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Original poster

Inflation and interest rates

335 replies

Sallywallywoowoo · 12/07/2023 10:20

The BOE keep raising rates to curb inflation. I understand that is the only thing that the BOE can actually do and so they've got no choice. But isn't there anything else the govt can do? It's genuinely scary seeing articles on the BBC how 1 million mortgage holders will see their payments increase by £500pm by 2026. Literally nobody I know could afford that. And it doesn't even include renters in that number. Presumably loads of them are in the same boat or worse. If their LL mortgage costs go up, then so will their rents.
It seems to me the financial burden could be spread more fairly. Anyone who owns outright isn't feeling the pain. And for the most part that group is likely to be the ones who could most afford it. Especially if they have a load of savings that they're now getting a nice high rate of interest on. Surely things COULD be done differently if the will was there?

OP posts:
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StormShadow · 12/07/2023 19:51

We definitely need to merge income tax and NI contributions. The way NI functions is grossly unfair. Pensioners being exempt is obviously part of that, but there are other problems too. Like the way it's disproportionately levied on income from work rather than unearned income.

RainRains · 12/07/2023 20:26

So because I have paid off my mortgage - I have to pay pff your mortgage? No thanks. I went through the high interest rates of the 2000’s. Not going to pay for you to.

wutheringkites · 12/07/2023 20:29

Why are posters assuming that op thinks others should be paying off her mortgage? This isn't what she said.

The point is that raising interest rates doesn't seem to be an effective approach so far and it's having a disproportionate impact on people who recently bought.

wutheringkites · 12/07/2023 20:30

RainRains · 12/07/2023 20:26

So because I have paid off my mortgage - I have to pay pff your mortgage? No thanks. I went through the high interest rates of the 2000’s. Not going to pay for you to.

Well that's good because literally no one here has suggested that you pay anyone else's mortgage.

StarDolphins · 12/07/2023 20:32

I own my property outright. In my early 20’s I started out in a mobile home with nothing, I saved, I did without & then bought a flat, then a small house etc. I hammered overtime where I could to do this. Have never had a well paid job.

I would massively resent my taxes being raised in order to spread the financial burden.

wutheringkites · 12/07/2023 20:37

@StarDolphins

I massively resented lockdown and working with a 1 year old at home while paying people to get furlough but hey, we're all in this together to get this fixed now right? Right?

Wimbo · 12/07/2023 20:40

If taxes are raised it’s not to ‘help the financial burden of people with mortgages’, since you know, people with mortgages also pay tax 🤔

It’s because those are the instruments governments use to try to curb inflation.

wutheringkites · 12/07/2023 20:42

@Wimbo

I don't understand the views on this thread. There seems to be no awareness whatsoever about why interest rates are rising or that there are additional/alternative measures that could be taken.

People seem perfectly happy for an ineffective tool to be used, as long as it's not against them.

StarDolphins · 12/07/2023 20:42

wutheringkites · 12/07/2023 20:37

@StarDolphins

I massively resented lockdown and working with a 1 year old at home while paying people to get furlough but hey, we're all in this together to get this fixed now right? Right?

Both resentful then! I has to home school while wfh.

StarDolphins · 12/07/2023 20:44

*had

wutheringkites · 12/07/2023 20:44

@StarDolphins

So why exactly do you think that mortgage holders as a specific group should feel the pain in getting inflation down when many non mortgage holders would have benefited from Covid money?

Why shouldn't that pain be shared nationally?

StarDolphins · 12/07/2023 20:45

wutheringkites · 12/07/2023 20:42

@Wimbo

I don't understand the views on this thread. There seems to be no awareness whatsoever about why interest rates are rising or that there are additional/alternative measures that could be taken.

People seem perfectly happy for an ineffective tool to be used, as long as it's not against them.

So what would you suggest as a solution then?

wutheringkites · 12/07/2023 20:49

If you cast your mind back to the Truss clusterfuck last year - one of the main reasons we had such a rough time was because the markets thought taxes should be increased, not decreased.

The right thing to do last year was to raise taxes. Even financial investors thought so.

The spiral we went into meant that the BoE was literally printing money to keep us afloat while also raising rates to bring inflation down. It was a fucking mess.

Tax increases are not always a bad thing and pushing people further into debt/ the country into recession doesn't really benefit any normal person.

