Increasing the interest rate to 5%, is this really the fairest way to slow inflation?

So we should have a little less in the bank in order to enable people to buy their non-essential ‘essentials’ and contribute ‘individuality’ to society? I don’t think so …
Fortunately the whingers are not my neighbours. You and I inhabit very different worlds I think Daisy.

Germanshepherdsmum

*Daisy*. Decisions as to whether to buy non-essential items are easy to make if one realises that they are non-essential. People who have mortgages are hardly ‘the least well off’.

Btw I have never boasted about the very difficult time I went through as a single mother. It’s something I will never forget. Non-essential items certainly didn’t feature in my expenditure. To this day I don’t buy ready meals, a takeaway features perhaps two or three times a year, my phone is second hand, I buy probably two items of clothing a year, and I have never had my nails done - and unlike those complaining about their mortgages, I can very easily afford all these things. I’m just waiting to see someone moaning about their mortgage whilst sporting fake nails, lashes, lip filler and hair extensions - coming to your screen any day now.

You seem to believe that you are the icon of how to make the world work, or at least this country. I, on the other hand, think that whether others have their nails done or not is none of my business.

We are all different and those differences make a better world. Rather than cloning those who continually voice their disdain and even contempt for those who don't fit their little boxes, I look forward to us all being able to thrive and contribute our own individuality to society. Obviously, this may mean you and I have a little less in the bank, but that is the price we pay for a thriving society of which we are all a part.

I don't think any great leap forward has ever been carried out by little old people standing about and pulling apart neighbours, about whom they have no actual knowledge.

GG13 if only life were that simple. Flat for sale for 9 months with offers over £350k results in one offer of £310k then uplifted to £325k Bought 5 years ago for £365k . No sale as yet.

GrannyGravy13

ronib

Anyone selling a 2 bedroom flat in the south east is looking at a loss of about 30 to 40k over the last 5 years if needing to sell now. So a few eyelash extensions are okay by me but might be a bit heavy on the eyelids!

Just been on Rightmove for my part of the South East, two bedroom flats are going from £350,00 upwards, no downward trend as of yet, no doubt it will come though.

The majority for sale were new builds.

Same here.

Germanshepherdsmum

Of course I have paid off my mortgage growstuff. I’m 72. I first had a mortgage at the age of 19 so over the years I have seen plenty of interest rate rises.

I had a mortgage when I was 28 - single female. Unfortunately, I fell of the mortgage ladder as a result of ill health and an ex-husband I would rather not describe. The house I was forced to sell following my divorce would be worth nearly a million now. Therefore, I don't have an asset which could cushion me against the current situation. Maybe I see things from a different perspective.

ronib

Anyone selling a 2 bedroom flat in the south east is looking at a loss of about 30 to 40k over the last 5 years if needing to sell now. So a few eyelash extensions are okay by me but might be a bit heavy on the eyelids!

Just been on Rightmove for my part of the South East, two bedroom flats are going from £350,00 upwards, no downward trend as of yet, no doubt it will come though.

The majority for sale were new builds.

Of course I have paid off my mortgage growstuff. I’m 72. I first had a mortgage at the age of 19 so over the years I have seen plenty of interest rate rises.

Germanshepherdsmum

You’ll blame the state of the economy on my lack of spending at this rate growstuff. I have never felt obliged to spend money just to keep someone else in work.

I don't do blame - result of years of counselling.

You’ll blame the state of the economy on my lack of spending at this rate growstuff. I have never felt obliged to spend money just to keep someone else in work.

Allsorts

Maisie,
If you are interested in inflation please do a little research into the 1978/ 1979 Winter of Discontent under Labour, when the country really was broke, Thatcher got in because Labour gave up, that year interest rates soared to over 17% as Tories were left a sweet note in the treasury, from Labour, the kitties empty hold luck. You can't Norris and not take tge consequences, there isn't really a free lunch.
We have had a Pandemic, the world almost stood still, the boring and very expensive Brexit battle where instead of dealing with the economy we had to battle a load of bad losers worried mostly about their holiday homes. Now instead of getting on with things other little groups are not interest in getting things on track, just to get heard about some perceived slight.

Others have answered you, Allsorts so I don't feel any need to add to their responses, but this discussion has set me thinking about our national recovery.

After WW2 the UK was genuinely completely broke, living on handouts from the USA.

But under Attlee's Labour government there was massive state investment in setting up the NHS and the Welfare state. There was also a huge programme of making good war damage to housing, slum clearance and new building. All of this created jobs and boosted the economy. And, until the 1970s, with the energy price shocks, the domestic economy was doing very well, supported by both parties when in government.

I know it wasn't perfect and there were sectors which can be strongly criticised, but on the whole, life was improving for most of the population. All stemming from the willingness of the state to invest in itself.

Germanshepherdsmum

*Daisy*. Decisions as to whether to buy non-essential items are easy to make if one realises that they are non-essential. People who have mortgages are hardly ‘the least well off’.

