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A Political Thread pt. 2

The_Blindside

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TRF_Olyy

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There's a certain irony about BoJo, who is publicly islamophobic, ordering an enquiry into islamophobia in the Tory party

Meme Reaction GIF
 

The_Blindside

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Yep, overall cost of living is going to rocket this year. Not looking forward to it.
 

ncurd

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Ragey Erasmus

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Its all pretty scary and not being discussed enough, for me its about not being able to buy another board/video game for others its about the use of foodbanks or not.
Inflation numbers have always seemed such ********, it's a serious problem as savings are eroded, wages rise by far less than real price increases and the vast majority of people see their spending power steadily eroded... It's not a tactic for sustainable prosperity. Eventually prices rise enough that people choose to stop buying certain items, THEN the economy starts tanking as necessities eat up more and more of someones income.
 

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Inflation is a real problem. There’s been a really unfortunate confluence of events including Brexit and the pandemic, so I hope we’re seeing a shortish term spike rather than the new norm.

Rising inflation is often dampened by raising interest rates. Without wanting to sound old fartish about it, there’s a whole generation of house buyers that only know incredibly cheap, and hardly fluctuating, mortgages of many times salaries. I suspect even limited interest rate rises would spell misery / repossession for many of those.

I remember sitting in an asset manager’s office 2 or 3 years pre pandemic and hearing that interest rates of 4 - 5% were about right for Britain. Even allowing for what’s happened since 2008, interest rates from 1971 to 2021 still averaged over 7%. We have been in an exceptional era for many years now and while low interest rates are great for borrowers they’re rubbish for savers.

Those in authority have some really tough issues to face.
 

ncurd

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Inflation is a real problem. There’s been a really unfortunate confluence of events including Brexit and the pandemic, so I hope we’re seeing a shortish term spike rather than the new norm.

Rising inflation is often dampened by raising interest rates. Without wanting to sound old fartish about it, there’s a whole generation of house buyers that only know incredibly cheap, and hardly fluctuating, mortgages of many times salaries. I suspect even limited interest rate rises would spell misery / repossession for many of those.

I remember sitting in an asset manager’s office 2 or 3 years pre pandemic and hearing that interest rates of 4 - 5% were about right for Britain. Even allowing for what’s happened since 2008, interest rates from 1971 to 2021 still averaged over 7%. We have been in an exceptional era for many years now and while low interest rates are great for borrowers they’re rubbish for savers.

Those in authority have some really tough issues to face.
There's a reason why when I bought this house it was 5years fixed rate with Brexit on the horizon it was clear there would be high volatility.

BTW this was was my first at 34 so I've no idea who this generation of home buyers are because Millennials find it notoriously hard to get on the housing market, due to rocketing house prices since the early 90's and getting a mortgage has always been hard in the UK as the combined salary of everyone being giving the mortgage needs to be multipled by 4.5 to work out the maximum amount you could be lent.

I live in what is essentially meant to be a 2 bedroom starter home and it cost only slightly less than the UK average salary x2, x4.5. So an average couple could afford it but we know the average salary is not really a good stat for this as we want to workout what salary first time buyers are so entering at the lowest/cheapest point of the market.


I really don't know how short the Brexit spike is going to be its still not all factored in as we are still negotiating the extent of which it reaches. Couple that with inflation rarely goes back down its going to take years for it to right itself. I don't think even years with low inflation my standard pay rise has ever been above inflation (those from changing jobs and promotions have been well above so I'm net winner currently). It feel like a process that will lead to just more and more people fallling below the poverty line unless the governement to do things and help them in the hear and now. However we've been slashing benefits for the past 12 years rather than suring them up.
 

TRF_Olyy

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BTW this was was my first at 34 so I've no idea who this generation of home buyers are because Millennials find it notoriously hard to get on the housing market, due to rocketing house prices since the early 90's and getting a mortgage has always been hard in the UK as the combined salary of everyone being giving the mortgage needs to be multipled by 4.5 to work out the maximum amount you could be lent.
A house on my parents street has gone up by £120k over the course of COVID (family moved in just before lockdown, listed it on the market last week). Nothing to write home about, just standard suburban 3 bed, it's crazy

Definitely feels like house prices are rising faster than I can save to try and get one - 95% mortgages sound good on paper but like you said: when mortgages are 4.5(ish) times your salary good luck finding a house where that covers 95%
 

The_Blindside

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My dad was always telling me how bad it was in the 70s and early 80s with inflation and high interest rates to combat it. Looks like our generation are about to be hit by the same.
 

Ragey Erasmus

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My dad was always telling me how bad it was in the 70s and early 80s with inflation and high interest rates to combat it. Looks like our generation are about to be hit by the same.
Was that combined with stagnant wages, a hugely inflated housing market and people already in record debt though? I could see this potentially being worse if interest rates start rising.

No government is going to want to tackle it as it's going to be painful for a lot of people. Numerous politicians have perfected the art of kicking the can down the road and soon it looks like we will run out of road...
 

The_Blindside

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Was that combined with stagnant wages, a hugely inflated housing market and people already in record debt though? I could see this potentially being worse if interest rates start rising.

No government is going to want to tackle it as it's going to be painful for a lot of people. Numerous politicians have perfected the art of kicking the can down the road and soon it looks like we will run out of road...

Most likely yes, that is part of why inflationary pressures happen, back in the 70s it was mainly due to oil prices. It’s a vicious cycle until it can be brought back under control. Governments will blame commodity prices and supply side issues, which are outside of their control and deflect blame and they are partly right. Interest rates is the blunt instrument they can use or now it is the BOE’s realm. Of course, savers will be happier, but those with variable rate mortgages will feel the hit.
 

TRF_Olyy

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It's relentless!
 

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