The UK economy, high inflation, rising interest rates, and the increasing cost of living

[James]

<b>The chairman of Tesco has warned of the hardship people will face in the wake of rising interest rates.</b>

John Allan told the BBC he was aware millions would face much higher mortgage payments while prices for food and energy were already increasing.
"We have a moral responsibility to look after people, who in the real world are being impacted by this," he said.
It comes after the Bank of England said interest rates may need to rise by more than previously expected.
Speaking on the BBC's Laura Kuenssberg programme on Sunday, Mr Allan said that it was important to focus on how recent market turmoil and rising interest rates would impact on real people.
"The reality is that the movement in interest rates is now going to lead to much higher mortgage [repayments] for millions of people," he said.
"Lots of people I think are [already] struggling with the existing elements of the cost of living crisis in food and so on."

When challenged on whether or not the business was prepared to absorb more costs to help customers struggling, Mr Allan said that the firm already was, pointing to a recent fall in profits.
Earlier in October, the supermarket giant said operating profits in its retail division fell by 10% in the six months to the end of August. However, sales across the whole group excluding its fuel business increased by more than 3%.
It also announced that its shop staff in the UK would receive another pay rise, their second this year.
The retailer now expects annual underlying earnings across the brand of between £2.4bn and £2.5bn, which is at the lower end of previous guidance.
Its chief executive Ken Murphy said that customers are trying to "make their money go further, whether they are switching from branded products, between categories or cutting back on eating out".

"We know our customers are facing a tough time and watching every penny to make ends meet," he said, although he admitted it was difficult to anticipate how customers' behaviour might change in the second half of the year.
The Bank of England currently expects that the increase in the cost of living will peak at 11% in October and then stay above 10% for a few months before starting to come down.
But its governor Andrew Bailey said in Washington on Saturday that meant a "stronger response" on interest rates than previously thought in August could be needed.
The next interest rate rise decision is on 3 November, days after the government lays out its tax and spending plans.
Mr Bailey said the Bank would not take any action on interest rates until after this new economic plan is announced, describing this as "the correct sequence" of action.
But he added that officials would not hesitate to raise interest rates to meet the inflation target of 2%.
It came just weeks after the UK's central bank hiked interest rates by 0.5% to 2.25% in late September.

https://www.bbc.co.uk/news/business-63275964

 

[MenInG]

Summary

The latest inflation figures show the cost of living went up 10.1% in the 12 months to September, driven mostly by rising food prices

It means prices are rising at their fastest rate for 40 years. The figure for August was 9.9%
September's inflation reading is important because it'll be used to help calculate April's rise in the state pension as well as increases in benefits

The government will now be under pressure to confirm if these payments will rise in line with this figure

 

[James]

<b>Soaring food prices push inflation to 40-year high</b>

UK food prices are rising at their fastest rate in 42 years as the cost of living crisis continues to squeeze household budgets.

Food costs jumped 14.6% in the year to September - the biggest rise since 1980 - with bread, cereal, meat and dairy prices all climbing.

It comes as people also struggle with higher energy and transport costs.

Overall inflation - the rate at which UK prices rise - surged to 10.1% last month and is expected to climb further.

The prices of most key items in the average household's food shopping basket went up last month, including fish, sugar, fruit and rice, the Office for National Statistics (ONS) said.

Experts say the rise in the cost of groceries has been accelerated by the war in Ukraine, which has disrupted grain, oil and fertiliser supplies from the region.

Food and drink prices have also been affected by the recent weakness in the pound, which has made imported products and ingredients more expensive.

Karen Betts, chief executive of the Food and Drink Federation, said:

"Food and drink manufacturers continue to do everything they can to keep product prices down, but huge rises in ingredient, raw material, energy and other costs mean they have no choice but to pass some price rises on."

According to the ONS, overall inflation is back at the 40-year high seen in July after dipping to 9.9% in August.

It said the cost of furniture and hotel stays had also risen - although these were partially offset by the falling price of petrol and airline tickets.

It comes as a BBC survey uncovers growing concern about the squeeze on finances.

Some 85% of those asked are now worried about the rising cost of living, up from 69% in a similar poll in January.

As a result, nine in 10 people are trying to save money by delaying putting the heating on.

The Bank of England says inflation could peak at 11% in October, after inflation figures have factored in the big rise in energy bills that came in at the start of this month.

https://www.bbc.co.uk/news/business-63301383

 

[shortbread]

Only if inflation was 10%, in real terms day to day spending for most people must have shot up by 50% at the very least!

 

[MenInG]

There has been a positive market reaction to the resignation of Liz Truss after just 44 days in office, following the fierce backlash against her economic plan and humiliating climbdown.

News that the prime minister was to make a Downing Street statement sparked a rally for sterling versus the dollar - leaving the UK currency almost a cent up on the day at one stage at almost $1.13.

It remained half a cent higher following confirmation she was to leave office.

Shares also moved upwards initially on the FTSE 100 while government borrowing costs fell.

The 30-year gilt yield fell back to 3.8% - continuing its recovery since the post mini-budget highs of around 5% that sparked Bank of England intervention. As the afternoon progressed the figure rose to the 3.9% of Thursday morning.

It took a series of U-turns on the tax-cutting growth plan, demanded by new Chancellor Jeremy Hunt after the sacking of Kwasi Kwarteng, for market damage to ease.

Prime Minister Liz Truss during a press conference in the briefing room at Downing Street, London. Picture date: Friday October 14, 2022.
The divided Tories won't find it easy choosing a new PM

The reaction to the departure of Ms Truss signalled a measure of relief that the architect of the Growth Plan - outlined during her campaign for the Tory leadership - was on her way out.

Nevertheless, there was also a measure of uncertainty at play for values, given the complete lack of vision on who would replace the prime minister in Number 10.

It will not be Mr Hunt, who has ruled himself out, leaving him free to continue preparations for the Halloween statement that is to set out the government's new medium-term fiscal plan.

There will be some jitters over whether its direction is likely to change - or even be delayed to allow the new Tory leader to get their feet under the desk.

There has been no indication that the statement will be delayed as it is expected that the successor will be in place before 31 October.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the market moves: "Sterling is highly sensitive to economic policy uncertainty and even though the ship Britannia will still be left largely rudderless, with a successor still to be chosen, as far as investors are concerned, the future is marginally brighter without her in charge.

"Ten-year gilt yields eased further today, as speculation soared about her resignation, a sign of tacit approval from the bond vigilantes who punished the UK by deserting its government's debt as worries raced up about fiscal responsibility."

Business appealed for a more stable period ahead.

Tony Danker, the director-general of the CBI, said: "The politics of recent weeks have undermined the confidence of people, businesses, markets and global investors in Britain.

"That must now come to an end if we are to avoid yet more harm to households and firms.

"Stability is key. The next prime minister will need to act to restore confidence from day one.

"They will need to deliver a credible fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy."

SKY

 

[James]

<b>First-time buyers hit by drop in mortgage deals</b>

First-time house buyers could find it more difficult to get onto the property ladder due to fewer mortgage deals with smaller deposits being on offer.

Figures from research body Moneyfacts show there were 137 mortgage offers at 95% loan-to-value on Monday, compared to 347 at the start of 2022.

The downward trend of such deals was accelerated after the mini-budget sparked turmoil on the markets.

Mortgage interest rates hit 14-year highs, but have since begun to fall.

Eleanor Williams , a finance expert at research body Moneyfacts, said first-time buyers were likely to feel the impact of the current climate "keenly" due to them often having smaller deposits and therefore favouring 95% loan-to-value mortgages.

On Monday, Moneyfacts said there were 137 95% loan-to-value mortgage products, compared to 283 on the day of the government's mini-budget.

"The mortgage sector is changeable at the moment, with the level of product choice fluctuating as lenders review their offerings and try to keep up with a changing economic outlook, which has meant that there are fewer products to choose from than there were prior to the recent fiscal announcement," Ms Williams added.

She said that with the cost of living biting into household budgets, buyers looking for a low-deposit mortgage deal would also have concerns about meeting affordability requirements.

Mortgage rates in general have been rising for months as central banks across the world try to tackle rising inflation, which is currently at 10.1% in the UK.

But when the financial markets reacted badly to government's mini-budget last month, which promised billions of pounds of unfunded tax cuts, UK rates rose even higher.

Lenders also suspended hundreds of mortgage products amid uncertainty over how to price these long term loans.

Moneyfacts said the number of all types of mortgage deals available in the UK had recovered slightly to 3,067 - down from 3,961 on the morning of then Chancellor Kwasi Kwarteng's statement.

On Monday, the largest number of deals from lenders was for 75% loan-to-value mortgages (583), the research said.

The picture could change again, with the Bank of England expected to raise interest rates again in November in an attempt to bring down the current rate of inflation.

Average two-and five-year fixed rates are currently at 6.55% and 6.43% respectively, levels not seen since the financial crisis of 2008.

At least 100,000 mortgage holders a month are coming to the end of fixed-rate deals, and face steep rises in monthly repayments.

BBC

 

[DeadlyVenom]

My brother is a first time buyer.

He bought a house that was still being built, in the North of England.

The development was delayed for a whole host of reasons, including yes you guessed it the Ukraine war.

The house is now delayed until Feb/March!!

His mortgage offer has now elapsed so he had to reapply. It went from 1.88% to 6.89%.

What a mess.

 

[shortbread]

What people fail to realise is that this 1%-2% mortgage rates are actually an anomaly. The idiots in BoE have kept the rate artificially low for decades and people were gullible enough to think this was the norm. Traditionally interest rates on mortgages hovered about the 6-8% ballpark. The BoE made the whole country addicted to cheap credit and now we're struggling withdrawal.

I think they will reverse rates towards the middle of next year, because the UK housing market does not have the fundamentals to sustain a real interest rate of above 4%. The bubble will pop and everything will come crashing down. Think we're seeing bad times, nooo.... we've seen nothing yet! So to avoid a crisis, BoE will kick the can down the road and fudge the inflation figures.

 

[shaz619]

What people fail to realise is that this 1%-2% mortgage rates are actually an anomaly. The idiots in BoE have kept the rate artificially low for decades and people were gullible enough to think this was the norm. Traditionally interest rates on mortgages hovered about the 6-8% ballpark. The BoE made the whole country addicted to cheap credit and now we're struggling withdrawal.

I think they will reverse rates towards the middle of next year, because the UK housing market does not have the fundamentals to sustain a real interest rate of above 4%. The bubble will pop and everything will come crashing down. Think we're seeing bad times, nooo.... we've seen nothing yet! So to avoid a crisis, BoE will kick the can down the road and fudge the inflation figures.

You think the current mortgage average of 6.6% will come down mid next year, what do you estimate?

Now that the mini budget has been reversed, hopefully the rates will come down at some point, but it may seem unlikely given how as you say the market had been artificially pumped.

But we may not see the record lows we were use to ever again.

 

[shaz619]

My brother is a first time buyer.

He bought a house that was still being built, in the North of England.

The development was delayed for a whole host of reasons, including yes you guessed it the Ukraine war.

The house is now delayed until Feb/March!!

His mortgage offer has now elapsed so he had to reapply. It went from 1.88% to 6.89%.

What a mess.

That’s a disgrace, has he spoken to a lawyer about this? as this was out of his control, maybe something can be agreed with the bank, if not then he may be best served dependent on his situation to wait until the rates come down, 6.89% is insane. We all thought it might get to that level next year so there may be a positive in that if it has pumped so high now, it should come down next year.

