Thank goodness for austerity

[Heltor Chasca]

Good listen on Food Banks. The verdict on why people use them closely aligns with what I hear from a relative in Manchester who works in one.

http://www.bbc.co.uk/programmes/b07krdvv

Al

when I visit Lidls I usually pickup some pasta or oats or baked beans for the food bank at our Local Sainsburys ( ) - not what they intended I bet but Lidl is much cheaper on certain things. I ve not been well off all my life but now I am retired things looking up ( )

Great attitude. [emoji106] Thank you.

[al_yrpal]

We shouldn't need food banks.

I agree, but apparently a large proportion of users are people who have had their benefits withdrawn for some reason, or where they are entitled to benefits but the DHSS has fouled up and benefits due havent arrived. The average usage is apparently about 3 visits. The radio programme covers some of it. They are not a modern phenomenon, my father used to talk about when his dad was out of work and the Sally Army fed them for months which is why I am always a soft touch for the Sally Army despite not being a believer.

Al

[Flinders]

The horizon household currently runs a fairly high mortgage. Ours isn't fixed and is therefore vulnerable to hikes in interest rates. Fingers crossed though, there won't be any for a good while yet and Bank rate looks likely to stay at .5% until the end of 2016. I would say much longer than that in fact.

Interest rate rises are only likely if growth starts to take off, causes shortages and starts to put upward pressure on prices - inflation. But while growth is stagnant, that is unlikely.

Thanks to austerity, the UK economy will probably remain in the doldrums until 2019 when there will be a short loosening just before the election in 2020. By that time, our mortgage will be nearly paid off.

Lower taxes for the better off will result in greater household saving rates while cuts in benefits will result in lower spending by households. Taken together, along with reducing the deficit generally, growth will hardly show itself, the economy will stagnate, prices will remain flat and interest rates will stay at .5%.

Thanks George!

If you want to pay a mortgage off fast, what you need is high inflation which includes high wage inflation, even if interest rates are also on the fairly high side. That's why precious generations gave the advice 'mortgage to the hilt'. That advice is no longer so good as it was.

[kwackers]

If you want to pay a mortgage off fast, what you need is high inflation which includes high wage inflation, even if interest rates are also on the fairly high side. That's why precious generations gave the advice 'mortgage to the hilt'. That advice is no longer so good as it was.

Indeed. I pretty much relied on inflation to buy houses.
Each house pretty much skint me for a few years until inflation and wage rises reduced the relative cost to near negligible levels.
Without inflation (and associated wage rises) I'd have remained skint until the mortgage was paid for.

[horizon]

The horizon household currently runs a fairly high mortgage. Ours isn't fixed and is therefore vulnerable to hikes in interest rates. Fingers crossed though, there won't be any for a good while yet and Bank rate looks likely to stay at .5% until the end of 2016. I would say much longer than that in fact.

Interest rate rises are only likely if growth starts to take off, causes shortages and starts to put upward pressure on prices - inflation. But while growth is stagnant, that is unlikely.

Thanks to austerity, the UK economy will probably remain in the doldrums until 2019 when there will be a short loosening just before the election in 2020. By that time, our mortgage will be nearly paid off.

Lower taxes for the better off will result in greater household saving rates while cuts in benefits will result in lower spending by households. Taken together, along with reducing the deficit generally, growth will hardly show itself, the economy will stagnate, prices will remain flat and interest rates will stay at .5%.

Thanks George!

May 2018: so interest rates are on hold again. Well I did say so (back in 2015). Still at 0.5% as I predicted.

My latest economic theory is that growth is almost impossible nowadays due to the nature of investment - high tech, low labour input, small multiplier effect. Infrastructure development follows lobbying for capital projects with high initial investment and large profits but little long term employment. Building new roads does little for growth while renovating historic buildings and building cycle lanes works wonders.

(The George I referred to is George Osborne!) And sorry to resurrect an old thread but this one was a prediction and therefore needs to be checked from time to time.

