BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

A bleak assessment Peter but I agree with you, we have never been under threats like the ones we face now.
I have suspected for a long time that the world we live in is too complicated to be successfully controlled by humans. We see so many 'unexpected' consequences like the collapse of data systems during upgrades or maintenance. The more we cede control to the algorithms the more vulnerable we become. I don't see any end to it.....

[Tizer]

Some ammunition for Sunak in the PM debate...
`Cutting UK taxes now would be a mistake, says IMF' LINK

[Stanley]

I heard that report also Peter and thought exactly the sane thing. I hate to admit it but Sunak is right, cutting taxes is barmy and only being done as a bribe.
(Now let's see, who was it who said there was room for tax cuts before the next General Election?)

[Tizer]

That was then, this is now! (Politicians' motto.)

[Stanley]

I got caught out this morning by a cunning web site. Missed a button somewhere and finished up paying £8 for delivery of a 100ml bottle instead of simple Royal Mail postage.... It hurts but nothing I can do about it now. Must look at the screen more carefully....

[PanBiker]

Was the item not available locally?

[Tizer]

Well at least he should get the bottle quickly!
Stanley, have any of your relatives or close friends got Amazon Prime membership? If so, you could send them a link to what you want on Amazon and they could order it to be delivered (for free) next day directly to you. You could then pay your collaborator by bank transfer. That's what we do.

[Stanley]

No Ian, if it had been I wouldn't be online...
Peter, not interested, I refuse to have anything to do with Amazon even by proxy.
See THIS report from the Institute for Fiscal Studies particularly the section on the disparity between the top 10% and the bottom 10 percentile. It sets out quite clearly how we are becoming one of the most poverty stricken nations in the developed world. Ask yourself how did we get here?
it's a disgrace.

[Tripps]

I read today that the Bank of England is about to abolish the mortgage affordabilty stress test, which has been applied to applicants for some time now. Forgive me if the detail is not accurate, but the test has assessed mortgage applicants as to their ability to continue to afford the payments if the rate of interest went up to 5% ( ? ) from the available historic low rates.

Having been below 2% for many years inflation is now at over 9% and rising.

The decision was described by the FT as "obtuse". I could suggest several other stronger words.

Let;s start with crazy and ridiculous, and perhaps even sinister.

[Stanley]

I have to agree with you David. I saw the same reports and my first thought was that it was a ploy to stimulate the housing market which will suffer as interest rates climb under the influence of inflationary pressures. Property is the asset that backs many debts to banks and if the price falls so does the security of those debts.
My best guess is that it's a cunning wheeze.....

[Tizer]

I read today that the Bank of England is about to abolish the mortgage affordabilty stress test, which has been applied to applicants for some time now.

I thought they already had ditched it, there's been a lot about it in The Times finance pages but I guess that must have been warnings of its expected arrival. The banks are already pushing lifetime mortgages.

Even Musk is getting out of bitcoin now...
`Elon Musk's Tesla sells most of its Bitcoin holdings' LINK

[Stanley]

And wasn't it part of the buffoon's contribution to the Housing Problem that young people should be given open-ended mortgages....
BTW re. Ian asking whether I could have got the offending item on line, can I point out in my defence that I spent £90 at Huppach's jewellers on my new watch.....The local economy is, as always, being supported!

[Stanley]

I see that Heathrow is saying they have made a loss. Their performance figures are meaningless because they pay an exorbitant rate of interest to their parent company in Europe. This is a ploy to cut back on the UK tax they pay.....
A cunning wheeze that the Treasury seems unable to stop.....

[Stanley]

See THIS report of the profits being taken by the energy companies....
You may well ask how this can happen. Nye Bevan had the answer to that.
Dockers at Felixstowe have overwhelmingly backed a strike. Rail strikes. NHS and teachers....
What a summer.

[Big Kev]

See THIS report of the profits being taken by the energy companies....

British Gas owner Centrica said adjusted operating profit for the six months ending in June rose to £1.34bn from £262m a year earlier.

The rise in profits came from the company's nuclear and oil and gas business, rather than from the British Gas energy supply business which performed much worse. Many firms have been unable to fully pass on the rise in wholesale gas prices to customers.