The disadvantage off course is potentially losing the home he wanted and it’s not always easy to find the right one, but if it was a new build there may be more opportunities down the line

 

[topspin]

My brother is a first time buyer.

He bought a house that was still being built, in the North of England.

The development was delayed for a whole host of reasons, including yes you guessed it the Ukraine war.

The house is now delayed until Feb/March!!

His mortgage offer has now elapsed so he had to reapply. It went from 1.88% to 6.89%.

What a mess.

That’s awful. I’m very sorry to hear that.

It’s exactly why Liz Truss should’ve had the decency to apologise during her resignation speech.

The worst UK PM of all time. Her brainless economic policies have screwed over so many.

 

[DeadlyVenom]

That’s a disgrace, has he spoken to a lawyer about this? as this was out of his control, maybe something can be agreed with the bank, if not then he may be best served dependent on his situation to wait until the rates come down, 6.89% is insane. We all thought it might get to that level next year so there may be a positive in that if it has pumped so high now, it should come down next year.

The disadvantage off course is potentially losing the home he wanted and it’s not always easy to find the right one, but if it was a new build there may be more opportunities down the line

He ha spoken to a lawyer. Unlikely something can be agreed with the bank but there is a possibility to pursue the house builders because they build has been extended way after its initial schedule. They hsd the audacity to blame Putin lol

Its unlikely the mortgage interest rates are going to come down much over the next 5 years.
[MENTION=78642]shortbread[/MENTION] is quite right when he says this is probably where it should be, ...things were just very quickly accelerated after the mini-budget.

 

[shortbread]

You think the current mortgage average of 6.6% will come down mid next year, what do you estimate?

I say this because the UK economy survives on cheap credit. The housing market cannot sustain 5-6% + mortgages, who will be able to afford houses at current prices? This will mean there will be a massive valuation correction or commonly known as house price crash! The banks hold these assets in their books at current values, negative equity will put the banks in a spot.

Even worse a over leveraged zombie companies who survive by simply servicing cheap credit. Borrow and pay the ridiculously low interest rates. Tripling of interest rates will push these organisations to bankruptcy.

BoE knows all too well that the UK economy's health cannot sustain high interest rates. We'll get a signal first week November. If BoE goes for anything less than a .75% hike, we can be sure they'll bottle it the middle of next year.

 

[IMMY69]

He ha spoken to a lawyer. Unlikely something can be agreed with the bank but there is a possibility to pursue the house builders because they build has been extended way after its initial schedule. They hsd the audacity to blame Putin lol

Its unlikely the mortgage interest rates are going to come down much over the next 5 years.

[MENTION=78642]shortbread[/MENTION] is quite right when he says this is probably where it should be, ...things were just very quickly accelerated after the mini-budget.

Your brother should definitely approach the builders and ask for a price reduction to 1. reflect the delay and 2. to take in to account the higher interest rate and potential drop in the market.

He certainly shouldn't take this lying down.

 

[Technics 1210]

On the flip side saving rates have shot up to above 4%!

 

[DeadlyVenom]

That’s awful. I’m very sorry to hear that.

It’s exactly why Liz Truss should’ve had the decency to apologise during her resignation speech.

The worst UK PM of all time. Her brainless economic policies have screwed over so many.

Thank you. He is in a reasonably decent financial position so it will not cripple him, but he will have to re-evaluate certain things, but for what? The mini-budget was reversed in 4 weeks. We are back to square one with nothing to show for it but pain for ordinary people.

And the tories have the audacity to want us to cheer them for fixing the mess they created!

Truss and Kamikwasi should be sued for negligence.

 

[DeadlyVenom]

Your brother should definitely approach the builders and ask for a price reduction to 1. reflect the delay and 2. to take in to account the higher interest rate and potential drop in the market.

He certainly shouldn't take this lying down.

A price reduction based on a drop in the market is difficult to substantiate.

Remember there isn't really a hard value for property. Its valued at what people are prepared to pay/sell their houses. It's not like land appreciates/depreciates on a scientific formula. It just depends on peoples moods.

They have instead offered him "free upgrades" - better carpet, bathroom tiles etc, but thats all stuff he doesn't really need.

He has engaged a lawyer who feels that there is a case for the developers to come to an arrangement where they pay the difference in interest prices for a period of 5 years which his original mortgage was for.

 

[shaz619]

A price reduction based on a drop in the market is difficult to substantiate.

Remember there isn't really a hard value for property. Its valued at what people are prepared to pay/sell their houses. It's not like land appreciates/depreciates on a scientific formula. It just depends on peoples moods.

They have instead offered him "free upgrades" - better carpet, bathroom tiles etc, but thats all stuff he doesn't really need.

He has engaged a lawyer who feels that there is a case for the developers to come to an arrangement where they pay the difference in interest prices for a period of 5 years which his original mortgage was for.

“ Remember there isn't really a hard value for property. Its valued at what people are prepared to pay/sell their houses”

Sounds a bit like BTC, time to buy a bag

However, I’d have considered property traditionally to be slightly more predictable and stable with it being a physical asset and also here in the UK with population growth and demand always being there, in normal times I’d have thought there’d be something out there to reasonably substantiate. But we did have a situation where people were willing to pay stupid money during covid due to stamp duty relief and also taking advantage of the record low interest rate, there’d be an ad, followed by a open house booking and sold subject to contract all within a week.

That’s good, it does seem like there is more likely to be pay off through the developer route then going down the rabbit hole with a bank

 

[shaz619]

I say this because the UK economy survives on cheap credit. The housing market cannot sustain 5-6% + mortgages, who will be able to afford houses at current prices? This will mean there will be a massive valuation correction or commonly known as house price crash! The banks hold these assets in their books at current values, negative equity will put the banks in a spot.

Even worse a over leveraged zombie companies who survive by simply servicing cheap credit. Borrow and pay the ridiculously low interest rates. Tripling of interest rates will push these organisations to bankruptcy.

BoE knows all too well that the UK economy's health cannot sustain high interest rates. We'll get a signal first week November. If BoE goes for anything less than a .75% hike, we can be sure they'll bottle it the middle of next year.

November 3rd will be interesting, some articles are indicating it could be 0.75% or higher. But as you say it’s not sustainable and if it’s this high now, it may ease up next year potentially

 

[daytrader]

British Pakistanis hit hard by multiple crises

As the fog cast by political uncertainty appears to settle with the appointment of Prime Minister Rishi Su**n***ak, one thing is clear: a long winter of financial har*dship is on the cards for households across the country.

The cost of living crisis has forced around 24 million people in Great Britain to reduce energy use at home, and 16 million to cut back on food and essentials. But among those affected, ethnic minorities fear the worst. With nine in 10 adults in Great Britain reporting higher costs of living compared to last year, a recent study shows that Pakistanis in the UK are up to 3.3 times more likely to be in relative poverty than white people.

In an analysis titled ‘Falling faster amidst a cost-of-living crisis’, think-tank Runnymede Trust wrote, “Despite only making up around 15pc of the population in the UK, more than a quarter (26pc) of those in ‘deep poverty’ (i.e. more than 50pc below the poverty line) are from a minority ethnic background.”

Since 2021, high inflation, tax increases, skyrocketing energy bills and stagnant incomes have created the perfect storm for a cost of living crisis that comes on the heels of post-pandemic hardship. Together, the increasing prices of food, electricity and fuel have delivered a heavy blow.

Even in 2008 there was a recession, but there is a night and day difference between then and now, says a mother in Birmingham

Habib Shah, a 55-year-old working as a part-time chef in a London hospital’s catering department, said families are hit hard. “Even those who have a stable income are worried.”

Based in Harrow, Shah echoes the sentiments of many within his community. Weekly grocery bills of basic items such as meat, milk and yogurt have climbed. “Our expenses are no longer covered by the balance in the bank. We have to now rely on overdrafts,” he said.

He added that monthly groceries of basic items such as meat, milk and yogurt which previously cost GBP200 are now easily over GBP300. Gas and energy bills have gone from GBP60 a month to GB158. In the winter months, they are expected to cross GBP200.

“It’s not a small difference, it’s serious. If we don’t have enough to pay bills or rent, how will we survive? What will people do about the mortgages they have taken for shops and homes?”

Saima Haroon, a stay-at-home mother living in Birm*ingham for past 20 years, said the recent rise in costs is “the most drastic in two decades”. She said the government’s decision to incre*ase food and energy prices after the pandemic and lo**c*kdown was a huge shock. The British Pakistani community has been badly affe*cted, she said, adding that “this is the story of every household” and being discussed.

“Even in 2008 there was a recession, but there is a night and day difference between then and now. Yes, prices were high then but the situation was not this bad. This double burden of food and energy prices being high are unbearable.”

Her weekly grocery bill which would usually be GBP80 pounds is now easily GBP150. “We would easily live within our budgets earlier, but now we have to think twice to shave off costs,” she said, adding that this year the family was reluctant to turn heating on even in mid-October becau**se of the impending bills.

Shugufta Naz, a beautician in Birmingham, had a similar story to share. “We have to think twice before buying each and every thing. I used to buy things I liked for the kids, but now I have stopped doing that. The bills have shaken me,” she said. As jobs are stagnant, the rising costs have presented huge challenges for both British and Indian Pakistanis, she added.

The ongoing political circus in the country doesn’t inspire much confidence.

Workforce relocation

Haroon said the situation is giving rise to conversations in Pakistani households about seeking employment in other countries. “If this continues, living in Britain will be untenable. If there are better prospects elsewhere, families will be forced to relocate.”

Research by not-for-profit organisation People Like Us revealed that “34pc of professionals from racially div*erse backgrounds say their salary won’t cover their mor*tgage, rent and energy bills”.

It added, “Working professionals from racially diverse backgrounds are nearly twice as likely to have been told they won’t be getting a promised pay rise this year due to inflation (19pc compared to 10pc of white professionals), and are now twice as likely as white professionals to think the current economic situation will increase the pay gap (26pc vs 13pc).”

“Over a third (35pc) of eth**nic minority professionals will rack up extra debt by taking out loans or spen*ding on credit cards, with nearly a third (31%) borrowing money from someone they know.”

Remittances affected

The decrease in purchasing power in the UK means families have to rethink how they spend here, if they want to continue to support loved ones back home.

According to research rel*e*ased in 2022 by WorldRemit, a digital cross border remittance business, two-fifths of Brits now send money abroad to fewer people, with another fifth reporting feeling increased pressure by loved ones to send even more money abroad.

Speaking to Dawn, Karen Jordaan, the company’s head of the UK, said, “Pakistan and the UK have both experienced skyrocketing inflation rates, creating a weaker currency in both nations, and a decreased amount that Brits can now afford to send. British senders are changing their spending be**haviour to continue to transfer money abroad. 52pc of respondents from our recent research reported going out to eat less, 19pc use public transport more than driving and 26pc attend fewer social events so that they can keep up with their obligations to provide financially for friends, family and loved ones overseas.”

Chef Shah said, “The gap is increasing and there is little to nothing left over. I used to send my mother GBP 100 every month in Pakistan, now it has dropped to GBP 60.”

DAWN

 

[IMMY69]

A price reduction based on a drop in the market is difficult to substantiate.

Remember there isn't really a hard value for property. Its valued at what people are prepared to pay/sell their houses. It's not like land appreciates/depreciates on a scientific formula. It just depends on peoples moods.

They have instead offered him "free upgrades" - better carpet, bathroom tiles etc, but thats all stuff he doesn't really need.

He has engaged a lawyer who feels that there is a case for the developers to come to an arrangement where they pay the difference in interest prices for a period of 5 years which his original mortgage was for.

