‘Mini’ budget

[Fair Hill]

And this makes me realise how wildly out of touch some other people are. Living in SW Scotland leaves anyone very far out of touch with the reality of life for everyone else.
If you were paid £150k, you’d find it disappeared pretty fast in much of the rest of the country. £60k gone in tax to start with (including the tax cut for the rich bastard). If he had somehow saved up two whole years’ income, he could afford to buy an ex-council terraced house somewhere like Tooting or East Ham. He would need to spend half his remaining income on mortgage payments. Half of the remainder on stamp duty. He would now have about £19k to support, feed and transport his family, and pay the bills. It’s not a lot of money.

You’re doing a stalwart job in defending the policies of a lady who has been in office less than 3 weeks (that’s including 2 weeks holidays) and has been the cause of the U.K. markets losing $500 billion.

Everything is relative but when mortgage rates increase (and they will) beyond what is affordable it doesn’t matter if you were thinking of skiing down the Alps or camping in Scunthorpe, sacrifice’s will have to be made.

Greece and Italy can now borrow money at a cheaper rate than the U.K. government.

The markets are expecting Bank of England to raise the bank rate to 6%.

Carnage.

 

[Bavarianbrit]

I rent out a house in Dover for £525 the rest of the landlords it seems are after £850ish for the same 2 bed terraced. He is happy to pay that and I feel OK at this level as it helps my pension and I don't feel like an A hole. He had to have 2 weeks off from catching Covid and was not paid as he is on some crappy short term contract fitting gas meters so he had to defer his rent which for me is OK. There are folks really struggling to pay their way out there.

 

[Apthorpe]

You're describing me. And yes, I have come to realise that I am rich. Very, very rich, compared to the families in my son's school. I would be very happy to pay substantially more tax, if it meant that public education improved to the extent that I didn't have to figure out how to either buy a house in a better catchment or pay for private school. We really shouldn't be in a position where we have to do this.

Write a cheque to the Exchequer then. The country seems to be full of people who claim they are happy to pay more tax, yet although the facility to do so exists, for some strange reason the amount actually received is astonishingly low. You touch on the crucial point though - paying more tax doesn’t make anything better. Lefties continually argue that more money must be spent, but nobody is ever capable of specifying a sum of money that would be adequate to achieve a reasonable outcome. I agree that we shouldn’t be in this position, but as long as the state hoovers up all these resources, no improvement is possible.
The other question arises of just how it is possible for large numbers of people who have all received at least ten years of state education and healthcare to be incapable of supporting themselves. That, in itself, is an astonishing failure.

Really? A shipyard worker in 1923 could afford a 3 bed semi in Edinburgh? I would very much like to see evidence of this.

I wasn’t thinking of Edinburgh. I did look up something earlier thinking about another person’s comment about something and found that housing then was cheap enough that it is entirely plausible. I have friend’s who live in a terraced house in West London which was previously a shipyard workers’. Most of the housing around there was built for and taken by similar workers at eg. Thornycroft, and later rail, electrical and aircraft factories.

 

[Mungo]

You touch on the crucial point though - paying more tax doesn’t make anything better.

Aye. There's the rub. Here at least.

My wife is Dutch, and they seem to achieve very markedly better public services for similar taxation (in fact, substantially higher taxation, as far as I can tell). Certainly they don't worry about having to send their kids to private school and their roads aren't full of holes.

We do seem to be notably bad at administering socialised systems.

 

[Miki]

<snip>
The markets are expecting Bank of England to raise the bank rate to 6%.
Carnage.

To take it to where is was in 1999, although it was on the way down as it was up @ 7.7% in the middle of 1998.
In August of 1989 it was 13% almost 15% by October .... did we all die ? was it "Carnage" ?
It halved to 6% in 1977 (for a brief moment) and then doubled again and didn't get down to near 6% until 1992. 20 years of double figures.

What is it with you Benny are you only 16 years old ?

We are not all Doomed

 

[Mungo]

I have friend’s who live in a terraced house in West London which was previously a shipyard workers’.

Pretty big difference between a West London terrace and an Edinburgh semi...

