People just need to cut back & they will be ok

[nameschangg]

Following a discussion on the radio about mortgages/col I made the comment that even for those that can afford the increased mortgage costs it's difficult to get one's head around paying more just to service debt. Colleague replied that's exactly the problem & the media are over egging it. His argument was recent buyers have stress tested & many will still have seen jumps in house value. He said any older buyers will likely have a ton of equity so can just shift to interest only or sell. His main argument was people can afford the rises & they just don't want to give up the nice things they are used too. He said the gov know this & know how much people saved in lockdown. Admittedly everyone in the office did say they saved quite a bit (including myself). I argued that not everyone fits that criteria but he believes the majority do & the media needs to stop scaremongering. Does he have a point?

There's a huge sense of entitlement within consumerism. I've got friends who are single, have bought £200-300k 3 bed houses, go out weekly, eat out more than weekly, shop in Sainsburys, book exotic holidays, new clothes every week, redecorating and renovating regularly ... then say that the government should be bailing out mortgage costs. You can't have everything.

How regularly can you really renovate your house?

And buying clothes every single week? Really?

My best friend and I used to argue about how much money we’d “need” in a lottery win to live our perfect life. I thought a million would be perfect, enough to pay off the mortgage, do up the house, do nice things, live off the capital (and the interest in times gone by) and still have plenty left to give to friends and family. She said that wouldn’t be nearly enough, she’d want loads of holidays, but how many holidays would you actually want in a year? How many holidays would it take to spend those multi-millions?

So you have suppressed demand for services because of lockdown meaning you can't go to that cinema or restaurant or concert.

Then the Government creates £500 billion and injects it into the economy in the form of bounce back loans, furlough, PPE contracts, eat out to help out etc.

Basic economic theory rather than Facebook will tell you that printing a truck load of money will result in higher inflation.

Yes Brexit played a part which is why UK inflation is higher than the EU average because it costs more to import stuff particularly food. And Yes the war in Ukraine had a massive impact on energy prices but these rises are starting to come down.

We fit your colleagues description farily well. We're expecting a massive jump in our mortgage cost in 2 months time £800-£1,000 a month more than we pay now. We moan about it bitterly to each other (and not a word elsewhere as we're well aware that some people are really really struggling and stressed to the eyeballs with it all) but we are fortunate we can suck it up with being careful with our spending.

What really pisses me off though is that once we've done as much saving on groceries, days out, and other stuff as we possibly can, the things we can then cut out of our budget if prices continue to go up are, the cleaner, the window cleaner, the gardener, yoga classes, weekly PT sessions, haircuts etc. Nobody is going to weep for us no longer being able to afford these things (and nor should they) but each of these is money we would be taking directly from someone who is self employed. People whose work we really value and no doubt would start to struggle if their clients have to start considering where to cut their cloth.

This is what's making me most angry, the thought of having to chose which of these people we screw over in what order if it comes to it. Couldn't give a stuff about not going on holiday and swapping to Aldi etc.

The only people who would have saved during covid are those who spend a lot on holidays, going out, restaurants and other leisure activities. Ie. People with disposable income to spend on this.

The usual expenses carried on and remember some people only got 80% of their wage during this time too.

I feel we lost/wasted a huge opportunity to restructure society and work and how we do things, after the early days of lockdown, when people found they could WFH perfectly well, when people heard birdsong in the absence of all the usual traffic, when people were realising that it’s the low-status, low-paid workers who actually keep the country going - keyworkers, not billionaire “wealth creators”.

But no. Our paylords and political masters had no interest, wanted things “back to normal” because normal is so much more lucrative for them.

They say every country gets the leaders it deserves, which says it all about the Great British electorate.

Nobody would've been happy with a permanent lockdown type of existence. Lots of people's mental health suffered due to isolation.

You can’t say “nobody” would have liked it - I loved it for one - but I didn’t mean we should have stayed in lockdown forever, FFS, just maybe rejig our priorities as a nation, reward and fete the people who actually keep the country going rather than the billionaires.

Many have already ‘cut back’ as much as they could die to increasing fuel costs, council tax and general living costs… the mortgage increase is going to cripple some families… my friend is having to sell because when the fixed rate they’re on ends next year they won’t be able to afford the huge monthly increase! And that’s 2 full time career people!