I meant the delay in construction which has resulted in a higher interest rate and higher interest rates which could result in a drop in price.

The drop in price may not have occurred but I would start my negotiations for the difference in interest rates as well as any drop in value and then meet somewhere in the middle. Its easy to find what the asking price (or even the sold price) is for a similar property in a similar area unless its literally the only development in that entire region...

 

[DeadlyVenom]

I meant the delay in construction which has resulted in a higher interest rate and higher interest rates which could result in a drop in price.

The drop in price may not have occurred but I would start my negotiations for the difference in interest rates as well as any drop in value and then meet somewhere in the middle. Its easy to find what the asking price (or even the sold price) is for a similar property in a similar area unless its literally the only development in that entire region...

Legally its difficult to substantiate especially as homes have actually technically increased in price these past months. We will probably only see a 'dip' in the market next year.

The lawyer said that this could be an option if people pulled out of their purchases in that development and the sellers were forced the resell those houses at a loss.

That's unlikely as there is a shortage of houses and massive waiting lists for that development!

To add to this the scheme is partially built and people have moved in to other segments.

Sadly its just his luck that multiple factors combined but can't help feeling very angry at Liz and Kwasi.

Hopefully the legal option bears some fruit.

He cant even pull out as it will just feel like a complete waste of time and he will be starting the property hunt from day one again.

 

[James]

<b>Everyone will have to pay more tax to put the UK's public finances on a sustainable footing, the Treasury is warning.

A source said spending cuts alone would not be enough to ensure the government meets its targets on spending and debt.

Chancellor Jeremy Hunt held talks with Prime Minister Rishi Sunak on Monday, ahead of a budget on 17 November.

A Treasury source said across-the-board tax hikes were "inevitable," adding: "It is going to be rough".

The department has not put a figure on what it calls the "fiscal black hole" facing the UK, the BBC has previously been told it may be at least £50bn.</b>

Mr Hunt is now due to deliver a financial statement on 17 November, after the much-anticipated plan was pushed back by two weeks after Mr Sunak replaced Liz Truss in Downing Street.

Few concrete details of the government's plans have emerged, but reports have suggested ministers could extend a freeze on income tax thresholds, dragging more people into the higher rate.

The Daily Telegraph has reported that Mr Hunt is planning to fill the budgetary shortfall through a combination of 50% tax rises and 50% cuts to public spending.

His predecessor George Osborne, who oversaw a period of austerity after 2010, worked to a broad formula of 80% cuts and 20% tax rises.

While the Treasury said Mr Hunt and Mr Sunak "agreed on the principle that those with the broadest shoulders should be asked to bear the greatest burden," it warned that "given the enormity of the challenge, it is inevitable that everybody would need to contribute more in tax in the years ahead".

The government has sought to brace the public for the impending change of direction, after Ms Truss's mini-budget last month pushed up the cost of UK government borrowing.

The Treasury source said increased public debt to pay for Covid-19 support and help with energy costs meant "we won't be able to fill the fiscal black hole through spending cuts alone".

Ministers have not ruled out real-terms cuts to pensions and benefits by raising them below the rate of inflation, a move that could save billions.

Opposition parties have resisted such a move, and are calling on the government to increase windfall taxes on oil and gas companies.

Ms Truss had ruled out additional windfall taxes, saying they would send the "wrong message" to international investors.

But the Times has reported Mr Hunt is considering increasing the current windfall tax, and extending the end-date from 2025 to 2028.

The newspaper said officials had also been working on plans for a windfall tax on electricity generating companies - a move also demanded by opposition parties.

What is commonly called a "black hole" in the public finances refers to the amount the government would have to raise taxes by, or cut spending, to meet its medium-term financial targets.

These say that, in the third year of official economic forecasts, government debt should be falling as a share of national income, and day-to-day government spending should be met by tax revenue.

The projections are dependent on estimates about how much the economy will grow.

The size of the shortfall has shrunk slightly since Mr Hunt reversed most of the measures introduced at last month's mini-budget.

At the time, the Institute for Fiscal Studies estimated it could be as much as £62bn.

In a new report, the Resolution Foundation think tank predicted that many of the options facing the government would be "unpalatable", as more people could be pushed into the higher 40% rate of tax in a bid to make up the shortfall.

Mr Sunak is also said to be considering freezing international aid for two years, and cutting investment spending.

But analysts have already warned that there remains little scope for further cuts to public spending after years of austerity under Conservative governments.

https://www.bbc.co.uk/news/uk-politics-63465935

 

[Halaribo]

<b>Everyone will have to pay more tax to put the UK's public finances on a sustainable footing, the Treasury is warning.

A source said spending cuts alone would not be enough to ensure the government meets its targets on spending and debt.

Chancellor Jeremy Hunt held talks with Prime Minister Rishi Sunak on Monday, ahead of a budget on 17 November.

A Treasury source said across-the-board tax hikes were "inevitable," adding: "It is going to be rough".

The department has not put a figure on what it calls the "fiscal black hole" facing the UK, the BBC has previously been told it may be at least £50bn.</b>

Mr Hunt is now due to deliver a financial statement on 17 November, after the much-anticipated plan was pushed back by two weeks after Mr Sunak replaced Liz Truss in Downing Street.

Few concrete details of the government's plans have emerged, but reports have suggested ministers could extend a freeze on income tax thresholds, dragging more people into the higher rate.

The Daily Telegraph has reported that Mr Hunt is planning to fill the budgetary shortfall through a combination of 50% tax rises and 50% cuts to public spending.

His predecessor George Osborne, who oversaw a period of austerity after 2010, worked to a broad formula of 80% cuts and 20% tax rises.

While the Treasury said Mr Hunt and Mr Sunak "agreed on the principle that those with the broadest shoulders should be asked to bear the greatest burden," it warned that "given the enormity of the challenge, it is inevitable that everybody would need to contribute more in tax in the years ahead".

The government has sought to brace the public for the impending change of direction, after Ms Truss's mini-budget last month pushed up the cost of UK government borrowing.

The Treasury source said increased public debt to pay for Covid-19 support and help with energy costs meant "we won't be able to fill the fiscal black hole through spending cuts alone".

Ministers have not ruled out real-terms cuts to pensions and benefits by raising them below the rate of inflation, a move that could save billions.

Opposition parties have resisted such a move, and are calling on the government to increase windfall taxes on oil and gas companies.

Ms Truss had ruled out additional windfall taxes, saying they would send the "wrong message" to international investors.

But the Times has reported Mr Hunt is considering increasing the current windfall tax, and extending the end-date from 2025 to 2028.

The newspaper said officials had also been working on plans for a windfall tax on electricity generating companies - a move also demanded by opposition parties.

What is commonly called a "black hole" in the public finances refers to the amount the government would have to raise taxes by, or cut spending, to meet its medium-term financial targets.

These say that, in the third year of official economic forecasts, government debt should be falling as a share of national income, and day-to-day government spending should be met by tax revenue.

The projections are dependent on estimates about how much the economy will grow.

The size of the shortfall has shrunk slightly since Mr Hunt reversed most of the measures introduced at last month's mini-budget.

At the time, the Institute for Fiscal Studies estimated it could be as much as £62bn.

In a new report, the Resolution Foundation think tank predicted that many of the options facing the government would be "unpalatable", as more people could be pushed into the higher 40% rate of tax in a bid to make up the shortfall.

Mr Sunak is also said to be considering freezing international aid for two years, and cutting investment spending.

But analysts have already warned that there remains little scope for further cuts to public spending after years of austerity under Conservative governments.

https://www.bbc.co.uk/news/uk-politics-63465935

All the fault of Labour and Lib Dems, obviously.

Can't see how the excellent budget, as endorsed by Technics, has not saved this country.

 

[Technics 1210]

A trojan remainer exchequer! He will never cut taxes because he is appeasing his EU masters; less taxes means UK is more attractive for foreign investment, instead he wants to kill all competition against the wretched fascist bankrupt Eurozone.

I cannot wait till the EU destroys itself, be it economy or war - EU is half way there anyway.

 

[ex-q-zit]

Bank of England expects UK to fall into longest ever recession

The Bank of England has warned the UK is facing its longest recession since records began, as it raised interest rates by the most in 33 years.

It warned the UK would face a "very challenging" two-year slump with unemployment nearly doubling by 2025.

Bank boss Andrew Bailey warned of a "tough road ahead" for UK households, but said it had to act forcefully now or things "will be worse later on".

It lifted interest rates to 3% from 2.25%, the biggest jump since 1989.

By raising rates, the Bank is trying to bring down soaring prices as the cost of living rises at its fastest rate in 40 years.

Food and energy prices have jumped, in part because of the Ukraine war, which has left many households facing hardship and started to drag on the economy.

A recession is defined as when a country's economy shrinks for two three-month periods - or quarters - in a row. Typically, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services such as health and education.

The Bank had previously expected the UK to fall into recession at the end of this year and said it would last for all next year.

But it now believes the economy already entered a "challenging" downturn this summer, which will continue next year and into the first half of 2024 - a possible general election year.

While it will not be the UK's deepest downturn, it will be the longest since records began in the 1920s, the Bank said.

The unemployment rate is currently at its lowest for 50 years, but it is expected to rise to nearly 6.5%.

The interest rate announcement is the first since former Prime Minister Liz Truss and former Chancellor Kwasi Kwarteng unveiled their controversial mini-Budget in September.

Their plans for £45bn worth of unfunded tax cuts - much of which have been reversed - sent the value of the pound tumbling and sparked market turmoil, forcing the Bank of England to step in to restore calm.

Mr Bailey told the BBC he believed that the mini-budget had "damaged" the UK's standing internationally.

He said that at a recent International Monetary Fund gathering in Washington "it was very apparent to me that the UK's position and the UK's standing had been damaged".

That same week, Mr Kwarteng was sacked as Chancellor.

Chancellor Jeremy Hunt said: "The most important thing the British government can do right now is to restore stability, sort out our public finances, and get debt falling so that interest rate rises are kept as low as possible."

But shadow chancellor Rachel Reeves said families could not withstand such high rate rises "when we've got rising food prices, rising energy bills and now higher mortgage rates as well".

The latest rate hike - the Bank's eighth since December - takes borrowing costs to their highest in 14 years, when the UK banking system faced collapse.

The Bank believes by raising interest rates it will make it more expensive to borrow and encourage people not to spend money, easing the pressure on prices in the process.

But while its latest rate rise will be welcomed by savers, it will have a knock-on effect on those with mortgages, credit card debt and bank loans.

Michelle, 58, from East Riding in Yorkshire has a loan on a van and is nervous about rising interest rates.

"My disposable income has gone down dramatically recently and I earn more than the amount to get benefits," she told the BBC. "They need to help the middle earners."

Michelle needs the van to get to work as there's no public transport near her. But if her loan repayment costs rise she fears she'll have to give up the vehicle.

"I can work from home, but like most places my place of work wants us back in the office at least three days a week and I've had to have talks with them about how I can afford that.

"It's a 60-mile round trip, it's expensive."

Those with mortgages are also feeling nervous. 43The Bank forecasts that if interest rates continue to rise, those whose fixed rate deals are coming to an end could see their annual payments soar by up to £3,000.

It said that it would increase interest rates if inflation remained high. Financial markets had been expecting rates to peak at 5.25% but the Bank does not expect them to rise this high.

The Bank has done something it doesn't normally do in the published minutes of its decisions - it has given guidance that seems to suggest a peak in interest rates of about 4.5% next autumn.

For those with a glass half-full - this is lower than the 6% assumed just a month ago in the post mini-budget market turmoil.

