The big crash is coming

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
25 replies 3.1K views
BloombergBloomberg Forumite
665 Posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
As we have all noticed inflation is a real problem at the moment, despite the Bank of England assuring us that inflation will fall the current situation is causing much anxiety for many consumers. Fuel prices are now nothing short of obscene, and food prices seem to be increasing sharply.

Despite the above people seem to be getting by. My personal opinion is that the only saving grace for most households is the 0.5% base rate There are millions of mortgage payers who cannot afford a even the smallest rate rise. I think that within two years the base rate will be at 5% which will cause widespread repossessions. People have got too used to the 0.5% base rate and most are ill prepared for the impending rise.

It would be interesting to know what other readers are predicting for interest rates, housing prices and the economy in general. Personally I would not advise anyone to buy a house right now but to sit tight for a couple of years.
Money is a wise mans religion
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Replies

  • CLAPTONCLAPTON Forumite
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    firstly how many people do you know who actually can borrow money at 0.5%?
    what do you think are realistic rates for
    new mortgages
    new personal loans
    credit card rates
  • FLAPJACKFLAPJACK Forumite
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    I think you are spot on with your predictions...as a result of those predictions we are going to see a lot of unhappy people in the next couple of years.

    The British resolve I think may give way to civil unrest if things don't change or slow up..thousands of people being made redundant etc. Look at what happened in Tunisia a few weeks ago....Greece before that and now (for slightly different reasons) Egypt today...we have had a taste with the Students the other week.

    People are different now they see that sometimes the only way is to take action... this isn't Britain of the 50's anymore.

    Purely because most people have had access to easy endebtedness and are now for the first time unjustly having to put up with the results of a country run the same way and it's people living on huge debt. Caused by the greed in the banking sector.

    People on benefits (deserving or otherwise) finding the benefits cut and then the average person with a mortgage facing rises in the payments as well as food and fuel. I am sure that a rise in crime rate will be around the corner...even more so when the police force will be cut by 20%....There are now 2500 less "bobbies" in the force since this government came to power! ( Quoted: BBC Andrew Marr this morning)

    Meanwhile the banking industry (which has a lot to do with the situation we are in) seems to get off with a few million pound fines but still awards bonuses. The politians locked away in their ivory towers....(thats the one's who's "second homes" is not HM Hotels at the moment)
    completely out of touch with the consequences of their decisions....ok they may be well meaning in cutting the debt but people have to live also.
    The situation we are facing is tantermount to someone posting on the Debt threads here and being advised to spend 95% of their income each month to clear a CC debt...it won't work.

    This may be a bit off topic but it could be the result of the facts that the OP has presented.
  • The truth is ...There is never a good time to buy a house.

    The market is either rising too fast , falling or stagnating.

    There will always be something on the horizon that could hit you so hard you sink.

    But if you need a house to live in and raise a family for the next few decades ....Then any time is the right time.

    Just make sure you don't buy the wrong house.
  • CLAPTON wrote: »
    firstly how many people do you know who actually can borrow money at 0.5%?
    what do you think are realistic rates for
    new mortgages
    new personal loans
    credit card rates

    Nobody is borrowing money at 0.5% but when the base rate rises then so will the interest rates at which people are borrowing money. Banks and building societies do not hesitate to pass on interest rate rises. I rest my case.
    Money is a wise mans religion
  • FLAPJACK wrote: »
    I think you are spot on with your predictions...as a result of those predictions we are going to see a lot of unhappy people in the next couple of years.

    The British resolve I think may give way to civil unrest if things don't change or slow up..thousands of people being made redundant etc. Look at what happened in Tunisia a few weeks ago....Greece before that and now (for slightly different reasons) Egypt today...we have had a taste with the Students the other week.

    People are different now they see that sometimes the only way is to take action... this isn't Britain of the 50's anymore.

    Purely because most people have had access to easy endebtedness and are now for the first time unjustly having to put up with the results of a country run the same way and it's people living on huge debt. Caused by the greed in the banking sector.

