BOE cut to o.5%

Cannon_Fodder

Wages are deflating...dopester was right about the extent of pay cuts, short time working etc...
another one; http://newsvote.bbc.co.uk/1/hi/england/west_midlands/7925273.stm

"Jaguar Land Rover workers have decided to take a one-year pay freeze and move to a four-day week in an attempt to save jobs."


Reduced consumption has been/will be a deflationary factor for a while.

Might see its effect for a while before the QE kicks in.

chucky

dervish wrote: »

another VICIOUS blow to savers.

simple answer is to change investment vehicle

Sir_Humphrey

ad9898 wrote: »

I'd really like to know where these deflation conditions exist, because I don't see them. If I was cynical, and as far as Clown goes I am, I can't see any deflation apart from house prices and mortgages, strange that hey.

Since those costs (and rent) make up the single largest part of household expenditure for most people, they are fairly major ones no? And these are reflected in the stats, as it is the flawed CPI measure that is at 3%, and the broader long standing RPI figure at 0.1%

You also are ignoring the MoM inflation stats I posted the other day.

Anyone expecting inflation will have to explain to me how wages are going to increase by a similar amount in the next 12 months before you even begin to win me over to your PoV.

The_White_Horse

this whole interest rate reduction thing is pointless as it only helps those on trackers or SVR.

people with loans, fixed mortgages, credit cards etc (ie the majority) it doesn't help them at all.

the govt should force bailed out institutions to lower the interest rates on ALL products. this way everyone would be better off and more inclined to spend.

StevieJ

stephen163 wrote: »

Inflation should be taking a nose dive in the coming months, in which case savers aren't doing too badly.

EDIT - except those who rely on income from savings,

Perhaps they should get stuck into Aviva Shares, dropped 30% today but are holding their dividend level, should be a tax free yield in the mid teens.
Another addition to my falling knife portfolio

A._Badger

It's worth bearing in mind that, by and large, the people who are driving this bus are the same ones who put us in the ditch in the first place.

For all the jargon and faux authoritative pronouncements, it is abundantly clear that they had little idea what they were doing in the past. I see little reason to believe they are any wiser today relying, as they appear to be, on that tried and trusted maxim of failed governments everywhere: 'this isn't working - we must do more of it!'

4Chickens

How will we know that QE is working? Will the banks start prostituting themselves again? They did this last time and the net result was a serious STD.
And who in their right mind is going to borrow money at the moment unless its absolutely critical. Those who are in safe jobs for now don't have crystal balls do they? If I had a pile of cash I would be cuddling it under the duvet with me.
On a personal note me and hubby have a 2k disposable income per month and we are throwing every penny of it at our debts and mortgage.

Really2

The_White_Horse wrote: »

people with loans, fixed mortgages, credit cards etc (ie the majority) it doesn't help them at all.

the govt should force bailed out institutions to lower the interest rates on ALL products. this way everyone would be better off and more inclined to spend.

Why they have a choice of what products to take.
If I was on a tracker and rates were going up I would not moan it would be my own fault.
I could either change products or just shut up and except it. (I was on a fixed rate 5 months ago and paid £1500 to get out of it)

Sir_Humphrey

cindiedunkley wrote: »

How will we know that QE is working? Will the banks start prostituting themselves again? They did this last time and the net result was a serious STD.
And who in their right mind is going to borrow money at the moment unless its absolutely critical. Those who are in safe jobs for now don't have crystal balls do they? If I had a pile of cash I would be cuddling it under the duvet with me.
On a personal note me and hubby have a 2k disposable income per month and we are throwing every penny of it at our debts and mortgage.

This is why it will probably not lead to high inflation - or in fact even work. What is also needed is public works spending and the suchlike to restore demand.

It is not a stupid question - quite the opposite, the economist Maynard Keynes made the same point in the 1930s.

Kez100

The_White_Horse wrote: »

this whole interest rate reduction thing is pointless as it only helps those on trackers or SVR.

people with loans, fixed mortgages, credit cards etc (ie the majority) it doesn't help them at all.

the govt should force bailed out institutions to lower the interest rates on ALL products. this way everyone would be better off and more inclined to spend.

You are only thinking of consumers.

Only fixed loans don;t cange. A lot of business loans are variable.

It also helps banks make more profit. I know, I know, but they ahve to get back on their feet somehow if we are going to escape this ungodly mess.