[Cyril Haearn]

Good listen on Food Banks. The verdict on why people use them closely aligns with what I hear from a relative in Manchester who works in one.

http://www.bbc.co.uk/programmes/b07krdvv

Al

when I visit Lidls I usually pickup some pasta or oats or baked beans for the food bank at our Local Sainsburys ( ) - not what they intended I bet but Lidl is much cheaper on certain things. I ve not been well off all my life but now I am retired things looking up ( )

Great attitude. Thank you.

You are lucky, I have only seen donation boxes for food banks, not for Homo Velocius
In any case, a decent society would look after people so food banks were not needed

[horizon]

The horizon household currently runs a fairly high mortgage. Ours isn't fixed and is therefore vulnerable to hikes in interest rates. Fingers crossed though, there won't be any for a good while yet and Bank rate looks likely to stay at .5% until the end of 2016. I would say much longer than that in fact.

Interest rate rises are only likely if growth starts to take off, causes shortages and starts to put upward pressure on prices - inflation. But while growth is stagnant, that is unlikely.

Thanks to austerity, the UK economy will probably remain in the doldrums until 2019 when there will be a short loosening just before the election in 2020. By that time, our mortgage will be nearly paid off.

Lower taxes for the better off will result in greater household saving rates while cuts in benefits will result in lower spending by households. Taken together, along with reducing the deficit generally, growth will hardly show itself, the economy will stagnate, prices will remain flat and interest rates will stay at .5%.

Thanks George!

May 2018: so interest rates are on hold again. Well I did say so (back in 2015). Still at 0.5% as I predicted.

My latest economic theory is that growth is almost impossible nowadays due to the nature of investment - high tech, low labour input, small multiplier effect. Infrastructure development follows lobbying for capital projects with high initial investment and large profits but little long term employment. Building new roads does little for growth while renovating historic buildings and building cycle lanes works wonders.

(The George I referred to is George Osborne!) And sorry to resurrect an old thread but this one was a prediction and therefore needs to be checked from time to time.

I might just add to my original post that it is now the gig economy (I'm not sure the term was in use then) and not cuts in benefits (they have already happened) that is reducing demand and stifling growth. The technological revolution should stimulate growth but ironically might not, due to its ability to suppress wages - that makes it different IMV from previous technological revolutions (steam, electricity, motor cars etc).

[Psamathe]

.....
May 2018: so interest rates are on hold again. Well I did say so (back in 2015). Still at 0.5% as I predicted.
.....

But at least Carney has been giving us all this crucial "Forward Guidance" so we can make appropriate financial decisions. Just a pity that his "Forward Guidance" is always totally wrong so decisions based on it are also totally wrong.

But hey, no reason why Governor of Bank of England can have a good laugh at throwing the country off corse through providing misleading advice.

Ian

[Mick F]

We have nest eggs, and they seem a little pointless these days with such pitiful interest rates.
May as well spend spend spend.

We had considered some home improvements. Re-designing the front of the bungalow was the main one, and we've got a sort of estimate of 15grand to do it. No specific written down estimate as yet, but an estimate of an estimate, but not a guestimate. I was planning to do some/much of the labouring to keep costs down.

Reading and hearing about the lovely Barbara Windsor today and how she has dementia and is 80 years old, it brought me down to Earth. I'll be 80 in only 15 years time, and I may not even make that!

Why spend 15 grand on a bungalow?
We won't get 15 grand more for it if/when we sell, so I'd rather spend 15 grand on enjoying life .................... and SWMBO agrees too.

Keeping it in the bank is a waste.

[Psamathe]

....
Reading and hearing about the lovely Barbara Windsor today and how she has dementia and is 80 years old, it brought me down to Earth. I'll be 80 in only 15 years time, and I may not even make that!

