news & politics:discussion

[cellar]

2 hours ago, steviewevie said:

woah. Yes, ok, I understand how interest rates work.....but now there are more people who own houses without a mortgage, and more people with fixed rate mortgages which have not come to an end yet, so the lag between rate rises and people's spending is  longer than used to be. So these rate rises over last 6/12 months is affecting fewer people than would have in the past.  Plus, a lot of the inflation that we see was due to global energy and food prices going up, which have been coming down since the beginning of the year, and that has nothing to do with people's demand. But, bank needs to get inflation down, and they only have one tool, and that is interest rates, so that's what they do. The govt could impose price controls as seem elsewhere, but they haven't. The worry with rate rises is they could over do it and we end up in a recession with high unemployment, and inflation coming down anyway. 

Been a few replies since this, and I think Neil has mentioned some of what I would say in response - but basically it's not such a narrow lens as the one you described. Changing interest rates has so many different implications, but one that is known it that is helps control inflation.

Frays point about people thinking they know better than the experts is spot on - do you think BoE is really doing this for any reason other than it thinks its the best course of action? 

And you say too many experts - there's a lot of free stuff on the Internet that you can read to find out more about this stuff if you want to.

Edited August 16, 2023 by cellar

[steviewevie]

1 minute ago, cellar said:

Been a few replies since this, and I think Neil has mentioned some how what I would say in response - but basically it's not such a narrow lens as the one you described. Changing interest rates has so many different implications, but one that is know is that is helps control inflation.

Frays point about people thinking they know better than the experts is spot on - do you think BoE is really doing this for any reason other than it thinks its the best course of action? 

And you say too many experts - there's a lot of free stuff on the Internet that you can read to find out more about this stuff if you want to.

I get it helps to bring inflation down, but I am arguing that it hasn't done much to bring down current inflation, that is mostly because of global fuel/food prices coming down following supply shocks of covid/ukraine. I get how it will likely help going forward though, but the cost will possibly be higher unemployment and maybe a recession, as well as sh*t for some mortgage holders.

I am not saying I know better than bank of england, but people are saying they got it wrong in past over ultra low interest rates and QE, but now have got it right with raising interest rates, so all a bit subjective.

[gizmoman]

7 minutes ago, Ozanne said:

I disagree with everything you post but I don’t want you banned. I haven’t ignored your posts but equally it would be a subjective reason if I don’t want to see your posts. I want action taken against the bullies of this forum or the ability to prevent them from seeing my posts.

So you didn't answer my question, why don't you call out Stevie when he is abusive? Do you want action taken against him too or just Fish and Fray?

[steviewevie]

1 minute ago, gizmoman said:

So you didn't answer my question, why don't you call out Stevie when he is abusive? Do you want action taken against him too or just Fish and Fray?

yeah, why?

[Crazyfool01]

currently attempting to tidy up the thread via pms 

[fraybentos1]

5 minutes ago, gizmoman said:

So you didn't answer my question, why don't you call out Stevie when he is abusive? Do you want action taken against him too or just Fish and Fray?

2 lonely men who rely on each other for interaction on here to pass the time, that’s my analysis 

[Guest]

7 minutes ago, steviewevie said:

I get it helps to bring inflation down, but I am arguing that it hasn't done much to bring down current inflation, that is mostly because of global fuel/food prices coming down following supply shocks of covid/ukraine. I get how it will likely help going forward though, but the cost will possibly be higher unemployment and maybe a recession, as well as sh*t for some mortgage holders.

I am not saying I know better than bank of england, but people are saying they got it wrong in past over ultra low interest rates and QE, but now have got it right with raising interest rates, so all a bit subjective.

I disagree with the last bit completely. Low interest rates were the right course of action after the Crash and in the pandemic as the economy was on its knees. But now the BoE have got their response to the current crises epically wrong. They are actively making people poorer and wanting people to accept real terms pay cuts all whilst they happily accept theirs.

There’s plenty of people out there saying that rates should’ve stayed low and the BoE have made things worse.

[cellar]

13 minutes ago, steviewevie said:

I get it helps to bring inflation down, but I am arguing that it hasn't done much to bring down current inflation, that is mostly because of global fuel/food prices coming down following supply shocks of covid/ukraine. I get how it will likely help going forward though, but the cost will possibly be higher unemployment and maybe a recession, as well as sh*t for some mortgage holders.

I am not saying I know better than bank of england, but people are saying they got it wrong in past over ultra low interest rates and QE, but now have got it right with raising interest rates, so all a bit subjective.

I guess that goes back to my earlier point, that you can't say how much they have brought inflation down, because you don't know what it would have been without the rises.

And I think the BoE know that they have done things wrong with hindsight - not raising IRs faster, for example. But what is the alternative? And its not just the BoE who you're saying have it wrong, it's the majority of global economic powers. 

Raising inflation is the only real tool we have that is proven to fight inflation. If you can tell me a better way I would genuinely love to hear it.

[Neil]

6 minutes ago, Ozanne said:

I disagree with the last bit completely. Low interest rates were the right course of action after the Crash and in the pandemic as the economy was on its knees. But now the BoE have got their response to the current crises epically wrong. They are actively making people poorer and wanting people to accept real terms pay cuts all whilst they happily accept theirs.

There’s plenty of people out there saying that rates should’ve stayed low and the BoE have made things worse.

rates needed to increase in 2008 rather than be cut cos QE flooded the market with cheap money.