While government borrowing costs and the level of the pound has somewhat recovered after a series of U-turns since, mortgage markets and business loans are still showing some stress, adding to the prolonged hit to the economy.

The forecast predicts that the unemployment rate will rise, while household incomes will come down too.

It is a picture of a painful economic period, with the UK performing worse than the US and the Eurozone.

Indeed, what was forecast as a sharp energy recession just three months ago, is now a shallower, but more prolonged energy and mortgage shock.

The Bank's rate decision comes before the government unveils its tax and spending plans under new Prime Minister Rishi Sunak at the Autumn Statement on 17 November.

On Thursday, the pound slumped 2% against the dollar and the cost of government borrowing rose in response to the Bank's warnings.

BBC

 

[shaz619]

I say this because the UK economy survives on cheap credit. The housing market cannot sustain 5-6% + mortgages, who will be able to afford houses at current prices? This will mean there will be a massive valuation correction or commonly known as house price crash! The banks hold these assets in their books at current values, negative equity will put the banks in a spot.

Even worse a over leveraged zombie companies who survive by simply servicing cheap credit. Borrow and pay the ridiculously low interest rates. Tripling of interest rates will push these organisations to bankruptcy.

BoE knows all too well that the UK economy's health cannot sustain high interest rates. We'll get a signal first week November. If BoE goes for anything less than a .75% hike, we can be sure they'll bottle it the middle of next year.

They’ve gone for .75% even without Hunt’s budget announcement, it doesn’t seem like they will bottle it in the coming months but at the same time I don’t know how the country can sustain itself, BOE indicate we may see a peak of 4.5% next autumn

 

[shaz619]

Change was expected eventually given how the market had been artificially inflated but it amazes me how sudden and swift it has been post mini budget

 

[shortbread]

They’ve gone for .75% even without Hunt’s budget announcement, it doesn’t seem like they will bottle it in the coming months but at the same time I don’t know how the country can sustain itself, BOE indicate we may see a peak of 4.5% next autumn

Well its time for the UK to swallow the tough pill, the easy money days went on for far too long.

The biggest issue is we have right now is that there are too many low quality people at the top, especially the BoE. They just stuff it with doves who will continue with the money printing agenda. Bailey comes across as the dumbest on any international forum, a common factor with most high level UK civil servants of late. He was a failed chief executive at the FCA during the whole audit irregularities crisis, noticing its turning hot up there jumped ship, cashed in the favours and got a top job at the BoE. Yes you read that right, he failed at the FCA so they then made him the Bank of England governor. That said the previous governor Carney set a very low bar.

The irony is both he and Kwasi studied 'Economic History', not ECONOMICS, neither of them are economists. So what we have running the BoE right now is a history major... and people wonder why the country is going down the dumps.

The BoE raised interest rates by 75% yet the £ kept falling vs the dollar....shows how much faith the markets have on the UK at the moment!

Rant over!

 

[Technics 1210]

GBP drops 2 cents vs USD.

1.11

 

[ElRaja]

some small points given I think people don't quite understand what happened today

firstly the pound fell not because of the raising of interest rates today, but of the rhetoric that the interest rates take time to feed into the system, and that the UK will have a fundamentally different inflationary trajectory to the US, this is seen as dovish, and laying the groundwork to pull back on hikes, whereas jermoe powell stated he saw terminal rates ending materially higher than the market had priced in, thus dollar strengthened versus pound.

secondly there is a bit of a tug of war between the BoE and government after the kwasi debacle, whilst the budget is yet to come out, my own two cents in that the BoE has taken the opportunity to put the onus on the government to be the bad guys if they want to tighten (raise taxes) despite the interest rate increase.

finally, i think i said it before, but it bears mentioning that the multifaceted nature of the drivers of inflation mean that any one of the factors changing will have a fast material negative impact on inflation, and thus i would not be surprised if the hiking rhetoric changed extremely quickly if the UK has a mild winter.

my call is terminal rates somewhere around 3.75 to 4% at the turn of the year, where ll start to see damage in the real economy, i.e. credit consumption, not just asset prices.

 

[James]

<b>Will falling gas prices mean lower bills?</b>

After soaring over the summer months, the cost of wholesale gas in the UK and Europe has fallen dramatically in recent weeks.

But it's unlikely prices will stay low for long enough to have much effect on bills, analysts say.

That's largely down to the way the market for gas works.

When gas prices rose dramatically on international markets earlier this year, households and businesses were faced with huge increases in their energy payments.

That prompted the government to step in, using taxpayer funds to cover a portion of the costs.

Until April the government's energy price guarantee scheme limits the bill for the average household to about £2,500 a year - though people who use more gas will pay more.

Since then international wholesale prices have tumbled.

In August, the UK benchmark price for gas for delivery the following day peaked at 550p a therm. Last week, it fell to just 38p.

That means the government's subsidy won't need to be as large as it would have been if wholesale prices had stayed high.

But wholesale prices are expected to go back up again as the weather gets colder.

"I do think we are in a lull just before the start of winter," explains Jack Sharples, Research Fellow at the Oxford Institute for Energy Studies.

"My expectation is that as the weather turns colder, and demand therefore increases, we will see prices rise again."

Forecasters Cornwall Insight expect that from April onwards, without further government intervention, the cap for the average household bill will rise to £3,700 - and it will remain above £3,000 until the end of next year. So despite the low prices now, consumers will still end up paying more.

Most energy suppliers will be unable to reap the full benefits of the current low prices, as much of their gas will have been bought in advance, at a higher cost.

There is no single price for gas. Instead it can, for example, be sold for delivery the following day, the following month, the following year, or for use in two years' time. The price you pay depends on the option you choose.

Businesses which expect to use a lot of gas will usually buy part of what they need months beforehand to protect themselves in case there's a sudden price spike coming up.

This process, known as hedging, allows them to fix a portion of their energy costs. They can buy more gas on top of that later if they need it at short notice.

At the moment, day ahead prices are low because there is plenty of gas around. Anyone buying right now is benefitting from those lower prices. But those who bought in advance are not.

After the recent scramble for additional supplies, European storage facilities are almost full, and tankers full of liquified natural gas (LNG) have been lying off European coastlines, waiting for access to processing facilities.

But gas being sold for delivery in the middle of winter already costs a lot more than supplies available now.

On the Dutch TTF platform, which is seen as a European pricing benchmark, gas for day-ahead delivery was trading below 30 euros per Megawatt hour at the start of this week.

But gas for delivery in February was priced at more than 130 Euros/MWh. That reflects market expectations that supplies will be tighter in the middle of winter than they are now.

That price is many times higher than would have been considered the norm before the disruptions caused by Covid and the war in Ukraine.. But at least for now storage facilities are well stocked.

"While Europe as a whole looks set to weather the storm this winter, it's becoming more and more an issue for the winter of 2023," explains Leon Izbicki, senior associate for natural gas at consultancy Energy Aspects.

Europe is increasingly reliant on liquid natural gas (LNG) imported by sea after pipeline imports from Russia were dramatically reduced.

Flows through the Nordstream 1 pipeline, which used to take gas from Russia to Germany ceased in September. Soon afterwards, the pipeline itself was badly damaged in a series of explosions.

Deliveries from Russia to Poland through the Yamal pipeline have also ceased, while experts believe supplies sent through Ukraine are also at risk.

This has triggered a big increase in demand for LNG - and means much more will be needed to refill storage facilities next year - and exposing consumers to variations in LNG prices.

"European LNG imports in January-September 2022 were already 23% higher than in the whole of 2021, and even 5% higher than in the whole of 2019," explains Mr Sharples.

This increasing reliance on LNG means that European buyers will have to pay whatever the market requires to attract cargoes which could otherwise find buyers elsewhere, particularly in Asia.

At the moment China is buying much less LNG than usual, because of the impact of Covid shutdowns on its economy. But once that demand returns, prices are likely to rise sharply.
"High prices are here to stay," says Mr Izbicki.

https://www.bbc.co.uk/news/business-63512583

 

[James]

Everyone will have to pay more tax under plans due to be announced on Thursday, Chancellor Jeremy Hunt says.

Offering a message few ministers would risk saying out loud, Mr Hunt told the BBC: "I've been explicit that taxes are going to go up."

He confirmed he would be giving details about further help for those struggling with energy bills, but warned there had to be constraints on help.

Labour accused the Conservatives of making a "total mess" of the economy.

Shadow chancellor Rachel Reeves said Mr Hunt was choosing to tax working people, while doing "little to close tax loopholes which mean some of the wealthiest don't pay their fair share".

Mr Hunt was speaking to the BBC just days before he is due to deliver his tax and spending plans in Parliament as part of the Autumn Statement.

The BBC has been told the chancellor is set to announce spending cuts of about £35bn and plans to raise £20bn in tax.

It comes as the UK faces major economic challenges, with soaring living costs and a warning from the Bank of England that the country is facing its longest recession since records began.

It also follows the mini-budget of former Prime Minister Liz Truss and her then chancellor, Kwasi Kwarteng, which led to market turmoil and a jump in government borrowing costs. Many of those policies have since been reversed by Mr Hunt.

Independent forecasts are understood to have identified a gap of around £55bn in the public finances - although some economists have questioned the size of the 'black hole'.

Speaking to the BBC, Mr Hunt acknowledged his plans would "disappoint people" - but he promised to protect the "most vulnerable".

"We have a plan to see us through choppy waters... we will make the recession we are in as short and shallow as possible."

The BBC has been told Mr Hunt is planning to freeze tax thresholds - the levels of income at which people begin to pay more tax - until 2028.

While he did not confirm these plans when appearing on Sunday with Laura Kuenssberg, the chancellor said: "I think I've been completely explicit that taxes are going to go up, and that's a very difficult thing for me to do because I came into politics to do the exact opposite."

As ever at this stage in the cycle, the occupants of the Treasury are coy about giving any specifics.

It is also abundantly clear that public services are in for a hard time - with no guarantee there'll be extra cash to help them to cope with the costs of inflation.

Some Conservatives MPs have warned against increasing taxes, with former party leader Iain Duncan Smith telling Sky News it could lead to a "deeper" recession.

Addressing the concerns of his colleagues, Mr Hunt said the previous leadership had tried that approach, "in other words a plan that doesn't show how, in the long run, we can afford it".

"We have tried that, we saw it didn't work."
With the Conservatives significantly behind in the polls, Mr Hunt and Prime Minister Rishi Sunak face a challenge in getting public backing for their proposals.

The chancellor also made clear that the support people were receiving for energy bills would come to an end for many.

The energy price guarantee had been due to last for two years, but after taking over from Mr Kwarteng, Mr Hunt announced it would expire in April.

Speaking to the BBC, he said he would set out what further support would be given to those struggling on Thursday.

However, he emphasised that future help had to be "done on a sustainable basis" and there would have to be "some constraints".

Asked if he was ditching the energy plan set out by former prime minister Boris Johnson, the chancellor said he admired Mr Johnson's "big visions" but added there were elements of "cakeism" - a reference to the phrase: "Have your cake and eat it."

He said he wanted to "deliver the exciting things he outlined" but that actions had to be credible and affordable.

During his interview, Mr Hunt also accepted that Brexit had had costs for the economy too.

Wrapped up in suggestions that there were lots of opportunities still to come, it is a rare acknowledgement from a Conservative politician.

He said the coronavirus pandemic had prevented the UK from taking advantage of opportunities open to it after leaving the European Union.

Labour's Rachel Reeves said she recognised there would be "constraints" on what the government could do, partly because of "mistakes the government has made".

However she added: "Just because you have to make difficult decisions it doesn't mean you have to make the same decisions."