Btw I have never boasted about the very difficult time I went through as a single mother. It’s something I will never forget. Non-essential items certainly didn’t feature in my expenditure. To this day I don’t buy ready meals, a takeaway features perhaps two or three times a year, my phone is second hand, I buy probably two items of clothing a year, and I have never had my nails done - and unlike those complaining about their mortgages, I can very easily afford all these things. I’m just waiting to see someone moaning about their mortgage whilst sporting fake nails, lashes, lip filler and hair extensions - coming to your screen any day now.

Have you paid off your mortgage?

ronib

Anyone selling a 2 bedroom flat in the south east is looking at a loss of about 30 to 40k over the last 5 years if needing to sell now. So a few eyelash extensions are okay by me but might be a bit heavy on the eyelids!

I guess people could spend on nail extensions once they're weighed down by eyelashes (or boob enlargements).

karmalady

Just remembering, when it was not at all uncommon for people to have a lodger or for someone to have a room in a house. I remember the time when mil mentioned the lodger, I thought nothing of it.

It has been difficult, many times in past years, for people to make ends meet. People did used to make do. Nowadays it does seem like instant gratification is the norm, hence money disappearing. Having cash in various envelopes got me through some very tough times. Having an app would not have the same mental spending restriction

Do you want to crash the economy too?

Anyone selling a 2 bedroom flat in the south east is looking at a loss of about 30 to 40k over the last 5 years if needing to sell now. So a few eyelash extensions are okay by me but might be a bit heavy on the eyelids!

Oh, and my car is 17 years old.

Daisy. Decisions as to whether to buy non-essential items are easy to make if one realises that they are non-essential. People who have mortgages are hardly ‘the least well off’.

Btw I have never boasted about the very difficult time I went through as a single mother. It’s something I will never forget. Non-essential items certainly didn’t feature in my expenditure. To this day I don’t buy ready meals, a takeaway features perhaps two or three times a year, my phone is second hand, I buy probably two items of clothing a year, and I have never had my nails done - and unlike those complaining about their mortgages, I can very easily afford all these things. I’m just waiting to see someone moaning about their mortgage whilst sporting fake nails, lashes, lip filler and hair extensions - coming to your screen any day now.

Just remembering, when it was not at all uncommon for people to have a lodger or for someone to have a room in a house. I remember the time when mil mentioned the lodger, I thought nothing of it.

It has been difficult, many times in past years, for people to make ends meet. People did used to make do. Nowadays it does seem like instant gratification is the norm, hence money disappearing. Having cash in various envelopes got me through some very tough times. Having an app would not have the same mental spending restriction

Germanshepherdsmum

And coffees and getting the nails done and the beauty treatments as growstuff mentions. I have no sympathy for those who bleat about their increased outgoings but still expect to have all these things.

I have never been able to afford coffees and nail bars. In fact, I probably don't contribute much to the economy at all because I have very little left after I've paid my rent and bills. However, if everybody were like me, nobody could afford holidays, house improvements, cinema/theatre visits, restaurants, new cars, pets, etc etc. Millions of people are employed in providing those kind of services. There really aren't enough jobs for them. Not only that, but the problem the UK has is that there's a mismatch between the skills needed and those that people have.

M0nica

MaizieD I am not arguing the case for this measure, just asking what we should do in its place?

I suggested one solution in my first response to you, MOnica, and others have said the same. Instead of raising interest rates the BoE should be cutting them. It is completely illogical to use a measure supposedly to cut inflation which is actually contributing to it.

In addition I think that the goverment should stop claiming there's no money and telling lies about public sector wage increases being inflationary by causing a wage/price spiral, neither is true. Pay the public sector workers,, invest the needed funds in the NHS, Education and the Criminal Justice system and the invested money will circulate in the domestic economy, starting to revive it.

Once businesses can see that there is money in the domestic economy they might judge that it's worth investing in themselves.. Might even attract some foreign investment.

What is that old saying? "You have to speculate to accumulate"? Perhaps, as the supposed 'party of business (and, ironically, supported by people who've done just that) the tories should have thought along those lines...

Anyway, MOnica, as I noted earlier, you're an economist, aren't you? I'm really surprised that you have no ideas to offer us (and I mean that genuinely, mot having a pop at you)

GrannyGravy13

Please remember that the people that are providing what have been called non essential services have either mortgages or rent to pay.

Cannot believe that anyone would be advocating for people to lose their employment.

I find it quite mind-boggling too.

Germanshepherdsmum

The same as happens all the time when people are made redundant growstuff - there are plenty of vacancies we are told. I refuse to argue in favour of people who expect help with their mortgage payments whilst spending on these non-essential things.

I expect people will cut back on non-essential things and when millions of people do that, the economy will go into recession. That's how it works.

Please remember that the people that are providing what have been called non essential services have either mortgages or rent to pay.

Cannot believe that anyone would be advocating for people to lose their employment.

You really have no idea, do you GSM. If you once did, as you like to boast, you have forgotten all you ever knew of being in position where the decisions were simply not yours to make.

People being callous about the least weĺl off is not going to improve society or the economy.

The same as happens all the time when people are made redundant growstuff - there are plenty of vacancies we are told. I refuse to argue in favour of people who expect help with their mortgage payments whilst spending on these non-essential things.

And coffees and getting the nails done and the beauty treatments as growstuff mentions. I have no sympathy for those who bleat about their increased outgoings but still expect to have all these things.