    People on benefits (deserving or otherwise) finding the benefits cut and then the average person with a mortgage facing rises in the payments as well as food and fuel. I am sure that a rise in crime rate will be around the corner...even more so when the police force will be cut by 20%....There are now 2500 less "bobbies" in the force since this government came to power! ( Quoted: BBC Andrew Marr this morning)

    Meanwhile the banking industry (which has a lot to do with the situation we are in) seems to get off with a few million pound fines but still awards bonuses. The politians locked away in their ivory towers....(thats the one's who's "second homes" is not HM Hotels at the moment)
    completely out of touch with the consequences of their decisions....ok they may be well meaning in cutting the debt but people have to live also.
    The situation we are facing is tantermount to someone posting on the Debt threads here and being advised to spend 95% of their income each month to clear a CC debt...it won't work.

    This may be a bit off topic but it could be the result of the facts that the OP has presented.

    You too are spot on with your post. The only thing I would like to mention is that I think that people who borrowed too much must take some of the blame for their situation. Just because someone is offered credit dies not mean that they should use it.
    Money is a wise mans religion
  • CLAPTONCLAPTON Forumite
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    Bloomberg wrote: »
    Nobody is borrowing money at 0.5% but when the base rate rises then so will the interest rates at which people are borrowing money. Banks and building societies do not hesitate to pass on interest rate rises. I rest my case.


    borrowing rate are at an all time high
    base rate is 0.5%

    maybe you are right based on normal times
    maybe times aren't entirely normal
  • FLAPJACKFLAPJACK Forumite
    524 Posts
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    Hi Bloomberg,

    That went through my mind too as I wrote it, but then thought really the ultimate decision was the lenders who could only see a fast buck. Human nature I suppose.... if you can obtain instant gratification go for it..(which would be the driver for both borrower and lender alike).

    Interesting that on the Debt threads here 90% (it seems) is debt caused by CC's. As my old Dad used to say as soon as you only have to sign to buy something (pin number now) instead of shelling out actually notes money becomes meaningless. If you sold something to someone for £6 (whatever the minmum wage is now) and they paid you in cash and remembered thay had to work an hour for that then thay may decide it's not worth it or they don't need it. Punch in a pin number it's yours!

    I think the idea Martin has of financial education in schools is an absolute now...considering how much we collectively spend on education..it's a great disservice to the next generation not to educate them.
  • FLAPJACKFLAPJACK Forumite
    524 Posts
    ✭✭
    meant "they" of course!
  • FLAPJACK wrote: »
    Hi Bloomberg,

    That went through my mind too as I wrote it, but then thought really the ultimate decision was the lenders who could only see a fast buck. Human nature I suppose.... if you can obtain instant gratification go for it..(which would be the driver for both borrower and lender alike).

    Interesting that on the Debt threads here 90% (it seems) is debt caused by CC's. As my old Dad used to say as soon as you only have to sign to buy something (pin number now) instead of shelling out actually notes money becomes meaningless. If you sold something to someone for £6 (whatever the minmum wage is now) and they paid you in cash and remembered thay had to work an hour for that then thay may decide it's not worth it or they don't need it. Punch in a pin number it's yours!

    I think the idea Martin has of financial education in schools is an absolute now...considering how much we collectively spend on education..it's a great disservice to the next generation not to educate them.
    Hi Flapjack,

    Another fantastic post -thank you. I am doing everything to educate my kids about the perils of debt. Too many kids nowadays know the cost of everything but the value of nothing.

    Credit cards if correctly used are fantastic and offer a lot of protection and convenience. If abused they can be your worst enemy. People need to realise that if for example you buy a pair of shoes for £100 on a credit card and fail to clear the balance those shoes no longer cost £100. They effectively become more expensive.
    Money is a wise mans religion
  • FLAPJACKFLAPJACK Forumite
    524 Posts
    ✭✭
    Is it me or have the Inflation figures quoted on news channels just been the CPI instead of the RPI...I ended up going to the National Statistics Office website to find out what the RPI figure actually was!
    Easier to let the nation think its only 3.7% ....I suppose. Certainly if you only quote CPI the Pensioners and Benefit claimants will soon forget the "real" rate ..RPI. That way only increasing Pensions (State and Private) by the CPI will be a breeze.

    This is where the Soaps and football etc comes into the equasion...get the masses worrying more about fitictional lives and Footballers injuries and they don't see their own situation...putty in the governments hands.

    It must be the case...otherwise we wouldn't be the only two here looking at the situation in this way.?
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