She said Labour had "no plans" to raise income tax or national insurance and would focus on closing "loopholes" in the tax system.

The Liberal Democrat's Treasury spokesperson Sarah Olney said:

"Hardworking families look set to be clobbered with yet more unfair tax hikes because the Conservative party crashed the economy."

https://www.bbc.co.uk/news/uk-politics-63614124

 

[ex-q-zit]

London loses position as most valuable European stock market

Britain's stock market has lost its position as Europe's most-valued, as the economic downturn weighs on UK companies, data shows.

France has taken the top spot as the combined value of its companies' shares have been boosted by currency movements and demand for French luxury goods.

It is the first time Paris has overtaken London since records began in 2003, according to data from Bloomberg.

The UK is expected to fall into recession this year as inflation rises.

The combined value of British shares is now around $2.821 trillion (£2.3 trillion), while France's are worth around $2.823 trillion, Bloomberg calculates.

Shares in the UK's medium sized companies have been doing particularly badly, as consumers rein in their spending and businesses struggle with higher costs.

London's FTSE 250 share index - which is made up of medium sized companies - has slumped by almost 17% in the last 12 months.

One of the biggest fallers has been pub chain Mitchells and Butlers, which lost over 37% of its share value in the past year. Meanwhile, gambling company 888 has fallen 70% and retailer Marks & Spencer is down 40%.

UK firms have also been hit by a slump in the pound since Liz Truss's mini-budget, which has made it more expensive to import goods and raw materials.

By contrast, currency movements have worked in favour of French companies, Bloomberg said. France's stock market has also been boosted by its luxury goods makers, which have seen a bounce-back in demand from China.

Shares in LVMH, which owns fashion brand Louis Vuitton, have surged 22% in the last six months, while Hermes is up 37%.

Chinese shoppers accounted for around 35% of global demand for luxury goods before the pandemic, according to Bloomberg data.

Recession looms

As in other countries, energy and food prices have soared in the UK this year in part due to the war in Ukraine.

Many British homeowners have also seen a sharp rise in mortgage costs after the mini-Budget drove up UK borrowing costs.

It has added to existing problems in the economy, including a persistently weak pound and weaker trade since Brexit. The UK is the only G7 nation whose economy is still smaller than it was before the pandemic.

Between July and September, the UK economy shrunk by 0.2% and the Bank of England has warned the country faces its longest recession since records began.

Last year Amsterdam ousted London as the largest financial trading centre in Europe, although this was based on the total value of traded shares rather than companies.

BBC

 

[James]

<b>Britain's stock market has lost its position as Europe's most-valued, with France taking the top spot, data shows.</b>

A weak pound, fears of recession in the UK and surging sales at French luxury goods makers are thought to be behind the shift, according to data from Bloomberg.

It's the first time Paris has overtaken London since records began in 2003.

It comes as the UK is expected to fall into recession this year, although the French economy is also under pressure.

The combined value of British shares is now around $2.821 trillion (£2.3 trillion), while France's are worth around $2.823 trillion, Bloomberg calculates.

It marks a huge reversal of fortunes for the London Stock Exchange, which was worth about $1.4 trillion more than its Parisian rival back in 2016.

France has been catching up for some time but shares in the UK's medium sized companies have been doing particularly badly this year, as consumers cut back their spending and businesses struggle with higher costs.

London's FTSE 250 share index - which is made up of medium sized companies focused on the UK - has slumped by almost 17% in the last 12 months.

One of the biggest fallers has been pub chain Mitchells and Butlers, which lost over 37% of its share value in the past year.

Gambling company 888 has fallen 70% and retailer Marks & Spencer is down 40%.

UK firms have also been hit by a fall in the pound since Liz Truss's mini-Budget, which has made it more expensive to import goods and raw materials.

The euro has also fallen against the dollar but less sharply than the pound.

The French stock market has also been boosted by its luxury goods makers, which have seen a bounce-back in demand from China.

Shares in LVMH, which owns fashion brand Louis Vuitton, have surged 22% in the last six months, while Hermès is up 37%.

Chinese shoppers accounted for around 35% of global demand for luxury goods before the pandemic, according to Bloomberg data.

"London's loss of the top spot by stock market valuation to Paris will be seen as a blow to the City's prestige," Russ Mould from AJ Bell investors told the BBC.

"Since the [Brexit] vote in June 2016, Paris' CAC-40 index is up 47% and London's FTSE 100 has advanced by just 16% - but the gap is not down to Brexit alone.

“The London market is more heavily exposed to unpredictable sectors such as miners and oils; ones that have struggled in a zero-interest rate environment such as banks and insurers; and ones which can be seen as dour plodders, such as utilities and telecoms," Mr Mould added.

As in other countries, energy and food prices have soared in the UK this year in part due to the war in Ukraine.

Many British homeowners have also seen a sharp rise in mortgage rates after the mini-Budget drove up UK borrowing costs.

It has put pressure on consumer spending and added to existing problems in the economy, experts say, including weaker trade since Brexit.

The UK is the only G7 nation whose economy is still smaller than it was before the pandemic.

Between July and September, the economy shrunk by 0.2% and the Bank of England has warned the country faces its longest recession since records began.

Last year Amsterdam ousted London as the largest financial trading centre in Europe, although this was based on the total value of traded shares rather than companies.

https://www.bbc.co.uk/news/business-63623502

 

[MenInG]

Millions of UK households will pay more for their energy from next April under plans to cut the generosity of the government’s gas and electricity support scheme expected to be announced by Jeremy Hunt on Thursday.

borrowing will require the household energy price cap to rise from £2,500 to an expected £3,000 to £3,100.

Hunt will also announce higher windfall taxes on oil, gas and electricity firms that have seen their profits rocket after Russia’s invasion of Ukraine in February sent global energy prices soaring.

Despite the fragile state of the economy, the chancellor will say he needs to suck up to £60bn out of the economy through tax increases and spending cuts to help the Bank of England bear down on inflation.

He is expected to lower the threshold at which people start paying the 45p top rate of income tax from £150,000 to £125,000, in a substantial change of direction from the later-abandoned move to abolish the rate under Liz Truss’s government.

There are expected to be increases in capital gains tax and dividend tax, while personal tax thresholds are also likely to be frozen for a further two years from 2025-26. Council tax could also increase, as the rule limiting councils to 3% rises unless they have a referendum could be raised to 5%.

https://www.msn.com/en-gb/news/ukne...sedgntp&cvid=ffa93a9d26fc4d08abadd2c38e7c1261

 

[Robert]

First power cut round my way tomorrow.

 

[Robert]

The UK is the only G7 nation whose economy is still smaller than it was before the pandemic.

Brexit is the reason.

All European nations went through the pandemic and the Ukraine war fuel issues, but only one chose to raise trade sanctions against itself.

 

[James]

Autumn Statement today from Mr Hunt.

Interested to see how this one plays out.

 

[shortbread]

Sad state of affairs, afraid what the country is headed towards!

Earning a decent wage and saving assets seems to be a crime in the UK now. Governments are supposed to inspire people to work harder.

 

[Technics 1210]

Tories are toast.

This is coming from a Tory supporter.

Markets are not impressed with Hunt’s Autumn statement either, GBP down 1% vs USD.

Next year will make this year look like a summer picnic.

 

[JaDed]

Sad state of affairs, afraid what the country is headed towards!

Earning a decent wage and saving assets seems to be a crime in the UK now. Governments are supposed to inspire people to work harder.

My uncle a British citizen told me this 2 years ago , apparently there is no incentive to be an entrepreneur or create additional sources of income.
I can only how how bad would Labor be when they come back next year.

 

[Cpt. Rishwat]

Brexit is the reason.

All European nations went through the pandemic and the Ukraine war fuel issues, but only one chose to raise trade sanctions against itself.

We also cut ourselves off from our neighbours effectively, not to mention being part of an EU bloc which gave us real bargaining power. Logistically it was a disaster.

 

[KingKhanWC]

First power cut round my way tomorrow.

Already?

Were you informed by letter , phone and did they state how long and how often this will be?

 

[Technics 1210]

Global Financial Banking Crisis 2008, 14 years of ZIRP and QE, Covid Pandemic, Global Supply Chain issues, Ukraine War, Food-Energy-Product inflation, cost-of-living crisis.

ALL of the above - because of Brexit, racists, brown fudgies, milky bars, and coconuts, according to liberals and remoaners.

 

[MenInG]

Families face "real challenges", Jeremy Hunt has warned, as government forecasters predict the biggest drop in living standards since records began.

The Office for Budget Responsibility says household income will fall by 7% over the next 18 months.

The chancellor said tax rises and a spending squeeze in his Autumn Statement would help tame inflation which he said had caused the drop.

But Labour said he had picked the nation's pockets with "stealth taxes".

Shadow chancellor Rachel Reeves described the emergency budget measures as "an invoice for the economic carnage" created by Prime Minister Liz Truss's mini-budget.

In a sombre statement lasting just under an hour, Mr Hunt undid much of the tax-cutting mini-budget unveiled by his predecessor as chancellor, Kwasi Kwarteng, only 55 days ago.

It was deliberately stripped of surprises and political theatre, with many of the announcements having been trailed in the media beforehand.

Under key measures announced:

Tax thresholds will be frozen until April 2028, meaning more people will pay tax
Spending on public services in England will rise more slowly than planned - with some departments facing cuts after the next election
The state pensions triple lock will be kept, meaning pensioners will get a record £780 increase
The household energy price cap has been extended for one year beyond April but made less generous, with typical bills capped at £3,000 a year instead of £2,500
There will be additional cost-of-living payments for the "most vulnerable", with £900 for those on benefits, and £300 for pensioners
The top 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000
UK minimum wage for people over 23 to increase from £9.50 to £10.42 an hour
The windfall tax on oil and gas firms will increase from 25% to 35%, raising £55bn from this year until 2028
Speaking afterwards, Mr Hunt told the BBC's political editor Chris Mason his plan would bring down inflation, while protecting public services.

"These are real challenges for families up and down the country," he said adding: "I'm not pretending these aren't going to be difficult times, but there's a plan, there's hope - and if we follow this plan, if we stick with it, we can get through to the other side.

"We need to be sensible about the way we do this. We don't want to make the recession worse."

The chancellor announced extra money for schools, the NHS and social care in England for the next two years.

Mr Hunt denied that he had been forced to raise taxes and reduce spending because of the turmoil caused by Ms Truss's mini-Budget.

He said there had been mistakes, but insisted the government had "corrected those within weeks".

He argued that other countries, such as Germany, France and America were all facing similar problems as a result of the conflict in Ukraine and rising energy prices.

And he denied he'd postponed difficult decisions, with the squeeze on government departments to come.

BBC

 

[Cpt. Rishwat]

Global Financial Banking Crisis 2008, 14 years of ZIRP and QE, Covid Pandemic, Global Supply Chain issues, Ukraine War, Food-Energy-Product inflation, cost-of-living crisis.

ALL of the above - because of Brexit, racists, brown fudgies, milky bars, and coconuts, according to liberals and remoaners.

It's fudge brownie mate, as in the Ben & Jerry ice cream flavour. If you are going to adopt the wonderful imagery of such language do me the favour of getting it right.

 

[Technics 1210]

It's fudge brownie mate, as in the Ben & Jerry ice cream flavour. If you are going to adopt the wonderful imagery of such language do me the favour of getting it right.

Do you a favour, or do you a flavour?

