Are we expecting BOE to remain at 4.75% on 8th February 2025?

michaels

poppy10_2 said:

Sarah1Mitty2 said:

propertyhunter said:

Sarah1Mitty2 said:

propertyhunter said:

lojo1000 said:

propertyhunter said:

They don't know what they're doing because this is supply side inflation - caused partly by Brexit increasing our import costs and limiting our labour market, combined with the war in Ukraine and its effects. It's not being driven by demand side inflation caused by people spending too much. I don't know how people in this country get into high office. I fear it's cronyism and corruption rather than on merit. 

What are your practical supply side solutions and where would you put base rates now?

I think we have to relieve the labour market. It's too tight - not enough people to do essential jobs. So we relax our immigration policy - grant more visas. It allows us to be more productive. I think hold interest rates now they are where they are because their effects aren't filtering through yet - only a proportion of mortgage holders are affected so far since more people are on fixed rates. I dread to think what is going to happen in 2025-26 when most people are exposed to the current interest rates. 

Increase wages for essential jobs is the answer, not more immigration, IMO.

Increasing wages does nothing when unemployment is at record lows - there's no one to do the work full stop. This pushes up prices. Immigration is good when managed appropriately to bring in the right skills and talent which we need. If they don't come here, they go elsewhere - while the country suffers from a skills and knowledge deficit and the population gets poorer. 

I don`t agree, many of the potential workforce are at "Uni" living at home and paying out debt for a worthless degree, the "50% to go to Uni" thing needs to be put to rest once and for all, one way to do it is to make wages for necessary jobs much more attractive, another is to raise the academic bar for getting into Uni meaning that a lot of kids will just have to go out and find a job.

The world has changed. The days of being able to leave school at 16 without any qualifications and walk into a decently paid solid job and work your way up the career ladder have gone for the vast majority of people. If you don't have any advanced qualifications then other than unstable low paid retail/delivery/manual/gig economy jobs then there is nothing really out there for you. 

People aren't spending £9K+ per year on tuition fees just for fun. It's pretty much essential now to enter the labour market

Compulsory school leaving age has been 18 for many years now at which age their are entry paths to professions like accounting.  Meanwhile my daughter is doing a 'law degree' art a pretend university which I suspect will give her and all the other students £75k of debt but very little else after 3 years.  Meanwhile the taxpayer is pumping up the London housing market with the 13k they are 'lending' her to rent.

RelievedSheff

poppy10_2 said:

Sarah1Mitty2 said:

propertyhunter said:

Sarah1Mitty2 said:

propertyhunter said:

lojo1000 said:

propertyhunter said:

They don't know what they're doing because this is supply side inflation - caused partly by Brexit increasing our import costs and limiting our labour market, combined with the war in Ukraine and its effects. It's not being driven by demand side inflation caused by people spending too much. I don't know how people in this country get into high office. I fear it's cronyism and corruption rather than on merit. 

What are your practical supply side solutions and where would you put base rates now?

I think we have to relieve the labour market. It's too tight - not enough people to do essential jobs. So we relax our immigration policy - grant more visas. It allows us to be more productive. I think hold interest rates now they are where they are because their effects aren't filtering through yet - only a proportion of mortgage holders are affected so far since more people are on fixed rates. I dread to think what is going to happen in 2025-26 when most people are exposed to the current interest rates. 

Increase wages for essential jobs is the answer, not more immigration, IMO.

Increasing wages does nothing when unemployment is at record lows - there's no one to do the work full stop. This pushes up prices. Immigration is good when managed appropriately to bring in the right skills and talent which we need. If they don't come here, they go elsewhere - while the country suffers from a skills and knowledge deficit and the population gets poorer. 

I don`t agree, many of the potential workforce are at "Uni" living at home and paying out debt for a worthless degree, the "50% to go to Uni" thing needs to be put to rest once and for all, one way to do it is to make wages for necessary jobs much more attractive, another is to raise the academic bar for getting into Uni meaning that a lot of kids will just have to go out and find a job.

