here we have something of an egalitarian approach to welfare, the alternative (or opposite if you prefer) is an individual means tested system or even pay-as-you-use, which would be impractical or unfair in reality.
I pay for stuff I don't use, but other people do (childrens' benefits, schools etc). The only time I've had dealings with the NHS in the last 40 yrs or so is basically some covid vaccines, but I pay for everyone else. Should I get a rebate? No, we judge that a system of availability to all and paid for by all (more or less), is possibly the least worst solution (a bit like the Monarchy).
Progressive taxation is probably a reasonable principle, we wouldn't want to eliminate the tax threshold and start taxing everyone on every pound they earn or receive which would be a very regressive system.
Whatever system, there will always be winners and losers, but it should be "fair". We are in a regime where high salaries have already factored in the high tax rates, if you dropped the progressive tax rates then arguably the high salaries should be cut to reflect it (net income remains the same), which would go down like a lead balloon with the Tory membership.
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