[Guest]

Just now, Neil said:

rates needed to increase in 2008 rather than be cut cos QE flooded the market with cheap money.

They needed to cut rates to ensure people had more money to put back into the economy as the economy was on its knees.

The BoE has new bosses now though and sadly they don’t seem as fussed about helping people. As I’ve been saying you raise interest rates when inflation is due to high demand but when inflation is due to supply side issues that won’t work so you need to do something else. Ultimately you need to keep money flowing and put fiscal measures in place to curb inflation. Sadly the Tories didn’t want to help either!

[steviewevie]

7 minutes ago, cellar said:

I guess that goes back to my earlier point, that you can't say how much they have brought inflation down, because you don't know what it would have been without the rises.

And I think the BoE know that they have done things wrong with hindsight - not raising IRs faster, for example. But what is the alternative? And its not just the BoE who you're saying have it wrong, it's the majority of global economic powers. 

Raising inflation is the only real tool we have that is proven to fight inflation. If you can tell me a better way I would genuinely love to hear it.

I bet you in a few years they will say they went too far with interest rate rises.

Tenner?

Edited August 16, 2023 by steviewevie

[Neil]

Just now, steviewevie said:

I bet you in a few years they will say they went to far with interest rate rises.

Tenner?

they're good at knowing the perfect with hindsight.

[fraybentos1]

2 minutes ago, Ozanne said:

As I’ve been saying you raise interest rates when inflation is due to high demand but when inflation is due to supply side issues that won’t work

how are you not bored of posting this same nonsense over and over and over again

 

2 minutes ago, Ozanne said:

so you need to do something else

omg you've cracked it!!

[fraybentos1]

1 minute ago, steviewevie said:

I bet you in a few years they will say they went to far with interest rate rises.

Tenner?

they started too late so had to go over the top is what they should say.

[fraybentos1]

14 minutes ago, Ozanne said:

I disagree with the last bit completely. Low interest rates were the right course of action after the Crash and in the pandemic as the economy was on its knees. But now the BoE have got their response to the current crises epically wrong. They are actively making people poorer and wanting people to accept real terms pay cuts all whilst they happily accept theirs.

There’s plenty of people out there saying that rates should’ve stayed low and the BoE have made things worse.

they were low continually from 08 till recently, the economy was not f**ked that entire time. too slow to raise them!

[Guest]

4 minutes ago, steviewevie said:

I bet you in a few years they will say they went too far with interest rate rises.

Tenner?

Meanwhile they’ll have retired on their cushty salaries and we’ll be left with the legacy of their ineptitude. 

[fraybentos1]

29 minutes ago, steviewevie said:

 

I am not saying I know better than bank of england, but people are saying they got it wrong in past over ultra low interest rates and QE, but now have got it right with raising interest rates, so all a bit subjective.

A fairly consistent argument. They were too low post recovery from the crash e.g why did they need to be 0.5% in 2014? Also too slow to raise after the pandemic obv

[Crazyfool01]

3 minutes ago, Barry Fish said:

How does that work ?   

give me 5 mins you'll find out 

[Crazyfool01]

Just now, Barry Fish said:

lol - now I am all excited and sweaty 🙂

which probably isn't the best thing for a fish 

[lazyred]

14 minutes ago, cellar said:

I guess that goes back to my earlier point, that you can't say how much they have brought inflation down, because you don't know what it would have been without the rises.

And I think the BoE know that they have done things wrong with hindsight - not raising IRs faster, for example. But what is the alternative? And its not just the BoE who you're saying have it wrong, it's the majority of global economic powers. 

Raising inflation is the only real tool we have that is proven to fight inflation. If you can tell me a better way I would genuinely love to hear it.

Can tax rises and price controls be used alongside interst rate rises? I understand the politics against this but would they have the same economic effect? If they work on inflation then tax rises and price controls could spread the pain by targeting the areas that benefit from or are unaffected by rate rises.

[Guest]

2 minutes ago, lazyred said:

Can tax rises and price controls be used alongside interst rate rises? I understand the politics against this but would they have the same economic effect? If they work on inflation then tax rises and price controls could spread the pain by targeting the areas that benefit from or are unaffected by rate rises.

Spain did something very similar and seems to have worked. 

[fraybentos1]

4 minutes ago, lazyred said:

Can tax rises and price controls be used alongside interst rate rises? I understand the politics against this but would they have the same economic effect? If they work on inflation then tax rises and price controls could spread the pain by targeting the areas that benefit from or are unaffected by rate rises.

The Bank of England don’t have this power tho and they can only do the IR rise bit 

[fraybentos1]

2 minutes ago, Ozanne said:

Spain did something very similar and seems to have worked. 

So you admit the raising of interest rates alongside other measure was effective? Weird you’re now admitting this! Progress 

[steviewevie]

8 minutes ago, lazyred said:

Can tax rises and price controls be used alongside interst rate rises? I understand the politics against this but would they have the same economic effect? If they work on inflation then tax rises and price controls could spread the pain by targeting the areas that benefit from or are unaffected by rate rises.

Yeah but that is done by government and voters might not like it so leave it to the bank to do the pain with no gain.

[lazyred]

2 minutes ago, fraybentos1 said:

The Bank of England don’t have this power tho and they can only do the IR rise bit 

Yes and the Govt have already raised taxes and capped energy.  I'm talking about higher taxes on savings interest and capital gains and capping basic food stuff. I'd do this anyway but I'm interested if it would help with inflation