The world has changed. The days of being able to leave school at 16 without any qualifications and walk into a decently paid solid job and work your way up the career ladder have gone for the vast majority of people. If you don't have any advanced qualifications then other than unstable low paid retail/delivery/manual/gig economy jobs then there is nothing really out there for you. 

People aren't spending £9K+ per year on tuition fees just for fun. It's pretty much essential now to enter the labour market

Not true at all.

There are plenty of apprentice schemes available to school leavers that lead onto not only valuable on the job learning but a decent wage and career at the end of it.

MattMattMattUK

poppy10_2 said:

Sarah1Mitty2 said:

propertyhunter said:

Sarah1Mitty2 said:

propertyhunter said:

lojo1000 said:

propertyhunter said:

They don't know what they're doing because this is supply side inflation - caused partly by Brexit increasing our import costs and limiting our labour market, combined with the war in Ukraine and its effects. It's not being driven by demand side inflation caused by people spending too much. I don't know how people in this country get into high office. I fear it's cronyism and corruption rather than on merit. 

What are your practical supply side solutions and where would you put base rates now?

I think we have to relieve the labour market. It's too tight - not enough people to do essential jobs. So we relax our immigration policy - grant more visas. It allows us to be more productive. I think hold interest rates now they are where they are because their effects aren't filtering through yet - only a proportion of mortgage holders are affected so far since more people are on fixed rates. I dread to think what is going to happen in 2025-26 when most people are exposed to the current interest rates. 

Increase wages for essential jobs is the answer, not more immigration, IMO.

Increasing wages does nothing when unemployment is at record lows - there's no one to do the work full stop. This pushes up prices. Immigration is good when managed appropriately to bring in the right skills and talent which we need. If they don't come here, they go elsewhere - while the country suffers from a skills and knowledge deficit and the population gets poorer. 

I don`t agree, many of the potential workforce are at "Uni" living at home and paying out debt for a worthless degree, the "50% to go to Uni" thing needs to be put to rest once and for all, one way to do it is to make wages for necessary jobs much more attractive, another is to raise the academic bar for getting into Uni meaning that a lot of kids will just have to go out and find a job.

The world has changed. The days of being able to leave school at 16 without any qualifications and walk into a decently paid solid job and work your way up the career ladder have gone for the vast majority of people. If you don't have any advanced qualifications then other than unstable low paid retail/delivery/manual/gig economy jobs then there is nothing really out there for you. 

I am a millennial, I did not go to university, I have gone through a couple of different industries before now running my own company and having pre-Covid had a six figure income, although that dropped and it will likely be next year before I get back to that again. I work closely with a few different industries, financial services is a total no go without a degree and for the higher paying rolls a Masters is often required, I also work with another sector is which is very well paid, no qualifications are required and in many cases they are viewed as pointless. 

Personally although I had no qualifications beyond GCSEs and a first aid certificate I am now studying a bunch of professional qualifications which will when completed in three years be equivalent to a Masters and have had discussions with two different professors who seem very happy for me at that point to study a PhD, however that is more a situation of "because I can" rather than a need for career progression. 

poppy10_2 said:

People aren't spending £9K+ per year on tuition fees just for fun. It's pretty much essential now to enter the labour market

Quite a few are, talk to school leavers and university applicants and many are desperate to go to university to experience the "university lifestyle" and not have to join the world of work for another three years. Going to uni is now regarded as as much as a rite of passage as an education. 

Seraphi

RelievedSheff said:

poppy10_2 said:

The world has changed. The days of being able to leave school at 16 without any qualifications and walk into a decently paid solid job and work your way up the career ladder have gone for the vast majority of people. If you don't have any advanced qualifications then other than unstable low paid retail/delivery/manual/gig economy jobs then there is nothing really out there for you. 

People aren't spending £9K+ per year on tuition fees just for fun. It's pretty much essential now to enter the labour market

Not true at all.

There are plenty of apprentice schemes available to school leavers that lead onto not only valuable on the job learning but a decent wage and career at the end of it.

Plenty exist. Being of sufficient quality for valuable on the job learning is another matter and there is data contrary to your belief.