StarDolphins · 12/07/2023 20:52

wutheringkites · 12/07/2023 20:44

@StarDolphins

So why exactly do you think that mortgage holders as a specific group should feel the pain in getting inflation down when many non mortgage holders would have benefited from Covid money?

Why shouldn't that pain be shared nationally?

What pain are you suggesting for the non mortgage holders? You know, the ones that have perhaps worked all their lives & are maybe nearing retirement or the ones that don’t have much money, live in a small property that they scrimped for & are on a low wage struggling financially too?

wutheringkites · 12/07/2023 20:54

@StarDolphins

Higher VAT on luxury goods would be fair.

Making NI fairer.

Generally looking to tax wealth rather than income.

Increases to corporation tax.

wutheringkites · 12/07/2023 20:57

@StarDolphins

I'm not sure why you split the country into mortgage holders and non mortgage holders. It doesn't make sense.

StarDolphins · 12/07/2023 20:57

wutheringkites · 12/07/2023 20:54

@StarDolphins

Higher VAT on luxury goods would be fair.

Making NI fairer.

Generally looking to tax wealth rather than income.

Increases to corporation tax.

Yes ok, they are good ideas. Won’t impact me because I don’t have a lot of income to buy luxury goods, nor am I wealthy!

I just don’t want any more of my wages to go.

wutheringkites · 12/07/2023 20:59

@StarDolphins

Well don't assume you are immune to this. Businesses also borrow money and the BoE is trying to create a recession and increase unemployment.

Even non mortgage holders who think they're ok could face job loss - this is literally what the BoE and govt want to happen.

grass321 · 12/07/2023 21:06

If you cast your mind back to the Truss clusterfuck last year - one of the main reasons we had such a rough time was because the markets thought taxes should be increased, not decreased.

That's not strictly true. The markets didn't like the fact that the tax cuts were unfunded. (And before the pile on comes my way, I speak to bond fund managers regularly as part of my job and they're as good a source as any).

StarDolphins · 12/07/2023 21:15

wutheringkites · 12/07/2023 20:59

@StarDolphins

Well don't assume you are immune to this. Businesses also borrow money and the BoE is trying to create a recession and increase unemployment.

Even non mortgage holders who think they're ok could face job loss - this is literally what the BoE and govt want to happen.

I absolutely know this, I really do. I own outright yes but that doesn’t mean I’m protected.

I got the impression (rightly or wrongly) from op that non mortgage payers should somehow be helping the mortgage payers because we’re in a better position & likely have savings. That just isn’t true.

Singingthesong · 12/07/2023 21:18

I don’t have a mortgage or debt. Instead, I have had savings that have had zero interest for years because we have lived in a world where debt is practically free. I have zero interest (see what I did there) in subsidising anyone else’s debt.

Original poster
Sallywallywoowoo · 12/07/2023 21:24

I got the impression (rightly or wrongly) from op that non mortgage payers should somehow be helping the mortgage payers because we’re in a better position & likely have savings. That just isn’t true.
You're absolutely wrong. That isn't what I've said or what I think at all. And FWIW I am equally worried about private renter's who will have the costs passed on via their landlords in rent increases. I just don't think that

  1. rate rises will work - they don't seem to be so far,
  2. it's fair that a section of society - ie those who bought fairly recently, and those renting privately should be the ones to shoulder all the pain. I'm actually not in either of those catigories actually. I have a small-iah mortgage that I've been paying since 2014, so while I'm not looking forward to having to cut out holidays and our gym membership for instance, I'm not especially worried about losing our home.

I think more should be done through the tax system NIC changes is a great idea IMO

OP posts:
Original poster
Sallywallywoowoo · 12/07/2023 21:27

And people complaining about how they haven't had enough interest on their savings?? Honestly. Spend your savings then. Why should you expect loads more free money (morally) just because you've already amassed a load?

OP posts:
ShanghaiDiva · 12/07/2023 21:35

Sallywallywoowoo · 12/07/2023 21:27

And people complaining about how they haven't had enough interest on their savings?? Honestly. Spend your savings then. Why should you expect loads more free money (morally) just because you've already amassed a load?

those that borrowed at 0.99% were the ones who got the ‘free’ money.

meddysam · 12/07/2023 21:37

There should be a wealth tax, too
much intergenerational inequality & burden on income particularly as wages have been shit for years.

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