 

[daytrader]

Pubs fear they may have to close for good without more energy bill support, industry bosses warn
Industry experts say the economic shocks of COVID, Brexit and the war in Ukraine have put sustained pressure on businesses, especially those in the entertainment sector - and now the energy crisis may prove the tipping point.

Many pubs and breweries across the UK will be forced to shut their doors for good unless they receive further energy support, industry bosses have warned.

In a new report by Frontier Economics, produced for the British Beer and Pub Association (BBPA), calculations showed energy bills returning to their regular rate after the government's bill relief scheme ends in March would put pubs and brewers at a loss of 20% on average.

It showed energy costs are the biggest threat to their viability and "would be even more lethal" when the relief scheme ends.

This comes on top of cost inflation across other parts of their businesses, including on food and drink, key commodities and wages.

Gemma Gardener, who runs The York Hotel, a pub with rooms in Morecambe, said: "Not only are our energy bills extortionate, but our supplier has also added on extra unexpected charges outside our standard rates as well, from a £2,000 installation fee to doubling our daily hire charge unexpectedly.

"We have tried to switch suppliers but been rejected, and the only reason we're able to keep going is because our pub company is helping us through.

"We're struggling with our bills but so are our customers as well, and so we're being squeezed at both ends.

"We've even started offering free food to encourage customers to come in and buy drinks."

Emma McClarkin, chief executive of the BBPA, said: "A long-term guarantee that energy costs and contracts will be fair and reasonable come the spring cannot come soon enough for our pubs and brewers.

"This report demonstrates the unique position our sector finds itself in, vulnerable to cost inflation across the entirety of its supply chain and acutely conscious of declining consumer confidence and wanting to avoid increasing prices for struggling customers."

Sustained pressure

Tim Black, associate director in Frontier Economics' retail and consumer, said: "Recent economic shocks of COVID, Brexit and the war in Ukraine have put sustained pressure on businesses.

"Our analysis shows the pub & brewery sector is facing a combination of surging costs - primarily energy but also raw materials and wages - and falling demand, as consumers reduce their spending in the face of severe cost-of-living pressures.

"While there are different impacts across businesses and uncertainty on the outlook, the underlying economics of the sector makes absorbing these shocks incredibly difficult - and some firms will struggle to survive."

SKY

 

[James]

<b>Cost of living: House prices drop by 2.3% in a month - Halifax</b>

UK house prices saw their biggest drop in 14 years in November, falling 2.3%, reflecting "volatility" in the market, according to mortgage lender Halifax.

November marks the third month in a row during which prices have fallen with potential buyers playing safe by delaying purchases.

The average UK house price in November was £285,579.

Higher mortgage rates, economic uncertainty, and the rising cost of living are all affecting the market.

The annual rate of growth in property prices has now dropped from 8.2% to 4.7%.

Kim Kinnaird, director of Halifax Mortgages, said: "While a market slowdown was expected given the known economic headwinds - and following such extensive house price inflation over the last few years, this month's fall reflects the worst of the market volatility over recent months.

"Some potential home moves have been paused as homebuyers feel increased pressure on affordability and industry data continues to suggest that many buyers and sellers are taking stock while the market continues to stabilise."

However, she said that the falls should be put into context, given the rapid increase in property prices in the last few years.

Property prices were up more than £12,000 compared with this time last year, and £46,403 higher than in March 2020 when the Covid pandemic began.

The Halifax said Wales and the South West of England had recorded particularly sharp slowdowns in annual house price growth.

Both had been at the forefront of house price inflation during the pandemic, when the so-called race for space among buyers boosted demand for rural or coastal properties.

The Halifax survey, based on the lender's own data, comes shortly after the rival Nationwide Building Society said prices fell 1.4% from October to November - the largest month-on-month fall since June 2020.

Mortgage rates are much higher than at any time during the last decade, although earlier this week, the average rate on a new, fixed-rate two or five-year deal fell below 6% for the first time for two months.

Tomer Aboody, director of property lender MT Finance, said: "With another fall in property prices in November, buyers and sellers are clearly demonstrating more caution due to higher mortgage rates and the ever-rising cost of living.

"As with any fall in pricing, buyer sentiment and confidence is key. But considering the macro-economic and seasonal factors affecting all consumers, along with the month-on-month increases seen over the past 18 months or so, the decline needs to be put into context as it is still minimal."

https://www.bbc.co.uk/news/business-63886983

 

[daytrader]

'Cause for concern' - millions can't afford to heat their homes as 'dangerously cold' weather arrives
Vulnerable people are being advised to heat their homes to at least 18C, wear extra layers of clothing and eat hot food to protect themselves - but many cannot afford to.

More than three million low-income households cannot afford to heat their homes during the current spell of cold weather - putting their health at risk, according to new research.

It comes as the Met Office warns that an Arctic blast is hitting the UK, which could cause overnight temperatures as low as -10C by the end of the week.

Motorists could face treacherous conditions on the roads, with train journeys taking longer than usual.

The UK Health and Security Agency has issued a cold weather alert - and says vulnerable people should heat their homes to at least 18C, wear extra layers of clothing, and eat hot food to protect themselves.

But about 710,000 households cannot afford to follow this advice because they cannot pay for warm clothing, heating and food, and another 2.5 million families on low incomes are going without.

The research was carried out by the Joseph Rowntree Foundation, and its senior economist Rachelle Earwaker said: "The dangerously cold weather on the horizon is cause for concern.

"People are being forced to wager their financial health and whether they can afford more debt, against their wellbeing without sufficient heat, clothing or hot food."

The survey of 4,251 people in the bottom 40% of incomes suggested that about 4.3 million have cut the amount they spend on heating.

It also found that many families are already behind on their bills, owing more than £1,600 on average.

And temperatures are likely to remain low for some time yet.

'Arctic maritime airmass': Snow and ice forecast

The Met Office has extended yellow weather warnings into Thursday and Friday, with ice expected in much of Northern Ireland, Wales, parts of northern England and most of England's eastern and western coastal areas.

The northern half of Scotland is likely to see snow and ice on both days, the forecaster said.

Met Office chief meteorologist Steve Willington said: "As an Arctic maritime airmass settles across the UK, temperatures will fall with widespread overnight frosts, severe in places, and daytime temperatures only a few degrees above freezing.

"However, the cold air from the Arctic will also bring brighter conditions, with some dry, sunny spells, particularly away from the coast and where winds are light it could feel pleasant in the sunshine. Some patchy freezing fog is also likely.

"Showers will turn more wintry with an increasing risk of snow as the week progresses, particularly in coastal areas or over higher ground."

Sky News

 

[James]

<b>Millions face £250 monthly mortgage rise next year</b>

About four million UK households will face higher mortgage payments next year, the Bank of England has said, with the typical payment up by £250.

The average monthly mortgage bill would go up from £750 to £1,000, the Bank's Financial Stability Report said.

The rising cost would cause severe financial difficulties for another 220,000 households, the Bank said.

Businesses would also be under "significant pressure" owing to rising prices and borrowing costs, it added.

"Falling real incomes, increase in mortgage costs and higher unemployment will place significant pressure on household finances and weigh on their ability to service debt," Bank of England governor Andrew Bailey said in a letter to the Treasury.

The Bank also warned of an increased danger of global financial risks.

However, it said that households, businesses and banks were more resilient than before the global financial crisis of 2008 and the recession of the 1990s.

Fixed-rate mortgage deals have a set interest rate during the term of the deal. Most run for two or five years, but longer deals are available.

Anyone coming to the end of their fixed-rate deal and looking for a new one, or first-time buyers taking out their first mortgage, have seen these loans become much more expensive than they had probably expected or planned for.

Rates on new fixed-rate deals have climbed throughout this year, as the Bank put up interest rates to fight inflation, but they shot up following the mini-budget, peaking at 6.65%.

However, they stabilised then fell slightly in the run-up to, and after, Chancellor Jeremy Hunt's Autumn Statement which calmed the markets and, in turn, eased uncertainty for lenders and borrowers.

Variable or tracker rate mortgages can change at any time, usually in response to decisions made by the Bank's Monetary Policy Committee on the benchmark Bank rate.

Through the different forms of home loan, an estimated four million households would see their mortgage costs rise next year, the Bank said.

A further two million would see higher costs by 2025, adding to headwinds facing the housing market.

Within three years, 70% of mortgage holders would see their payments increase.

Meanwhile, property prices have fallen for three months, the sharpest downturn since the global financial crisis more than a decade ago.

The Bank said buy-to-let investors were particularly vulnerable, as about 85% of mortgages to landlords were interest only, making them highly sensitive to rising borrowing costs.

It warned that landlords would either raise rents for tenants or sell off their properties, causing a deeper fall in house prices.

"Were landlords to seek to offset the projected rise in buy-to-let mortgage costs, it was estimated they would need to increase their rental income by around 20%," the Bank's report said.

“This would increase the cost of housing for renters."

— BBC News

 

[daytrader]

Major travel disruption expected in UK as strike of nearly 40,000 rail workers begin
Tens of thousands of rail workers to walk out 2 days this week amid freezing weather

A 48-hour UK rail strike began on Tuesday after the Rail, Maritime and Transport Union (RMT) rejected a pay offer.

About 40,000 rail workers across 14 train companies will walk out on four days this week amid freezing weather, with commuters facing significant travel disruptions, especially students having difficulty taking trains to school.

The industrial action will continue until Saturday, followed by further action from Christmas Eve (Dec. 24) until Dec. 27 and two more 48-hour strikes at the beginning of January.

Network Rail is warning passengers to travel only if absolutely necessary as cold weather, including snow, ice, and fog, continues to cause disruptions across the UK.

Network Rail bosses accused the union of "playing fast and loose with peoples' Christmas plans."

But RMT General Secretary Mick Lynch said: "The government is refusing to lift a finger to prevent these strikes and it is clear they want to make effective strike action illegal in Britain. We will resist that and our members, along with the entire trade union movement, will continue their campaign for a square deal for workers, decent pay increases and good working conditions."

Network Rail made an offer of a 5% pay rise this year and a 4% pay rise in 2023, but Lynch called the deal "substandard," and its members have refused it.

Britain is facing a fresh wave of industrial action, including by nurses, postal workers, and university lecturers, sparked by a bitter cost-of-living crisis triggered by soaring inflation and a deteriorating economy.

UK annual inflation jumped to 11.1% in October from 10.1% in September, its highest since October 1981, leading to a fall in real wages.

Express Tribune

 

[daytrader]

Largest nursing strike in NHS history starts

Nurses in England, Wales and Northern Ireland have started a nationwide strike in the largest action of its kind in NHS history.

Staff will continue to provide "life-preserving" and some urgent care but routine surgery and other planned treatment is likely to be disrupted.

The Royal College of Nursing said staff had been given no choice after ministers refused to reopen pay talks.

The UK government said the RCN's 19% pay rise demand was unaffordable.

RCN general secretary Pat Cullen has called on the government to "do the decent thing" and resolve the dispute before the year ends.

Ms Cullen told BBC Breakfast the strike marked "a tragic day in nursing".

"We need to stand up for our health service, we need to find a way of addressing those over seven million people that are sitting on waiting lists, and how are we going to do that? By making sure we have got the nurses to look after our patients, not with 50,000 vacant posts, and with it increasing day by day," she said.

Health Minister Maria Caulfield, a former nurse, accepted "it is difficult" living on a nurse's wage, but said that a 19% pay rise "is an unrealistic ask".

The action will involve nurses in around a quarter of hospitals and community teams in England, all health boards in Northern Ireland and all but one in Wales. Nurses are not striking in Scotland.

Under trade union laws, the RCN has to ensure life-preserving care continues during the 12-hour strike.