 

[Apthorpe]

You’re doing a stalwart job in defending the policies of a lady who has been in office less than 3 weeks (that’s including 2 weeks holidays) and has been the cause of the U.K. markets losing $500 billion.

Where did you get $500 billion from?

Everything is relative but when mortgage rates increase (and they will) beyond what is affordable it doesn’t matter if you were thinking of skiing down the Alps or camping in Scunthorpe, sacrifice’s will have to be made.

This is true, but it is not a consequence of the “mini-budget”.

Greece and Italy can now borrow money at a cheaper rate than the U.K. government.

Bloomberg tells me that isn’t true. Current 10 yr yields are 4.5% for UK, 4.73% for Italy and 4.88% for Greece. To address the point you were overegging: yes, yields have gone up, a significant cause is because the UK has gone further down the path of normalising policy and unwinding emergency stimulus and QE than the eurozone. (QE was a policy carried much too far by the idiot Carney, as well as the Europeans as a fig leaf to cover the Euro’s unsustainability) If you like, we’ve started paying those bills. The Eurozone is still running them up.

The markets are expecting Bank of England to raise the bank rate to 6%.

When you say that the markets expect that, it does rather depend who’s estimate you want to take. Sensible experts give numbers between 4 and 5.8%. Either way, those enormous moves are not the result of a budget that reduced tax by possibly 1% of GDP. They are the result of the Bank of England and other central bankers being stupid, complacent and too slow. The fact is that, hysteria aside, the UK is in the same position as the rest of Europe, except with slightly lower debt, a floating currency and a bit more headroom for fiscal stimulus if and when needed.

Carnage.

 

[Rasputin]

My daughter and son in law live in central london and seem to live contented and busy lives, she as a medical researcher and he as an architect and there combined income is a lot less than 150k they might not own a house but that’s not a requirement of life.
“The rich man is simply the one who earns more than he spends”…..

Aye. There's the rub. Here at least.

My wife is Dutch, and they seem to achieve very markedly better public services for similar taxation (in fact, substantially higher taxation, as far as I can tell). Certainly they don't worry about having to send their kids to private school and their roads aren't full of holes.

We do seem to be notably bad at administering socialised systems.

Correct we are Frivolous to put it politely. In Switzerland the tax rates are also comparable with the UK by the time you add in your health insurance yet the services are top notch. So now we’re going to borrow more pay less tax and get declining services year on year.

Bag of spanner’s wish I had never moved back. Which galls me as the UK used to be something to be proud of and we are quickly descending into a third world state.

 

[Apthorpe]

Pretty big difference between a West London terrace and an Edinburgh semi...

Yes, but the former was affordable for a shipyard worker.

 

[Fair Hill]

Apthorpe, I'm juggling a few balls today which is affecting my concentration but the $500 billion figure came from Bloomberg so you should be able to find that handy enough.

It is a direct consequence of Dim Lizzys budget.

My source for your third point is Sir Charlie Bean, you may have heard of him.

I said 6% (which I think it will be at least), your sensible experts reckon it could be 5.8%, we won't fall out over such a small difference.

The Irish government announced their budget today it might provide some interesting reading for you tomorrow, it's sometimes good to learn a differing point of view.

 

[Fair Hill]

Yes, but the former was affordable for a shipyard worker.

Back in the day Irish shipyard workers earned multiples of the average industrial wage before machinery took over.

 

[Apthorpe]

Apthorpe, I'm juggling a few balls today which is affecting my concentration but the $500 billion figure came from Bloomberg so you should be able to find that handy enough.

It is a direct consequence of Dim Lizzys budget.

My source for your third point is Sir Charlie Bean, you may have heard of him.

I said 6% (which I think it will be at least), your sensible experts reckon it could be 5.8%, we won't fall out over such a small difference.

The Irish government announced their budget today it might provide some interesting reading for you tomorrow, it's sometimes good to learn a differing point of view.

It did, thank you. The controversial things Truss and co got a kicking for were: A)reducing corporation tax to a level still much higher than Ireland's. B) making the top rate of income tax 40% just like Ireland.
If one says the Irish public finances are well run (and I agree), then surely you agree that moving in that direction is a good, not a bad, thing.