Why spend 15 grand on a bungalow?
We won't get 15 grand more for it if/when we sell, so I'd rather spend 15 grand on enjoying life .................... and SWMBO agrees too.

Keeping it in the bank is a waste.

As I've got older I've more and more appreciated that achievements are about what you do rather than what you've got.

One parent with dementia, other with delirium has really brought home to me how easily and quickly things can happen that curtail abilities and thus the importance of not wasting any of the time one has available.

When I decided to retire (very) early it was largely driven by the feeling that when I'm old and look back on my life, continuing as I then was my only reflection would have been "I worked" - and that was not acceptable. And I dreaded int thought of living in a care home looking back at wasted opportunities and wasted time and regret over not having pursued things when I could.

Ian

[Cyril Haearn]

.....
May 2018: so interest rates are on hold again. Well I did say so (back in 2015). Still at 0.5% as I predicted.
.....

But at least Carney has been giving us all this crucial "Forward Guidance" so we can make appropriate financial decisions. Just a pity that his "Forward Guidance" is always totally wrong so decisions based on it are also totally wrong.

But hey, no reason why Governor of Bank of England can have a good laugh at throwing the country off corse through providing misleading advice.

Ian

Maybe one could assume he is reliably wrong and act accordingly

[mercalia]

We have nest eggs, and they seem a little pointless these days with such pitiful interest rates.
May as well spend spend spend.

We had considered some home improvements. Re-designing the front of the bungalow was the main one, and we've got a sort of estimate of 15grand to do it. No specific written down estimate as yet, but an estimate of an estimate, but not a guestimate. I was planning to do some/much of the labouring to keep costs down.

Reading and hearing about the lovely Barbara Windsor today and how she has dementia and is 80 years old, it brought me down to Earth. I'll be 80 in only 15 years time, and I may not even make that!

Why spend 15 grand on a bungalow?
We won't get 15 grand more for it if/when we sell, so I'd rather spend 15 grand on enjoying life .................... and SWMBO agrees too.

Keeping it in the bank is a waste.

if you think you night get dementia then spend the money now - my sister in law has it bad and has to go into a home shes that bad - the first time in 50 years she has been separated from my brother, and the financial cost is crippling him. He will probably end up with very little money

[bigjim]

I'm much in the same position as Mick. We have a nest egg and my wife wants us to spend a few grand on the house. Though it suits me fine as it is and I hate DIY though I'm not bad at it. I also don't like brewing up for builders that are charging me as much a day as an Airline Pilot or Doctor earns.
Spending it now? What on? I've enough bikes that I like. My car suits me fine. I hardly drive anywhere. I've been and seen a lot of places and don't have a great desire to see much more. Long flights fill me with horror. My wife still wants to head for touristy spots in Italy but I'm a bad tourist. So do I leave it to the kids, plus the house? I'm 4 years older than Mick and time is running out. I'm not tight, I do spend and give to a couple of local charities, but I've worked hard for fifty years and I hate throwing that money, that has cost me so much time and sweat away.

[horizon]

.....
May 2018: so interest rates are on hold again. Well I did say so (back in 2015). Still at 0.5% as I predicted.
.....

But at least Carney has been giving us all this crucial "Forward Guidance" so we can make appropriate financial decisions. Just a pity that his "Forward Guidance" is always totally wrong so decisions based on it are also totally wrong.

Ian

I think he's seriously embarrassed this time round and there are probably quite a few investors who have lost money on the bet. I reckon that he and others are expecting the economy to bounce back as it always has: my theory says that it can't and won't.

[Mick F]

Our dad had dementia.
He had nothing, not even a house as he lived in council sheltered accommodation. The state paid for his care in a home.
We weren't required to pay anything, not even for his eventual funeral.
He, being of sound mind (when he had one) spent the damned lot.

In fact, he owed a few hundred to his credit card. They wrote it off as he had zero estate.
His debts were his debts. Not ours, so we weren't going to pay it.

You can't take it with you, and your debts die with you.