NS&I cancel some of their planned interest rate cuts

port_of_spain

They Treasury don't need our money for the bailouts. That's not how modern money works. They have the magic money tree in Threadneedle Street, which allows them to spend however much money they want into existence.

That is not to say that unusually large spending, coupled with lower tax receipts, couldn't cause problems further down the line. It could. In some scenarios, it could even cause the high inflation that some posters like to worry about, though that depends on the circumstances, and what steps are taken later on; it doesn't follow inevitably from the quantity of money.

Thrugelmir

Alexland said:

Maybe the treasury have told NS&I to raise more money to support the virus bailouts..

Well they are pumping billions in one form or another into the economy. One way of making the impact less inflationary and offering an alternative to that of inflating asset prices higher. Devaluing the £ further. 

Socajam

Good news indeed, I shall transfer 9,500 from Nationwide to PB this weekend.
I won 75 in March and 75 in April to date.
Bought my bonds late 2019 and in 2020.

eskbanker

Socajam said:

I shall transfer 9,500 from Nationwide to PB this weekend.

There's no rush - the new bonds you buy won't be in a draw until 1st June whether you buy them on 18th or 30th April so leaving the money with Nationwide for a bit longer will earn some more interest....

Socajam

eskbanker said:

Socajam said:

I shall transfer 9,500 from Nationwide to PB this weekend.

There's no rush - the new bonds you buy won't be in a draw until 1st June whether you buy them on 18th or 30th April so leaving the money with Nationwide for a bit longer will earn some more interest....

Thanks - I know

Prism

port_of_spain said:

They Treasury don't need our money for the bailouts. That's not how modern money works. They have the magic money tree in Threadneedle Street, which allows them to spend however much money they want into existence.

That is not to say that unusually large spending, coupled with lower tax receipts, couldn't cause problems further down the line. It could. In some scenarios, it could even cause the high inflation that some posters like to worry about, though that depends on the circumstances, and what steps are taken later on; it doesn't follow inevitably from the quantity of money.

I'm still not sure thats going to happen (yet?). They have a short term borrowing facility with the BoE and then they say the rest of the money will be raised using the normal methods

Albermarle

Well they are pumping billions in one form or another into the economy. One way of making the impact less inflationary and offering an alternative to that of inflating asset prices higher. Devaluing the £ further. 

With all other big economies in the same boat , then maybe no one countries currency will be favoured over another .

Not sure I would be selling Pounds to buy Euros , with all the mega spending in France, Spain, Italy etc 

port_of_spain

Prism said:

port_of_spain said:

They Treasury don't need our money for the bailouts. That's not how modern money works. They have the magic money tree in Threadneedle Street, which allows them to spend however much money they want into existence.

That is not to say that unusually large spending, coupled with lower tax receipts, couldn't cause problems further down the line. It could. In some scenarios, it could even cause the high inflation that some posters like to worry about, though that depends on the circumstances, and what steps are taken later on; it doesn't follow inevitably from the quantity of money.

I'm still not sure thats going to happen (yet?). They have a short term borrowing facility with the BoE and then they say the rest of the money will be raised using the normal methods

My point was just that they have the tools to fund the spending, so there is no issue about whether they can fund it. Which might even mean that the stated reason for keeping NS&I rates up (viz. to support savers) is true

port_of_spain

Albermarle said:

Well they are pumping billions in one form or another into the economy. One way of making the impact less inflationary and offering an alternative to that of inflating asset prices higher. Devaluing the £ further. 

With all other big economies in the same boat , then maybe no one countries currency will be favoured over another .

Not sure I would be selling Pounds to buy Euros , with all the mega spending in France, Spain, Italy etc 

I think it's very premature to worry about inflation. Extra Government spending is being used to partially compensate households and businesses for falls in their incomes. So although a large extra dose of Government spending is inflationary in itself, it's countering an even larger deflationary effect from falling incomes.

I think people have a distorted view that it's only higher Government spending that can be inflationary. It's any spending. By concentrating on higher Government spending, and ignoring the lower non-Government spending, they miss 2/3 of the picture.

IMHO, it is much further along that inflation could become an issue. When things eventually come back to normal (or to a new normal), how soon do Governments withdraw extra support measures? If they do it too soon, they could damage the finances of households and businesses. Too late, and then there could be a rush of spending leading to a bout of inflation. Though even if the latter happens, there is no reason to think it couldn't be kept under control.

strawb_shortcake

Nice to have a bit of good news, hoping for a win next month after nothing this month