 

[glasshalffull]

Interest rates have been kept artificially low for over two decades now they were 14% when I bought my first house in the 90's. The result has been inflated house prices and inflated everything else and now it all could collapse like a house of cards. The Bank of England is more to blame for this than the government's are as they set the base interest rates and as of this year they haven't raised rates fast nor hard enough compared to other world economies. The mini budget has only compounded the £'s weakness as many believe the government can't afford it. The government have tried to provide a solution but rather than by a tweek here and there they've been a bit more radical. Problem is the media whip it up to create an ever increasing panic to sell the headline. We've all got used to being spenders rather than savers as it didn't pay to save, well that's all about to change.

 

[Scotty99]

A couple of points:
1. The BBC does not control the exchange rate. It, along with all the other media outlets reported the fact that the pound had dropped to its lowest ever rate against the dollar. That does not make the BBC biased nor opportunistic
2. The BBC is and always has been accused of bias from all sides of the political spectrum - to me that means they are doing a reasonable job, especially if they are ****ing off people like you

Cheers

Bruce

Of course the BBC don’t control the exchange rate, they just report on it in a sensationalist and biased way. The pound has been hovering around $1.08-$1.06 for about a month now, it hit about $1.05 yesterday but then rallied again today. The biased and opportunistic element of the reporting by the BBC is them linking the level of the pound directly to Fridays announcement when in fact it is driven by the war in Ukraine which is driving the energy crisis and inflation which is the root cause of the low pound. The currency markets have been forecasting that the pound will be worth only $0.9 in Q1 2023. This has been consistently forecast for many months now. When it happens no doubt the BBC will link it to whatever announcement the government makes around that time, which again will be both biased an opportunistic. Roll on 2027 when they lose their charter.

 

[Scotty99]

​

The pound has not hit bottom yet its forecast to fall lower even down to 80c. This has been forecast as far back as June July this year well before Truss was PM and Kwateng was Chancellor. Fasten your seat belts its going to be a rough ride on a down slope, unless of course the mini budget actually works.

Pound to Dollar Forecast For 2022, 2023, 2024, 2025 And 2026​

Month	Open	Min-Max	Close	Total,%
2022
Sep	1.162	1.003-1.168	1.018	-12.4%
Oct	1.018	0.956-1.024	0.987	-15.1%
Nov	0.987	0.943-0.987	0.957	-17.6%
Dec	0.957	0.943-0.971	0.957	-17.6%
2023
Jan	0.957	0.914-0.957	0.928	-20.1%
Feb	0.928	0.918-0.946	0.932	-19.8%
Mar	0.932	0.890-0.932	0.904	-22.2%
Apr	0.904	0.872-0.904	0.885	-23.8%
May	0.885	0.870-0.896	0.883	-24.0%
Jun	0.883	0.865-0.891	0.878	-24.4%
Jul	0.878	0.878-0.904	0.891	-23.3%
Aug	0.891	0.855-0.891	0.868	-25.3%
Sep	0.868	0.868-0.895	0.882	-24.1%
Oct	0.882	0.851-0.882	0.864	-25.6%
Nov	0.864	0.842-0.868	0.855	-26.4%
Dec	0.855	0.847-0.873	0.860	-26.0%
2024
Jan	0.860	0.824-0.860	0.837	-28.0%
Feb	0.837	0.837-0.874	0.861	-25.9%
Mar	0.861	0.850-0.876	0.863	-25.7%
Apr	0.863	0.841-0.867	0.854	-26.5%
May	0.854	0.854-0.882	0.869	-25.2%
Jun	0.869	0.858-0.884	0.871	-25.0%
Jul	0.871	0.871-0.906	0.893	-23.1%
Aug	0.893	0.893-0.933	0.919	-20.9%
Sep	0.919	0.908-0.936	0.922	-20.7%