Chemotherapy and kidney dialysis should run as normal, along with intensive and critical care, children's accident and emergency and hospital neonatal units, which look after newborn babies.

Beyond that, it will be up to NHS boards and trusts to negotiate services on a local level, with discussions likely to come down to the circumstances of some individual patients.

The biggest impact is likely to be in pre-booked treatment such as hernia repair, hip replacements or outpatient clinics.

The NHS has said it is "vital" people continue to come forward for emergency care during the strikes and anyone not contacted to reschedule an appointment should attend as planned.

"Nurses have had enough - we are underpaid and undervalued," nurse anaesthetist and local RCN steward Lyndsay Thompson, from Northern Ireland, says.

"Yes, this is a pay dispute but it's also very much about patient safety.

"The fact we cannot recruit enough nurses means patient safety is being put at risk."

Ms Thompson, who has worked as a registered nurse for 12 years, says her colleagues "absolutely do not want to strike" but feel the need to take action "to protect the NHS" after a period of below-inflation pay rises.

"We just feel we have no other option, because the government is not listening to us," she says.

The RCN balloted more than 300,000 nurses across individual NHS trusts and boards rather than in a single, national vote.

This means some nurses are not entitled to take industrial action, because the turnout in their local area was too low.

In England, the first round of strikes will go ahead in 51 of 219 hospitals, mental-health trusts and community services.

Strikes are also going ahead in all of Northern Ireland's health boards and all but one in Wales, the Aneurin Bevan.

Most GP services will be unaffected, as nurses working directly for practices were not entitled to take part in the vote, but the strike will include district nurses working in people's homes or community settings.

A second day of strike action will go ahead on 20 December, unless there is a breakthrough in talk


BBC

 

[ex-q-zit]

UK interest rates raised to highest level for 14 years

The Bank of England has raised UK interest rates to their highest level for 14 years as it battles to stem soaring prices.

It increased them to 3.5% from 3%, marking the ninth time in a row it has hiked interest rates.

The rise will mean higher mortgage payments for some homeowners and those with loans at a time when many people are struggling with the cost of living.

It should also benefit savers, if banks pass on the higher rate to customers.

The Bank of England has been attempting to calm rising prices since the end of last year.

Inflation - the rate at which prices rise - has been increasing at its fastest rate for 40 years as the cost of food and energy soars.

Raising interest rates should, in theory, encourage people to borrow and spend less and save more. This should help bring down the rate of inflation.

At 10.7%, the inflation rate remains more than five times higher than the Bank's 2% target, but it eased slightly in November.

Bank of England Governor Andrew Bailey said it was the "first glimmer" that soaring price rises were starting to come down but there was still "a long way to go".

Announcing its latest rise, the Bank indicated it was likely to continue to increase interest rates next year.

It means that homeowners with variable rate mortgages or first-time buyers looking to get on the property ladder could face higher costs.

Following the most recent rate rise, people on a typical tracker mortgage will pay about £49 more a month while homeowners with a standard variable rate mortgage face a £31 jump.

'My mortgage has gone up by £120'

Clive Turner, who works in customer services, is one of many borrowers hit by rising rates as their fixed rate mortgage deal comes to an end.

He and his partner were paying a rate of 3.48% before their five-year deal expired, amounting to payments of around £628 a month.

But the 48-year-old is now paying 5.76% on a new fixed-rate deal with payments of £750 a month - a £120 increase. His gas and electricity bills have also gone up, he said.

"I just wanted to fix it, take the hit, and hopefully at the end of the five years we will get something better," he said.

Mr Bailey said: "I know that high interest rates have a real impact on people's lives but by raising interest rates we can bring inflation down sooner."

The Bank's rate-setting committee expects inflation to fall "quite sharply" by the middle of next year. "Raising rates is the best way we have of making sure that happens," he said.

The Bank of England has to balance increasing borrowing costs without causing the economy to slow too much.

The UK is already believed to be in recession due to the impact of soaring prices on businesses and consumers.

A recession is defined as when a country's economy shrinks for two three-month periods - or quarters - in a row.

Typically, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services such as health and education.

However, the Bank said it believed the economy would perform better than expected between October and December - shrinking by 0.1% in the final three months of the year rather than 0.3% as previously thought.

It comes as millions of people are under pressure as the cost of living rises and wages fail to keep up.

Regular pay grew by 6.1% in the three months to October, according to the latest official figures. But taking inflation into account, wages actually fell by 2.7%.

'Tough times'

Chancellor Jeremy Hunt said high inflation was a global problem and indicated raising public sector pay could make the situation worse. Anger over how it has lagged behind soaring prices has led to widespread strikes.

"I know this is tough for people right now, but it is vital that we stick to our plan, working in lockstep with the Bank of England as they take action to return inflation to target," he said.

"The sooner we grip inflation the better. Any action which risks permanently embedding high prices into our economy will only prolong the pain for everyone, stunting any prospect of economic recovery."

But Labour's shadow chancellor Rachel Reeves said today's rate hike was further evidence the government had lost control of the economy.

She accused the Conservatives of "harming growth, and leaving millions of working people paying a Tory mortgage penalty for years to come".

Defending its latest rate hike, the Bank said it had seen evidence of firms raising wages to recruit workers and warned if this continued it would require it to raise interest rates faster and further.

In total six of the nine Monetary Policy Committee members who decide on interest rates voted in favour of the rise to 3.5%.

However, two others said it was now time to halt rate rises entirely, while one argued for an even sharper increase.

Other countries have also been putting up interest rates to tackle soaring inflation.

On Wednesday, the US central bank increased the target range for its benchmark rate by 0.75 percentage points to 4.25%-4.5% - the highest it has been in 15 years.

And on Thursday, the European Central Bank put up rates for countries that use the euro by half a percentage point to 2.5%.

BBC

 

[daytrader]

New car sales hit lowest level since 1992 but supply woes 'beginning to ease'
The automotive industry believes it can achieve double-digit growth in 2023 as a global parts shortage begins to ease, enabling more models to be built.

The number of new cars sold in the UK last year tumbled to its lowest level since 1992 but the sector says supply shortages, which have held sales back, are "beginning to ease".

Preliminary data for 2022 released by the Society of Motor Manufacturers and Traders (SMMT) showed around 1.61 million new cars were registered.

The figure is 2% down on the previous 12 months and 25% down on pre-pandemic levels.

However, sales improved as the year progressed.

The market recorded its fifth consecutive month of growth in December.

...
https://news.sky.com/story/new-car-...92-but-supply-woes-beginning-to-ease-12779810

 

[shaz619]

What would you guys do with any savings in the current situation assuming you manage to establish an emergency fund (3 months minimum):

- Make a mortgage overpayment: Although this is unlikely to impact your LTV significantly (access to the 60% LTV rates may take a while) and rates would be going up when you remortgage eventually, but you reduce your overall interest

- Consider investing in a buy to let: Am not sure if the ship has sailed with this at this stage, but this may also involve liquidating an ISA which is just breaking even and trying to put enough together for a 25% deposit on a property no more than 100-130k, property has historically gone up and is fairly stable, but getting in now must be tougher and then there is tax and management aspect to

- Keep your cash in a savings account and continue to gain interest on it, with BOE hikes, interest you can gain is pretty good. And also keep your ISA open and its contributions.

- Look into REITS and invest in them, you miss out on the leaverage from a buy to let, but investing in REITS comes with less risk in the current climate
[MENTION=491]IMMY69[/MENTION] [MENTION=1842]James[/MENTION] [MENTION=7774]Robert[/MENTION] [MENTION=51465]DeadlyVenom[/MENTION] [MENTION=78642]shortbread[/MENTION] and others in this thread

 

[DeadlyVenom]

I would make the mortgage overpayments.

Buy to lets seem highly unattractive at the moment.

Buy a bitcoin too so you remain up to date with the memes.

 

[Robert]

What would you guys do with any savings in the current situation assuming you manage to establish an emergency fund (3 months minimum):

- Make a mortgage overpayment: Although this is unlikely to impact your LTV significantly (access to the 60% LTV rates may take a while) and rates would be going up when you remortgage eventually, but you reduce your overall interest

- Consider investing in a buy to let: Am not sure if the ship has sailed with this at this stage, but this may also involve liquidating an ISA which is just breaking even and trying to put enough together for a 25% deposit on a property no more than 100-130k, property has historically gone up and is fairly stable, but getting in now must be tougher and then there is tax and management aspect to

- Keep your cash in a savings account and continue to gain interest on it, with BOE hikes, interest you can gain is pretty good. And also keep your ISA open and its contributions.

- Look into REITS and invest in them, you miss out on the leaverage from a buy to let, but investing in REITS comes with less risk in the current climate

[MENTION=491]IMMY69[/MENTION] [MENTION=1842]James[/MENTION] [MENTION=7774]Robert[/MENTION] [MENTION=51465]DeadlyVenom[/MENTION] [MENTION=78642]shortbread[/MENTION] and others in this thread

Fortunately I have got rid of my mortgage, being an old geezer now, and am looking to increase retirement savings.

Inflation is taking a chunk out of it though. I can’t do much about that, except save more when I can.

My pension and ISA have taken a hit due to Brexit / COVID / Truss / War but I am holding my nerve with an aggressive investment portfolio, as the fund manager is buying up more units cheaply, and every bear market in the last hundred years is followed by a corresponding bull. This bear has been a difficult and tenacious beast but it can’t last. They never do.

 

[shaz619]

I would make the mortgage overpayments.

Buy to lets seem highly unattractive at the moment.

Buy a bitcoin too so you remain up to date with the memes.

Yes overpayments seems like the best bet.

I cut my losses in crypto but am looking to make a comeback but this time am going to just buy small amounts and focus on the heavyweights such as BTC and ETH, maybe something like 5% off a portfolio overall

 

[shaz619]

Fortunately I have got rid of my mortgage, being an old geezer now, and am looking to increase retirement savings.

Inflation is taking a chunk out of it though. I can’t do much about that, except save more when I can.

My pension and ISA have taken a hit due to Brexit / COVID / Truss / War but I am holding my nerve with an aggressive investment portfolio, as the fund manager is buying up more units cheaply, and every bear market in the last hundred years is followed by a corresponding bull. This bear has been a difficult and tenacious beast but it can’t last. They never do.

Many congrats getting rid of your mortgage, did you achieve that more recently or a while back?

Yes, it seems wise to keep a hold of the ISA now and buy more bits during the sale. Were you more inclined to have an aggressive strategy now because you are closer to retirement (hopefully) or would you have had a more moderate approach if you were still some time away from riding off into the sunset

 

[Technics 1210]

Recession, economic crash, companies collapsing, high rates - fantastic money making opportunities.

I am buying PUT OPTIONs across the board and leveraging up!

 

[James]

[MENTION=46929]shaz619[/MENTION] overpay on the mortgage, the more equity we have in our properties the better imo.

 

[KingKhanWC]

Reduce money in your bank.

Buy hard assets.

The problem is sadly it seems a planned attack on the Western economies, the powers that be want the west to no longer be economic superpowers. I think its too late, you wont see a rebound as in previous decades. I hope Im wrong on this.

 

[shaz619]

Reduce money in your bank.

Buy hard assets.

The problem is sadly it seems a planned attack on the Western economies, the powers that be want the west to no longer be economic superpowers. I think its too late, you wont see a rebound as in previous decades. I hope Im wrong on this.

What would be your top hard assets in the UK?

Yes, agree on reducing £ in the banks especially beyond emergency fund etc

 

[shaz619]

[MENTION=46929]shaz619[/MENTION] overpay on the mortgage, the more equity we have in our properties the better imo.

