BOE Interest Rate increased to 3%

Martico

Should be added that the annual public sector deficit is (I think) the third highest in the G7, at (from memory) around 8% of GDP. It's that (with at the time projected unfunded increases), along with debt levels pushing 95% of GDP and a wide current-account deficit, that has been spooking markets. 

Millyonare

Martico said:

Should be added that the annual public sector deficit is (I think) the third highest in the G7, at (from memory) around 8% of GDP. It's that (with at the time projected unfunded increases), along with debt levels pushing 95% of GDP and a wide current-account deficit, that has been spooking markets. 

UK total state debt is lower than every other country in the G7, except Germany. UK has one of the lowest debt levels in the developed world among major nations.

It's worth noting that markets barely moved at all during Kwarteng's famous budget speech, a few weeks ago. They only really moved 30-60mins later, after the speech, when the wildly overblown headlines about debt hysteria started hitting the wires.

Martico

Or the fact that it was completely unfunded, having sidelined the OBR. Poor productivity, low levels of investment, high twin deficits, no costed plan - all of these things are considered in the round. 

uk1

EssexHebridean said:

phillw said:

uk1 said:

then I am bewildered how this action works when the bulk of price rises effecting increases in expenditure is currently non-discretionary spending, ie heating, housing and food.  Almost all of the inflationary components are non-discretionary.

You don't have to have your heating on, I haven't yet.
You can cut back on what food you buy (either quantity or quality).

I'll give you housing, it's kinda hard to cut back on that.

Is this a deliberate “posting for controversy” thing? Or do you just spend all your time in this little banking board bubble so you’re completely unaware of the many people on these boards - who strangely enough reflect those in the real world out there too - who perhaps DO have to have their heating on - because they have health issues that demand it, or because perhaps they live in a poorly insulated home in a part of the U.K. that tends towards the conditions being less clement that hey are wherever you are based? Similarly, the many people who have already cut their food ur chasing back as much as they can - in some cases both quality AND quantity. 

It is why so many of us now hesitate before hitting the post button.  

To read the purportedly serious suggestion that the BOE have raised interest rates in the hope that inflation will be reduced because sufficient citizens will choose to starve themselves in their freezing homes takes mature discussion on these fora to a new deflationary level. 

Millyonare

Martico said:

Or the fact that it was completely unfunded, having sidelined the OBR. Poor productivity, low levels of investment, high twin deficits, no costed plan - all of these things are considered in the round. 

They did not sideline the OBR at all. It was an interim budget, which never in history has used the OBR for such an event. Never before. The markets knew this, beforehand. And any "uncosted" part (perceived or real) was just a tiny 1-2% of total state debt. Very affordable. The overblown media "debt" hysteria was political and emotional, not economic.

talexuser

littlemissbossy said:

Was this problem here before and the budget farce just showed it up or was it because the budget caused the government borrowing rates to increase, which then increased the black hole due to the debt repayments?

Robert Peston gave a speech reckoning that the increase in government debt interest cause by that budget costs an extra 10 billion a year for the foreseeable future, naturally from taxpayers eventually.

sevenhills

Martico said:

Should be added that the annual public sector deficit is (I think) the third highest in the G7, at (from memory) around 8% of GDP. It's that (with at the time projected unfunded increases), along with debt levels pushing 95% of GDP and a wide current-account deficit, that has been spooking markets. 

• UK general government gross debt was £2,436.7 billion at the end of Quarter 2 (Apr to June) 2022, equivalent to 101.9% of gross domestic product (GDP).

• UK general government deficit (or net borrowing) was £43.9 billion in Quarter 2 2022, equivalent to 7.2% of GDP.

• Which gives a total 109.1%

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/june2022

diystarter7

Rates should rise higher and more quickly to nip in the bud the rampant inflation that is hitting hard people with savings.
Yes it is hitting those harder on benefits and lower incomes but inflation helps no one
So higher rates now and this will then end hyperinflation sooner

You cant get something for nothing as Truss tried and I blame her for this mess.

Don't forget the price of gas and oil is actually quiet low based on historical levels and was just bS by truss saying it caused the problems.

Sunak is the best of a bed bunch IMO and J Hunt is just a puppet, rightly so.

Altior

You cant get something for nothing as Truss tried and I blame her for this mess.

Are you for real? The UK isn't in some kind of solo bubble, this reckoning is occurring globally. Plenty of people pointed out at the time that paying millions of people not to work for years, handouts here there and everywhere and making up money to do it, was inevitably going to end up shafting the economy for a generation. The way the UK State chose to do it was lamentable and lazy, a complete nirvana for anyone without a conscience. Is your business that you've not used for 3 years affected by lockdown? Er, yes? Ok here's £50K. Paying hundreds of consultants over £6000 a day who didn't notice that the Excel workbook ran out of space.  

Most people still went along with it, as they swallowed the propaganda whole, but now don't want to make the adjustments to their living standards that became inevitable. 

EthicsGradient

Millyonare said:

Martico said:

Should be added that the annual public sector deficit is (I think) the third highest in the G7, at (from memory) around 8% of GDP. It's that (with at the time projected unfunded increases), along with debt levels pushing 95% of GDP and a wide current-account deficit, that has been spooking markets. 

UK total state debt is lower than every other country in the G7, except Germany. UK has one of the lowest debt levels in the developed world among major nations.

It's worth noting that markets barely moved at all during Kwarteng's famous budget speech, a few weeks ago. They only really moved 30-60mins later, after the speech, when the wildly overblown headlines about debt hysteria started hitting the wires.

Is that really true? OECD figures put UK general government debt, as a percentage of GDP, among the higher ones: https://data.oecd.org/gga/general-government-debt.htm
Germany, Canada and France below it.