Borrowing more was an option until PM Liz Truss crashed the economy, increasing the cost of servicing our debt to more than we could afford.

In order to avoid bankruptcy the UK government agreed to very tight rules. This winter is going to be hard for many who will have to cut further back and won't be OK.

Just one more way this incompetent, corrupt government has shafted us.

@TooBigForMyBoots

"Borrowing more was an option until PM Liz Truss crashed the economy, increasing the cost of servicing our debt to more than we could afford."

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Truss' plan went wrong precisely because it involved borrowing more debt to fund tax cuts and keeping spending the same which spooked the debt markets causing market interest rates to rise.

After Truss went these proposed tax cuts were reversed but the future uncertainty and future risk of poor Conservative economic policies was then priced into higher interest rates to lend to the Government.

Right now the Government spends more on the interest on Government debt than it does on education.

We’re on decent wages and don’t live in London. We’ve already cut back - old car, no foreign holidays, shop in Aldi etc. I don’t know where he expects these cuts to come from. I often wonder how other people cope when we (on a fixed mortgage) have to be so frugal.
I run my own business which is successful and a luxury service. I am aware that if the price of basics continues to rise, then my service would be one that people would cut. We can’t have an economy where people cut back continually. It should be the opposite.

PM Truss's mini budget made clear that Britain had no Post Brexit plan for growth 6 years after the vote to Leave. It also clarified the contemp that the government had for UK citizens.

Tory supporters heard "tax cuts and more bankers". Everyone else realised just how fucked we are.

I suspect there’s something seriously wrong - atypical - with Liz Truss’s brain. During her leadership campaign one of her former Oxford tutors wrote about her CERTAINTY that she was right, however much contradictory evidence was offered. Which is exactly how she was with her insane “mini-budget”. Even now she thinks she was right, and it was just that she went too fast about it.

Why can't we blame those in that situation? Surely they have imagination? Did they not listen when they took out the loan? In this day and age whenever you take out ANY loan - mortgage, car etc the provider has to legally draw your attention to the fact that interest rates may change etc etc.

@TooBigForMyBoots

"PM Truss's mini budget made clear that Britain had no Post Brexit plan for growth 6 years after the vote to Leave"

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Truss's mini budget also made clear that she was massively out of her depth and had no basic understanding of economics.

At a time when debt markets were spooked from massive Covid debts of Governments around the world and when the US was winding back on its QE programme of buying back US Government debt that helped prop up the debt market. Liz then decided to go against the trend by trying to increase Government debt and also not giving any pre warning or warming up of the markets to this change of policy. All in order to finance tax cuts.

It was going to end in tears from the moment she announced it. But she wanted something bold to be seen to be doing something.

As Black Friday showed the markets will always win over flawed Government policy.

Food prices aren’t coming down. Food inflation is slowing. This simply means food is getting more expensive a bit less quickly. And fuel is forecast to rise again in autumn, while the government help has ended.

The problem wasn't that she wanted to borrow. The problem was her "plan" for the loan and what that said about the state of the country and the government. Investment in, for eg. science and engineering sectors specialising in farming/green energies? That would not have been a problem.

It's like requesting a business loan to expand part of a business vs requesting a business loan to buy a load of lottery tickets. Her plan would have been debated out in any triple period A-level Economics class in school.

It didn't fail because she went too fast.
It didn't fail because of misogyny.
It didn't fail because of the leftist money markets.
It failed because it was never going to work.

Despite killing the thread I need to add one more thing:
It's important to remember that not everyone is poorer because of the Trussterfuck Kamikwaze budget. Some made a mint from it. Particularly those who attended a champagne reception for Chancellor Kwarteng just hours after he tanked the UK economy.

I expect some people can afford the rises but I should think there are many people who will be really hard hit by them. And it's awful for renters too because landlords will often raise their rent to cover increased costs. I think there is not enough coverage of the plight of renters - along with insecurity of tenure, they are paying so much in rent that it becomes almost impossible for many to save to buy their own homes.

You didn’t kill the thread, @TooBigForMyBoots - it’s just that Liz Truss’s tenure was so brief and so violent, we can’t quite believe it actually happened. So whenever we see her name we’re reminded, we stop in our tracks and pull similar faces to the woman on the left of this photo.