Financial Times: Apprenticeships in England deliver the lowest quality of further education, analysis finds

wheldcj

We offer apprenticeships in the insurance industry.  They are valuable and lead to a very high salaried career without degree entry requirements 

NorfolkCanary

There's plenty of careers that obviously do require uni degree/post grad doctorates; there's also plenty of jobs out there that don't need that level of study and young adults that would benefit from on the job apprenticeship training, support and learning, therefore not needing to get into £20k+ ? of debt. Of course thanks to government cuts to schooling / H.E. & F.E. education the availability and quality of those schemes is now also heading up the creek with a broken paddle.

Think it was crashy who earlier said:

Sarah1Mitty2 said:

Increase wages for essential jobs is the answer, not more immigration, IMO.

True, but essential jobs are being paid more, however there's a limit to what the end customer will pay for the good/service provided before they go elsewhere, either to sacrifice a little quality or service. We of course do need more immigration, after all Juliusz hasn't taken two-toothed Bob's job as a surgeon on a whim.

Anyway, is it about time the title was changed to "..................5% or 5.25% on 3rd August"?

Sarah1Mitty2

lmitchell said:

Sarah1Mitty2 said:

lmitchell said:

Sarah1Mitty2 said:

lmitchell said:

lojo1000 said:

MattMattMattUK said:

lmitchell said:

lojo1000 said:

propertyhunter said:

They don't know what they're doing because this is supply side inflation - caused partly by Brexit increasing our import costs and limiting our labour market, combined with the war in Ukraine and its effects. It's not being driven by demand side inflation caused by people spending too much. I don't know how people in this country get into high office. I fear it's cronyism and corruption rather than on merit. 

What are your practical supply side solutions and where would you put base rates now?

Scrap VAT on energy.

Inflationary. Reduces costs slightly to consumers, not supply side.

lmitchell said:
Enforce lower standing charges.

No net change. Standing charges are already set by Ofgem, the suppliers make no profit from them and reducing standing charges means that unit rates need to rise.

lmitchell said:
Reduce fuel duty.

Inflationary. Would reduce costs to consumers and businesses, but the reduction in costs to consumers and subsequent increased spending would increase inflation more than the drop to business. 

lmitchell said:

Those three solutions alone would get us back down fast - and without rates having to go much higher than 3%.

Those three "solutions" would increase inflation, potentially significantly, as well as reducing government revenue at a time that deficit is rising and borrowing has reached the highest proportion of GDP for 60 years. They are not solutions, they are making things worse. 

A lot of small businesses have suffered from rising energy costs. Reducing VAT here would keep many in business even if not increasing supply, so I think this is a good idea.

Similarly with fuel duty - it would reduce the cost to bring goods to market and hence encourage supply.

The revenue lost by the government would need to be financed which has negative impacts but on the whole I still think this direct approach to increasing supply works.

Just don't cut interest rates at the same time.

Agreed. It's not inflationary whatsoever. As you say, reducing energy costs would enable producers to supply more cheaply, due to reduced overheads. Ensuring the producers do pass on those savings to the end user would be the biggest challenge.

Returning the additional National Insurance tax (1.25% hike) that Hunt scrapped would surely cover much of these costs. I think we could all stomach another 1.25% in tax if it meant inflation was slashed and interest rates returned to more sustainable, stable levels.

And I'd also agree that we'd need to let bank rate sit as is for the next 6 months while these energy cuts take effect.

They are returning to more sustainable stable levels, it is because they were artificially held below those levels for so long that we are now in the present mess, the return to normal will unfortunately see people who overstretched unable to pay their debt though.

Sustainable, stable levels would be 3%+ - comfortable enough above 2% inflation target and still enough to give savers some returns. Consumer spending IS needed to grow the economy, whether you like it or not.

But the inflation is running at 4 times the target, at least, that is why those low rates are not sensible or sustainable! You seem to be thinking of what is comfortable for a mortgage debt holder rather than the economy as a whole (The BOE is looking at the whole economy)

I'm saying that is where we should be looking to return to after this shambolic period. Had the BoE hiked to 2.5%-3% in late 2021 this would all be over already IMO.