Month	Open	Min-Max	Close	Total,%
2024 Continuation
Oct	0.922	0.881-0.922	0.894	-23.1%
Nov	0.894	0.894-0.927	0.913	-21.4%
Dec	0.913	0.913-0.954	0.940	-19.1%
2025
Jan	0.940	0.931-0.959	0.945	-18.7%
Feb	0.945	0.911-0.945	0.925	-20.4%
Mar	0.925	0.924-0.952	0.938	-19.3%
Apr	0.938	0.896-0.938	0.910	-21.7%
May	0.910	0.871-0.910	0.884	-23.9%
Jun	0.884	0.867-0.893	0.880	-24.3%
Jul	0.880	0.880-0.916	0.902	-22.4%
Aug	0.902	0.888-0.916	0.902	-22.4%
Sep	0.902	0.902-0.943	0.929	-20.1%
Oct	0.929	0.925-0.953	0.939	-19.2%
Nov	0.939	0.925-0.953	0.939	-19.2%
Dec	0.939	0.897-0.939	0.911	-21.6%
2026
Jan	0.911	0.902-0.930	0.916	-21.2%
Feb	0.916	0.876-0.916	0.889	-23.5%
Mar	0.889	0.876-0.902	0.889	-23.5%
Apr	0.889	0.861-0.889	0.874	-24.8%
May	0.874	0.871-0.897	0.884	-23.9%
Jun	0.884	0.884-0.923	0.909	-21.8%
Jul	0.909	0.894-0.922	0.908	-21.9%
Aug	0.908	0.877-0.908	0.890	-23.4%
Sep	0.890	0.882-0.908	0.895	-23.0%
Oct	0.895	0.871-0.897	0.884	-23.9%

 

[Fair Hill]

It did, thank you. The controversial things Truss and co got a kicking for were: A)reducing corporation tax to a level still much higher than Ireland's. B) making the top rate of income tax 40% just like Ireland.
If one says the Irish public finances are well run (and I agree), then surely you agree that moving in that direction is a good, not a bad, thing.

Truss hasn't even got a scolding yet, never mind a good kick in the arse.

History will not be kind to her, her best bet at this stage is to put her hands up, admit she is way out of he depth (lol) and go back to whatever she was doing before the disgusting pigs that orchestrated her election are allowed to profit any more at the expense of her dignity.

She is a scapegoat and an international laughing stock, someone with some semblance of integrity needs to stop the charade.

 

[Apthorpe]

Of course the BBC don’t control the exchange rate, they just report on it in a sensationalist and biased way. The pound has been hovering around $1.08-$1.06 for about a month now,

Not correct. Pound has been drifting around $1.17 to $1.11 for most of that time. The reporting is both biased and wrong, I agree about that.

it hit about $1.05 yesterday but then rallied again today. The biased and opportunistic element of the reporting by the BBC is them linking the level of the pound directly to Fridays announcement when in fact it is driven by the war in Ukraine which is driving the energy crisis and inflation which is the root cause of the low pound.

I think it owes more to the incompetence of the Bank of England. The war in Ukraine isn't really all that responsible for the energy crisis. It has just exposed the idiocy of the bureaucrats who designed such a dysfunctional energy policy.

The currency markets have been forecasting that the pound will be worth only $0.9 in Q1 2023.

Currency forecasts more than a couple.of months ahead are no more than a stab in the dark. Where did you find someone foolish enough to predict monthly currency levels years into the future as in the table below? Completely absurd.

This has been consistently forecast for many months now. When it happens no doubt the BBC will link it to whatever announcement the government makes around that time, which again will be both biased an opportunistic. Roll on 2027 when they lose their charter.

 

[mealiejimmy]

Of course the BBC don’t control the exchange rate, they just report on it in a sensationalist and biased way. The pound has been hovering around $1.08-$1.06 for about a month now, it hit about $1.05 yesterday but then rallied again today. The biased and opportunistic element of the reporting by the BBC is them linking the level of the pound directly to Fridays announcement when in fact it is driven by the war in Ukraine which is driving the energy crisis and inflation which is the root cause of the low pound. The currency markets have been forecasting that the pound will be worth only $0.9 in Q1 2023. This has been consistently forecast for many months now. When it happens no doubt the BBC will link it to whatever announcement the government makes around that time, which again will be both biased an opportunistic. Roll on 2027 when they lose their charter.

In your world is the BBC to blame for everything?
BTW which media outlet(s) do you trust to report accurately and without bias?

 

[potshotpat]

In your world is the BBC to blame for everything?
BTW which media outlet(s) do you trust to report accurately and without bias?

Have I got news for you and private eye magazine.

 

[glasshalffull]

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