Yes most certainly and especially if we can get the LTV below 50% and potentially release some equity if in a good position

 

[KingKhanWC]

What would be your top hard assets in the UK?

Yes, agree on reducing £ in the banks especially beyond emergency fund etc

Im personally going for silver, its affordable and imo by 2025 at the minimum will likely double. Currently you can buy at around $24-25 per ounce. Its estimated to double to $48-50 per ounce by 2025. Some estimate due to the global conditions it will reach $100 or more by 2025. In only two years this is a huge profit gain.

I am also thinking of buying silver and making silver coins where people can quickly use to buy basic goods if paper money collapses. I would mint them but the cost is high , however if you make a silver coin over 7.7g you can get the Assay office, which is based in Birmingham to hallmark it for authenticity, which will help selling them.

Gold is also good but Putin and others are buying it all. lol. Clearly they know something is about to go down soon and not just because they want to use the Gold Standard backing for their own currency.

 

[shaz619]

Im personally going for silver, its affordable and imo by 2025 at the minimum will likely double. Currently you can buy at around $24-25 per ounce. Its estimated to double to $48-50 per ounce by 2025. Some estimate due to the global conditions it will reach $100 or more by 2025. In only two years this is a huge profit gain.

I am also thinking of buying silver and making silver coins where people can quickly use to buy basic goods if paper money collapses. I would mint them but the cost is high , however if you make a silver coin over 7.7g you can get the Assay office, which is based in Birmingham to hallmark it for authenticity, which will help selling them.

Gold is also good but Putin and others are buying it all. lol. Clearly they know something is about to go down soon and not just because they want to use the Gold Standard backing for their own currency.

Do you think there is any value in owning the paper asset version for these metals; shares, stocks and ETF’s etc? or significantly more to be gained from the physical asset. Where would would say is the best place to start buying for a beginner? My experience is limited to asian jewellery shops

I would imagine gold must be super expensive to acquire especially now but it’s certainly a safe bet and I agree there is something brewing unfortunately. Nice one bro

 

[KingKhanWC]

Do you think there is any value in owning the paper asset version for these metals; shares, stocks and ETF’s etc? or significantly more to be gained from the physical asset. Where would would say is the best place to start buying for a beginner? My experience is limited to asian jewellery shops

I would imagine gold must be super expensive to acquire especially now but it’s certainly a safe bet and I agree there is something brewing unfortunately. Nice one bro

There is value and money can be made but the problem is a crash could take place while you're asleep. lol. See the FTX scandal, people lost huge sums.

Royal Mint is a good one for beginners, as its official, you wont have to worry, already officially confirmed etc. You'll be paying more than the price due to VAT. Eg. You will pay around £150 more but it can be delivered to your door. They can also keep it in a safe but I would rather have it in my hands. You can also sell back there. There are other outlets but only go there after extensive research. Do your research bro, talk to investors and talk to those who sell it.

https://www.royalmint.com/basket-page/

Sadly the world is about to hit hard in the next few years. Id rather not rely on numbers on my computer when one day I could wake up and see a zero lol.

 

[Technics 1210]

Im personally going for silver, its affordable and imo by 2025 at the minimum will likely double. Currently you can buy at around $24-25 per ounce. Its estimated to double to $48-50 per ounce by 2025. Some estimate due to the global conditions it will reach $100 or more by 2025. In only two years this is a huge profit gain.

I am also thinking of buying silver and making silver coins where people can quickly use to buy basic goods if paper money collapses. I would mint them but the cost is high , however if you make a silver coin over 7.7g you can get the Assay office, which is based in Birmingham to hallmark it for authenticity, which will help selling them.

Gold is also good but Putin and others are buying it all. lol. Clearly they know something is about to go down soon and not just because they want to use the Gold Standard backing for their own currency.

Ditto.

Also check out Palladium. Germany has just announced it will soon open a Hydrogen power plant, and where there is Hydrogen, there is Palladium. Plus Russia has the largest deposits of Palladium!

 

[shaz619]

There is value and money can be made but the problem is a crash could take place while you're asleep. lol. See the FTX scandal, people lost huge sums.

Royal Mint is a good one for beginners, as its official, you wont have to worry, already officially confirmed etc. You'll be paying more than the price due to VAT. Eg. You will pay around £150 more but it can be delivered to your door. They can also keep it in a safe but I would rather have it in my hands. You can also sell back there. There are other outlets but only go there after extensive research. Do your research bro, talk to investors and talk to those who sell it.

https://www.royalmint.com/basket-page/

Sadly the world is about to hit hard in the next few years. Id rather not rely on numbers on my computer when one day I could wake up and see a zero lol.

Thanks, are there any reselling caveats if one stores at home? and I gather you have to sort out equipment, are there insurance policy’s which would also cover you? but perhaps at a serious cost

 

[KingKhanWC]

Ditto.

Also check out Palladium. Germany has just announced it will soon open a Hydrogen power plant, and where there is Hydrogen, there is Palladium. Plus Russia has the largest deposits of Palladium!

Thanks bro, Ill check it out. Russia has immense natural resource power, something which the west knows too well but the public here are clueless of.

Thanks, are there any reselling caveats if one stores at home? and I gather you have to sort out equipment, are there insurance policy’s which would also cover you? but perhaps at a serious cost

Not really, silver has been used for thousands of years and will continue until the end of time. You can spend more trying to protect it but imo just store it somewhere safe, dont tell anyone, this will maximise your profit. The only issue will be you may not want to see in 2 years, you may want to sell in 10.

If you want to follow a good channel which is gives advice on money matter, try Stansberry Research on Youtube.

 

[Technics 1210]

Thanks bro, Ill check it out. Russia has immense natural resource power, something which the west knows too well but the public here are clueless of.

The majority of the public is clueless.

Silver coins in USA now have a premium of 50%, Switzerland just imported 6 Tonnes of Gold from Russia! Palladium is creeping up (after almost doubling) when the Ukraine war started but with Hydrogen Cell technology replacing electric car technology, Palladium will go bonkers. Gold in PKR has gone through the roof! Currency debasement is engulfing the world economies.

Silver will treble in no time once the supply chains are back in full flow too!

Buy 1oz bar denominations!

 

[Robert]

Many congrats getting rid of your mortgage, did you achieve that more recently or a while back?

Yes, it seems wise to keep a hold of the ISA now and buy more bits during the sale. Were you more inclined to have an aggressive strategy now because you are closer to retirement (hopefully) or would you have had a more moderate approach if you were still some time away from riding off into the sunset

Mrs Robert & I moved out of London to the sticks where property is cheaper, so paid the mortgage off. It was risky as there is less work here than in the Smoke, but we have done ok in finding enough.

I started my pension later than ideal so have to make up ground, hence the aggressive investment portfolio. As I get closer to retirement I will assume a defensive posture in case of more market turbulence.

 

[shaz619]

Thanks bro, Ill check it out. Russia has immense natural resource power, something which the west knows too well but the public here are clueless of.



Not really, silver has been used for thousands of years and will continue until the end of time. You can spend more trying to protect it but imo just store it somewhere safe, dont tell anyone, this will maximise your profit. The only issue will be you may not want to see in 2 years, you may want to sell in 10.

If you want to follow a good channel which is gives advice on money matter, try Stansberry Research on Youtube.

Very true and tbh I think a big chunk of people secure it their own way especially in our community but as you said best to keep it to yourself. I agree with any asset, holding for the long run will always help the returns which may almost double for precious metals. When you buy from Royal Mint etc where do you tend to sell back?

 

[ElRaja]

What would you guys do with any savings in the current situation assuming you manage to establish an emergency fund (3 months minimum):

- Make a mortgage overpayment: Although this is unlikely to impact your LTV significantly (access to the 60% LTV rates may take a while) and rates would be going up when you remortgage eventually, but you reduce your overall interest

- Consider investing in a buy to let: Am not sure if the ship has sailed with this at this stage, but this may also involve liquidating an ISA which is just breaking even and trying to put enough together for a 25% deposit on a property no more than 100-130k, property has historically gone up and is fairly stable, but getting in now must be tougher and then there is tax and management aspect to

- Keep your cash in a savings account and continue to gain interest on it, with BOE hikes, interest you can gain is pretty good. And also keep your ISA open and its contributions.

- Look into REITS and invest in them, you miss out on the leaverage from a buy to let, but investing in REITS comes with less risk in the current climate

[MENTION=491]IMMY69[/MENTION] [MENTION=1842]James[/MENTION] [MENTION=7774]Robert[/MENTION] [MENTION=51465]DeadlyVenom[/MENTION] [MENTION=78642]shortbread[/MENTION] and others in this thread

1. rainy day fund, I'm pessimistic on the UK real economy, a million things can go wrong you should always have access to at least six months of spending needs liquid.

2. after that id say BTL is good if u have expertise, can u do up a property, add value to it, get a really good deal, then u will make real money. just doing a generic buy to let in this environment isnt very lucrative.

3. the history dont lie, nothing beats long-term stock returns, its liquid, it can (although i don't advise it) be leveraged, it has some room for creative expression and over a long enough timescale nothing beats the stock market.

[MENTION=43583]KingKhanWC[/MENTION] i hope ur coins gonna be called KingCoinWC

 

[MenInG]

MPs have earned £17.1m on top of their salaries in this parliament, with around two-thirds of the money going to just 20 MPs.

As part of Westminster Accounts, a joint project between Sky News and Tortoise Media to shine a light on how money works in politics, we found the majority of the extra earnings went to Tory politicians - a total of £15.2m - while Labour MPs earned an additional £1.2m.

Former prime minister Theresa May received the most on the list, earning £2,550,876 since the session began in December 2019.

Meanwhile, Labour's shadow foreign secretary David Lammy topped his party's list with additional earnings of £202,599.

The debate over second jobs dominated 2021 after former Tory MP Owen Paterson became embroiled in a lobbying scandal that eventually led to his resignation.

https://news.sky.com/story/westmins...st-election-with-tories-taking-15-4m-12758768

 

[IAJ]

https://news.sky.com/story/westmins...st-election-with-tories-taking-15-4m-12758768

Norway is probably the most expensive country in world and our PM has an annual salary of around £155,000. And that is concidered as a very decent earning.

 

[KingKhanWC]

Very true and tbh I think a big chunk of people secure it their own way especially in our community but as you said best to keep it to yourself. I agree with any asset, holding for the long run will always help the returns which may almost double for precious metals. When you buy from Royal Mint etc where do you tend to sell back?

You can sell back to Royal Mint. Its not only an hard asset which will increase in value but for me its an asset as a safety net which may be needed to purchase simple produce such as bread/milk IF in 5-10 years paper money, digital money collapses or becomes worthless.

 

[James]

<b>The government will scale back support for businesses with energy bills after warning that the current level of help was too expensive.</b>

Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one.

Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others.

But firms will only benefit from the scheme when energy bills are high.

The new scheme will run until the end of March 2024, while a limit has been set on it in a bid to reduce how much taxpayers are exposed to spiralling costs.

The energy support scheme is mainly used by businesses, but is also for charities, and public sector organisations such as schools and hospitals.

The government first launched the package last September after prices were driven up in the wake of the pandemic and the war in Ukraine.

Wholesale gas prices are now below the level they were before Russia's invasion, but still three to four times higher than their long-term average.

In its announcement, the government said it was scaling back the energy subsidies for the next financial year to £5.5bn.

The current scheme had been described as "unsustainably expensive" by the chancellor and was predicted to cost about £18.4bn in over just six months, according to official forecasters.

— BBC News