G STAR RAM Posted July 17, 2023 Share Posted July 17, 2023 Although I understand the reasoning behind interest rate increases, basically to reduce spending power and to encourage people to save, I can't help but think that right now, increasing interest rates will achieve what is set out to do. The biggest impact is surely going to be to mortgage holders who are most likely already struggling from food price and inflation and the energy 'crisis'. With these 2 things supposedly being the main driver of inflation I cant understand how we get it under control, after all both are necessities so people are not just going to stop buying them. Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? Comrade 86, Gritstone Ram, ariotofmyown and 1 other 4 Link to comment Share on other sites More sharing options...
RoyMac5 Posted July 17, 2023 Share Posted July 17, 2023 10 minutes ago, G STAR RAM said: Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? Just think the Govt hasn't any decent economists on board, and afterall most of them can easily afford a rise in interest rates. Link to comment Share on other sites More sharing options...
i-Ram Posted July 17, 2023 Share Posted July 17, 2023 1 minute ago, RoyMac5 said: Just think the Govt hasn't any decent economists on board, and afterall most of them can easily afford a rise in interest rates. Setting interest rates and controlling inflation has nothing to do with the Government Roy. Other than that you pretty much nailed it. Stive Pesley, RoyMac5 and Norman 1 2 Link to comment Share on other sites More sharing options...
AndyinLiverpool Posted July 17, 2023 Share Posted July 17, 2023 20 minutes ago, G STAR RAM said: Although I understand the reasoning behind interest rate increases, basically to reduce spending power and to encourage people to save, I can't help but think that right now, increasing interest rates will achieve what is set out to do. The biggest impact is surely going to be to mortgage holders who are most likely already struggling from food price and inflation and the energy 'crisis'. With these 2 things supposedly being the main driver of inflation I cant understand how we get it under control, after all both are necessities so people are not just going to stop buying them. Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? What do you think the 'sinister' thing is? sage 1 Link to comment Share on other sites More sharing options...
RoyMac5 Posted July 17, 2023 Share Posted July 17, 2023 (edited) 21 minutes ago, i-Ram said: Setting interest rates and controlling inflation has nothing to do with the Government Roy. Other than that you pretty much nailed it. The Govt allowed the BoE to set the interest rates, knowing how the bank choose to deal with the rate of inflation. The Govt also set the BoE target for the rate of inflation. Edited July 17, 2023 by RoyMac5 i-Ram 1 Link to comment Share on other sites More sharing options...
i-Ram Posted July 17, 2023 Share Posted July 17, 2023 3 minutes ago, RoyMac5 said: The Govt allowed the BoE to set the interest rates, knowing how the bank choose to deal with the rate of inflation. The Govt also set the BoE target for the rate of inflation. Ahhh, yes, another one of Gordon Brown's wheezes. No more boom and bust Roy. RoyMac5 1 Link to comment Share on other sites More sharing options...
i-Ram Posted July 17, 2023 Share Posted July 17, 2023 46 minutes ago, G STAR RAM said: Although I understand the reasoning behind interest rate increases, basically to reduce spending power and to encourage people to save, I can't help but think that right now, increasing interest rates will achieve what is set out to do. The biggest impact is surely going to be to mortgage holders who are most likely already struggling from food price and inflation and the energy 'crisis'. With these 2 things supposedly being the main driver of inflation I cant understand how we get it under control, after all both are necessities so people are not just going to stop buying them. Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? To be honest GStar I don't have the first idea what to do, but as you suggest the policy of increasing interest rates is to suppress spending and demand. However, it has not been consumer demand that has been creating inflation, it has been war, disease, and other macro-economic factors like Brexit. Its all a bit of a s*** show. I look forward to learning from others how this might be addressed, particularly @Stive Pesleyand @uttoxram75 Stive Pesley, Norman, ariotofmyown and 2 others 1 4 Link to comment Share on other sites More sharing options...
Wolfie Posted July 17, 2023 Share Posted July 17, 2023 The problem is that the BoE only really have one tool to reduce inflation (interest rates) and it's meant to cure demand side inflation, which is the "normal" kind. Bugger all use against supply side inflation. Also it's not even as effective as it used to be, what with most people now on fixed rate mortgages. They're just hoping that by making everyone poorer, it'll mean that they can't buy stuff and companies have no choice but to reduce prices - ignoring the fact that they've been increased in the first place due to supply shortages and energy costs - not because of too much demand. Stive Pesley, G STAR RAM and therealhantsram 3 Link to comment Share on other sites More sharing options...
G STAR RAM Posted July 17, 2023 Author Share Posted July 17, 2023 2 hours ago, AndyinLiverpool said: What do you think the 'sinister' thing is? Well the only people benefitting from this whole situation are the large corporations. Read into that what you will. Over the last 3 years we seemed to have situation after situation which has just led to massive transfers of wealth. Probably just me being cynical. TimRam and Stive Pesley 2 Link to comment Share on other sites More sharing options...
