NS&I claim "we're all about saving"

A._Badger

steampowered said:

A._Badger said:

And there are fairies at the bottom of my garden.

The Treasury and the Bank of England have constant disagreements all of the time. The Treasury does not tell the Bank of England what to do on interest rates.

I don't believe that for a moment, any more than I believe the government's lies about the inflation rate. If it were true, why do you suppose NS&I rates have fallen recently? The answer, of course, is because it suits the government. 

happybagger

There's a lot of cash sloshing around.
12 months ago the savings ratio was 6.5%
BoE expected it to rise to about 17% during covid, as people were getting paid but counld't find much to spent it on.
It's now 29%, as people don't holiday, don't spend on new cars, don't go out to shops, don't spend out in pubs due to restrictions, and as many are concerned for their jobs. 

If that figure is maintained, we're in a very dangerous position as far as employment and the wider economy is concerned, so I would not expect rates to be above where they are for a VERY long time, be it at NS or elsewhere
(Stats: ONS)

steampowered

A._Badger said:

I don't believe that for a moment, any more than I believe the government's lies about the inflation rate. If it were true, why do you suppose NS&I rates have fallen recently? The answer, of course, is because it suits the government. 

And what "lies" might you be talking about.

You should not convince yourself that being a grumpy old sceptic is a replacement for knowing what you are talking about. It isn't.

Aretnap

NS&I may cut rates further (presumably mainly to premium bonds)
https://www.thetimes.co.uk/article/savers-hit-as-national-savings-investments-bank-slashes-rates-q0jsfptc8
Paywall, but the gist if the story is that NS&I has already ecxeeded its fundraising target for the year (itself massively increased from previous years) and is getting very close to the hard cap on deposits that it is allowed to accept. So it either cuts interest rates to reduce inflows, or it would have to close to new business altogether.

Have to say that given the government can borrow for up to 5 years at negative rates on the gilt markets (and up to 50 years at lower rates than NS&I was offering on instant access until recently) I'm not sure how paying consumers higher interest than banks do (or frankly any interest at all) is a good use of taxpayers' money...

happybagger

The 'good use of taxpayers money' has long gone

A._Badger

steampowered said:

A._Badger said:

I don't believe that for a moment, any more than I believe the government's lies about the inflation rate. If it were true, why do you suppose NS&I rates have fallen recently? The answer, of course, is because it suits the government. 

And what "lies" might you be talking about.

You should not convince yourself that being a grumpy old sceptic is a replacement for knowing what you are talking about. It isn't.

If you don't understand the flaws in CPI (and why governments use it) you might learn something from reading Emile Woolf. This would be a useful starting point for a beginner: http://www.emilewoolfwrites.co.uk/2017/08/12/consequences-inflationary-folly/
John Williams' Shadowstats might also be helpful when you've absorbed that..


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RG2015

A._Badger said:

steampowered said:

A._Badger said:

I don't believe that for a moment, any more than I believe the government's lies about the inflation rate. If it were true, why do you suppose NS&I rates have fallen recently? The answer, of course, is because it suits the government. 

And what "lies" might you be talking about.

You should not convince yourself that being a grumpy old sceptic is a replacement for knowing what you are talking about. It isn't.

If you don't understand the flaws in CPI (and why governments use it) you might learn something from reading Emile Woolf. This would be a useful starting point for a beginner: http://www.emilewoolfwrites.co.uk/2017/08/12/consequences-inflationary-folly/
John Williams' Shadowstats might also be helpful when you've absorbed that..


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Flaws are not lies other than lies, damn lies and statistics.

In any case nobody would ever have the exact same basket of goods.

steampowered

A._Badger said:

If you don't understand the flaws in CPI (and why governments use it) you might learn something from reading Emile Woolf. This would be a useful starting point for a beginner: http://www.emilewoolfwrites.co.uk/2017/08/12/consequences-inflationary-folly/
John Williams' Shadowstats might also be helpful when you've absorbed that..

How on earth does any of that make CPI a "lie". Nothing in the article you posted suggests that CPI is an inappropriate measure of inflation.

Your article notes as follows, also known as "stating the bleeding obvious". What are you suggesting the government does with that. Measure by inflation by setting a different interest rate for each individual person in the country? You would like to give the government a full record of absolutely every pound you spent over the past year so that the government can calculate an accurate personal inflation rate, would you? And I have faeries at the bottom of my garden.

The CPI is itself a structure of selective averages that purport to reflect the habits and preferences of the population as a whole, disregarding the fact that the population is made up of individuals who, to a greater or lesser degree, are at liberty to defy those averages every day. None of us spends money by purchasing the goods and services that happen to be in the statistician’s basket; in precisely the same proportions; or at the same prices; or at the very time specified by the CPI compilers.

Malthusian

If the percentage that the government uses to reflect inflation isn't sufficient to keep pace with the level of price rises I personally experience, then it's clearly a lie. Like how if my unemployment benefits aren't sufficient to fund my desired lifestyle, they're clearly lying when they say they are enough to live on.

Eco_Miser

A._Badger said:

steampowered said:

A._Badger said:

And there are fairies at the bottom of my garden.

The Treasury and the Bank of England have constant disagreements all of the time. The Treasury does not tell the Bank of England what to do on interest rates.

I don't believe that for a moment, any more than I believe the government's lies about the inflation rate. If it were true, why do you suppose NS&I rates have fallen recently? The answer, of course, is because it suits the government. 

NS&I set their rates based on how much the government want them to raise.

The BoE set their rates based on their view of the economy.

The two are not related, except indirectly through the economy.