5% is about the historical average? but that was when they could manage the inflation rate at around 2%, if they can`t get inflation back to 2% (many commentators are saying this won`t be possible) they won`t be able to make low rates the norm, it will have to be high(er) rates as the norm (again)?

RelievedSheff

NorfolkCanary said:

There's plenty of careers that obviously do require uni degree/post grad doctorates; there's also plenty of jobs out there that don't need that level of study and young adults that would benefit from on the job apprenticeship training, support and learning, therefore not needing to get into £20k+ ? of debt. Of course thanks to government cuts to schooling / H.E. & F.E. education the availability and quality of those schemes is now also heading up the creek with a broken paddle.

Think it was crashy who earlier said:

Sarah1Mitty2 said:

Increase wages for essential jobs is the answer, not more immigration, IMO.

True, but essential jobs are being paid more, however there's a limit to what the end customer will pay for the good/service provided before they go elsewhere, either to sacrifice a little quality or service. We of course do need more immigration, after all Juliusz hasn't taken two-toothed Bob's job as a surgeon on a whim.

Anyway, is it about time the title was changed to "..................5% or 5.25% on 3rd August"?

If inflation doesn't come down substantially next month it will be almost a dead cert that they will raise the rate to at least 5.5% next time!

Strummer22

RelievedSheff said:

NorfolkCanary said:

There's plenty of careers that obviously do require uni degree/post grad doctorates; there's also plenty of jobs out there that don't need that level of study and young adults that would benefit from on the job apprenticeship training, support and learning, therefore not needing to get into £20k+ ? of debt. Of course thanks to government cuts to schooling / H.E. & F.E. education the availability and quality of those schemes is now also heading up the creek with a broken paddle.

Think it was crashy who earlier said:

Sarah1Mitty2 said:

Increase wages for essential jobs is the answer, not more immigration, IMO.

True, but essential jobs are being paid more, however there's a limit to what the end customer will pay for the good/service provided before they go elsewhere, either to sacrifice a little quality or service. We of course do need more immigration, after all Juliusz hasn't taken two-toothed Bob's job as a surgeon on a whim.

Anyway, is it about time the title was changed to "..................5% or 5.25% on 3rd August"?

If inflation doesn't come down substantially next month it will be almost a dead cert that they will raise the rate to at least 5.5% next time!

I'm not sure about that - inflation data is (obviously) reported in arrears, so the next inflation data will be reporting mostly on what has already happened as of today and can't possibly have any weighting to yesterday's 0.5% interest rate increase. 

Because the effect of the interest rate rise lags so much there's a danger of overshooting and tipping the economy into deflation and too big of a recession. I suspect there will be a 0.25% rise next time around even if inflation data is grim reading, and no rise at all if inflation finally starts heading in the right direction. I would be very surprised if inflation is lower than the forecast next month though! 

michaels

NorfolkCanary said:

There's plenty of careers that obviously do require uni degree/post grad doctorates; there's also plenty of jobs out there that don't need that level of study and young adults that would benefit from on the job apprenticeship training, support and learning, therefore not needing to get into £20k+ ? of debt. Of course thanks to government cuts to schooling / H.E. & F.E. education the availability and quality of those schemes is now also heading up the creek with a broken paddle.

Think it was crashy who earlier said:

Sarah1Mitty2 said:

Increase wages for essential jobs is the answer, not more immigration, IMO.

True, but essential jobs are being paid more, however there's a limit to what the end customer will pay for the good/service provided before they go elsewhere, either to sacrifice a little quality or service. We of course do need more immigration, after all Juliusz hasn't taken two-toothed Bob's job as a surgeon on a whim.

Anyway, is it about time the title was changed to "..................5% or 5.25% on 3rd August"?

My DD1 is doing a micky mouse 'law degree' at a London 'uni' - just a standard 3 year course but with living cost and tuition fees and inflation her 'debt' will be 75-80k at the end.  No doubt if she ends up earning median income (35k in today's money?) she will pay extra graduate tax of about 30k before it gets written off.