[Stanley]

When Centrica restructured and split the company into different segments, domestic, industrial, distribution etc. it was said at the time that this had been done to obscure the reasons for any spikes in income and what was happening to them. Under the old structure profit in one sector subsidised the rest etc. Not any more .....

[plaques]

The latest study Savings is showing that round 20% of people in England have no savings that they can draw on to absorb the rises in the cost of living. Many people are turning to borrowing money at rates 19%+ on credit cards that can only make their position worse. the chart shows the areas of no savings but the problem doesn't stop there many others have minimal savings where a unexpected bill would tip them into debt.

.

savings 1.jpg

[Stanley]

I don't understand that graphic. If taken literally it means there are fewer people in the NW and NE with no savings than anywhere else and the West Midlands is the poorest part of the country. Is that right? I would have thought the NE and NW were the most deprived part of the country. (Except of course for some London Boroughs.)
I think 19% interest is optimistic for most borrowers Ken. I really fear for the next few months, I think we are going to see an economic crash..... (And the Tories have managed to make sure nobody is in control until November and even then will be focussing on bribes.)
I have been advising my kids for months to cut spending to the bone only doing what is essential. This augurs very badly for retail sales and Xmas!

[plaques]

If taken literally it means there are fewer people in the NW and NE with no savings than anywhere else and the West Midlands is the poorest part of the country. Is that right?

That's the big problem with quoting averages and not having complete data. The report also quotes that the people most likely to have zero savings are pensioners and young people but if pensioners in a particular area die younger then there will be less of them similarly young people may move to more affluent areas but still have no savings.

Then we have ...
The average size of a saving pot across the UK totals £5,677 per household I'll bet you and a lot of other people didn't know they had this much in the bank but I dare say Rishi Sunak bank account may be distorting the average figure. .

The report is only an indicator of savings and borrowing trends which we can safely say is downhill.

[PanBiker]

Part of the problem is the credit card payment regime. We use our card regularly but always pay it off in full. It was about £975.00 this month. Minimum payment if we wanted to pay it on the drip was £19.25. How long would that take to pay back?

[Stanley]

"Part of the problem is the credit card payment regime."
Dead right Ian.I shudder to think how many poor people are taking out the new cards at high interest who will take anyone on no matter what their history. If you are facing rent arrears, food bills and kid's clothes what alternative is there? I too am lucky enough to be in a position where I can clear my card every month but I am well aware that we are in a minority.
A storm is coming, it will start to hit us in October when all the contrary factors will hit at the same time and no PM in post and fully briefed, therefore no possibility of direct government action even if it was policy. It is going to be a Bleak Winter and a Silent Spring....
This in one of the world's biggest economies. Ask yourself how we got here......

[Tizer]

Another factor driving up debt is the assumption by the government, manufacturers and retailers that people will be able to switch to much more expensive electric cars simply by taking out a bigger loan. Likewise changing from gas boilers to air source, hydrogen etc. Many homes will soon need much more insulation on their external walls and that's very expensive too.

[Stanley]

I often wonder if policy-makers live on a parallel plane. They assume everyone runs a car, pays income tax and takes foreign holidays. This mythical family also has a cash pot in hand due to not being able to spend money during lock-down.
The reality is that many working families are so poor they rely on food banks, don't earn enough to pay tax and are maxed out on their cards already. These are the people who can't afford rent or anything for the kids. They are the ones who will be hit first and hardest, indeed it is happening now. It's a national emergency and we have Truss and Sunak arguing about the size and timing of tax cuts....
I suggested that we live in a looking glass world, it's worse than that, it's dystopian.....

[Stanley]

Later, lots of talk about inflation getting up to 15 % next year and later today the BofE is expected to announce a .5% increase in base interest rate, the biggest for 27 years. This is just what many mortgage holders have been fearing.
It was interesting later that during an interview with the CEO of Rolls Royce, when asked if he expected recession next year, avoided answering. Things are not shaping up well.....

[Stanley]

It's a .5% raise accompanied by a prediction that we will go into 'prolonged recession' by the end of this year and inflation will peak at a minimum of 13%. Deep Joy.....