Leeds Ram Posted July 17, 2023 Share Posted July 17, 2023 4 hours ago, G STAR RAM said: Although I understand the reasoning behind interest rate increases, basically to reduce spending power and to encourage people to save, I can't help but think that right now, increasing interest rates will achieve what is set out to do. The biggest impact is surely going to be to mortgage holders who are most likely already struggling from food price and inflation and the energy 'crisis'. With these 2 things supposedly being the main driver of inflation I cant understand how we get it under control, after all both are necessities so people are not just going to stop buying them. Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? There's nothing sinister behind it. We're just seeing the end of a 13-year-old administration out of ideas facing a structural economic crisis around 15 years in the making. Everything is breaking around us (Trains, NHS, Education, Housing, Roads etc. etc.) and the Truss disaster severely limited our ability to fix things. You add in the additional expenditure the government spent over covid and is still footing in plaster measures and we have a high tax high spend ineffective government. therealhantsram, sage, Stive Pesley and 2 others 4 1 Link to comment Share on other sites More sharing options...
Gee SCREAMER !! Posted July 17, 2023 Share Posted July 17, 2023 4 hours ago, G STAR RAM said: Although I understand the reasoning behind interest rate increases, basically to reduce spending power and to encourage people to save, I can't help but think that right now, increasing interest rates will achieve what is set out to do. The biggest impact is surely going to be to mortgage holders who are most likely already struggling from food price and inflation and the energy 'crisis'. With these 2 things supposedly being the main driver of inflation I cant understand how we get it under control, after all both are necessities so people are not just going to stop buying them. Does anyone agree with the BoE logic or, like me, believe there is something more sinister at play here? Interest rate rises are designed to stop frivolous spending. Most people are using credit cards and loans to cover the costs of staying alive. Roof, food ,water and petrol to get money for the first 3, not a last minute deal to Salou. It ain't 1990. They'll realise at some point. Link to comment Share on other sites More sharing options...
PistoldPete Posted July 17, 2023 Share Posted July 17, 2023 5 hours ago, RoyMac5 said: Just think the Govt hasn't any decent economists on board, and afterall most of them can easily afford a rise in interest rates. The Bank Of England is independent of Government. I agree the BOE grasp of economics has been poor, as has been shown by their forecasting. Link to comment Share on other sites More sharing options...
PistoldPete Posted July 17, 2023 Share Posted July 17, 2023 19 minutes ago, Gee SCREAMER !! said: Interest rate rises are designed to stop frivolous spending. Most people are using credit cards and loans to cover the costs of staying alive. Roof, food ,water and petrol to get money for the first 3, not a last minute deal to Salou. It ain't 1990. They'll realise at some point. Where is Salou? Cue another toilet joke, if those are still allowed on this forum. Stive Pesley 1 Link to comment Share on other sites More sharing options...
RoyMac5 Posted July 17, 2023 Share Posted July 17, 2023 13 minutes ago, PistoldPete said: The Bank Of England is independent of Government. I agree the BOE grasp of economics has been poor, as has been shown by their forecasting. Yes I know, and the Govt has no sway over them whatsoever... 😄 Link to comment Share on other sites More sharing options...
sage Posted July 17, 2023 Share Posted July 17, 2023 37 minutes ago, PistoldPete said: The Bank Of England is independent of Government. I agree the BOE grasp of economics has been poor, as has been shown by their forecasting. They didn't forecast Liz Truss for sure Link to comment Share on other sites More sharing options...
sage Posted July 17, 2023 Share Posted July 17, 2023 (edited) 39 minutes ago, PistoldPete said: Where is Salou? Cue another toilet joke, if those are still allowed on this forum. Just west of La Pineda No one say the B word or David will close the thread Edited July 17, 2023 by sage Link to comment Share on other sites More sharing options...
PistoldPete Posted July 17, 2023 Share Posted July 17, 2023 3 minutes ago, sage said: Just west of La Pineda No one say the B word or David will close the thread The B word? Brexit? Link to comment Share on other sites More sharing options...
sage Posted July 17, 2023 Share Posted July 17, 2023 1 minute ago, PistoldPete said: The B word? Brexit? no... Link to comment Share on other sites More sharing options...
therealhantsram Posted July 17, 2023 Share Posted July 17, 2023 1 hour ago, Leeds Ram said: There's nothing sinister behind it. We're just seeing the end of a 13-year-old administration out of ideas facing a structural economic crisis around 15 years in the making. Everything is breaking around us (Trains, NHS, Education, Housing, Roads etc. etc.) and the Truss disaster severely limited our ability to fix things. You add in the additional expenditure the government spent over covid and is still footing in plaster measures and we have a high tax high spend ineffective government. Id give this 6 likes if I could Leeds Ram 1 Link to comment Share on other sites More sharing options...
Steve How Hard? Posted July 17, 2023 Share Posted July 17, 2023 1 hour ago, sage said: Just west of La Pineda No one say the B word or David will close the thread B word? Bognor? Link to comment Share on other sites More sharing options...
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