UK Interest/Mortgage Rates – WHO’S in control?

[Isitmebut]

The Bank of England on ‘forward guidance’ had indicated that interest rates (the Base Rate) was unlikely to go up from it’s 0.50% all time low UNTIL the UK unemployment rate fell to 7.0%, a level not expected until 2016 – so the fall in unemployment to 7.1% this month, is causing interest rate confusion, but who actually controls the interest rates that matter e.g. 2,3,& 5 - year fixed rate mortgages?

The short answer is NOT the Bank of England, it is the capital markets, as it is the buying and selling of the major institutional investors e.g. global pension funds, in global government bonds like UK Gilts, that determines the interest rates on every maturity EXCEPT the very short dated Base Rate, in the 2, 3,5,7,10 and 30-year bond issues.

So why does this matter to the likes of 2 to 5-year (and beyond) Fixed Rate Mortgages?

It matters as the government bond yield curve from 2 to 30-years ESTABLISHES THE FLOOR on bank lending rates, as banks can rarely borrow cheaper from the capital markets than the better quality/rated government to fund themselves, and lend money on to businesses and consumers.

My point being, is that with the best will in the world, the BoE does not control commercial interest rates, IT IS THE UK GOVERNMENTS CREDIT WORTHINESS (AND EXPECTED FUTURE INFLATION RATES) THAT DETERMINES our interest rates, as it is that market perception that means there are MORE buyers than sellers of UK Gilts, which brings interest rates down.

So will the BoE raise the Base rate from 0,50% anytime soon? It is highly unlikely, but in the February inflation report, they are likely to publish new guidelines, possibly based on other economic data than the traditional inflation and more recently targetted unemployment, reports.

What we have to remember is that the Base Rate in ‘normal’ times can be 2 to 4% OVER the UK inflation rate, now well below 3%, so once the BoE believes that UK economic conditions is anything like normal, the Base Rate and 2 to 30-year UK Gilts will (relatively) substantially move UP in yields (interest rates), in turn driving bank Fixed Rate Mortgage rates higher.

Many fear that a knee jerk rise in interest rates will both choke off the economic recovery and cause a correction downward in home prices, but clearly as everyone expects interest rates to rise, the MORE businesses and home owners that lock in their borrowing costs for years ahead, the less the economic and house price fallout will be. In my opinion.

For the financial year 2013/14 the Budget Deficit was £107 billion, down from £157 billion in 2010, it could have been more if not reversing Labour’s National Insurance and Fuel Duty rises, help for pensioners, the lower paid and policies to help the Private Sector create jobs – rather than spending MORE money on the fat inefficient State, which was the Brown/Ballsian ‘more of the same’ plan for 'growf' - adopted in 2012 by Hollande in France and changed quickly when unemployment went to over a 11% record, now just under that, versus our 6.8%.

www.telegraph.co.uk/finance/economics/10849333/Interest-bill-on-UKs-1.27-trillion-debt-to-hit-1bn-a-week.html this is not a recovery in any way

What has the national debt got to do with the recovery, if there is a plan for Private Sector growth and run an annual budget surplus, to start paying it off - are you saying there will be no recovery until our grandchildren's children pay it off?

Think how bad it would have been under Labour, when they didn't want spending cuts, wanted a lot more taxes and thought the decimated private Sector would come back by itself, even though the likes of manufacturing halved under Labour.

After the early 1990's western recession the Conservatives had budgeted for a surplus 1997, Brown adopted their spending to ease City fears, the people found so boring so gave Blair a 140ish seat majority - but was achieved around 2000 before Brown went on his spending spree and left a £157 bil deficit, mostly due to an economy relying on speculation and debt for tax receipts.

Apparently Labour's State Controls that will kill investment stone dead in the 2015 way to pay that national debt off.

Noddyholder …. Re listening to old City folk ‘scribblers’ now retired, they have never seen markets adapt to a Base Rate at an all time low, where the BoE had their own balance sheet (Quantitative Easing), where after a major recession interest start rising s-l-o-w-l-y from such lows (rather than highs designed to squeeze out inflation), where the population hadn’t grown so fast since 1066 and such low home starts/completions, probably the lowest averages for decades.

Where I do agree is the Base Rate should start going up sooner than later to change the home price sentiment a bit; I’d do it in November on that Quarterly Report, as February would be too close to the General Election, and globally central bankers don’t like to be seen influencing general elections.

The homes market has what most strategists look for before deciding if the trend is sustainable; depth (with solid demand from top to bottom of the market with many buyers waiting for a correction) and breadth (activity and price rises across all regions)..

And keep worrying about London and the price rises trickling out is sustainable based on borrowing is a waste of time, back in the 2000’s half of all homes bought over £1 mil in London was with foreign money NOT NEEDING financing/mortgages, so read the more up to-date stats here and tell me why the global money coming into London (paying 7% Stamp Duty) will dry up and/or these investors will sell.

www.theguardian.com/business/2014/feb/01/rich-overseas-investors-uk-eu-housing-market

"The report, called Finding Shelter, cites statistics showing that 85% of prime London property purchases in 2012 were made with overseas money. Estate agent Savills found that last year £7bn of international money was spent on "high-end" London homes, with just 20% of that spent by UK citizens. Two-thirds of homes bought by people from overseas were not purchased for owner-occupation but as investments."

“Civitas says the problem is not confined to the top end of the market and that overseas buyers are also acquiring less expensive newbuild homes. It says that over the past two years only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia.”

"The UK property market is being used as an investment vehicle by the global super-rich – and increasingly the simply well-to-do," the report says. "The inflationary impact of this extra cash is good news for property owners – until they want to trade up the housing ladder."

Do you think they give a care about bank lending mortgage salary multiples?

You have a view and misreading a lot of data, so Persil is just fine, no shorts going to be eaten here.

Of course the national debt has something to do with it! I do not believe this govt have got a handle on the economy at all. They shaft the poor and feather their own nests Their taxation is all over the place they know where they should tax but let big corps get away with it and are borrowing like mad! You obviously are supportive of their austerity measures whereas I am not. I think they have made a cock up of the housing market fuelled another boom which will subsequently bust. Interest rates have been silly low and thousands have been lulled into a false sense of security paying so little. I think we have not seen the end of the recession just a band aid to try and get them in in 2015.

You are extremely patronising and tbh have a set view which I don't subscribe to.

noddyholder ….. further to your last two posts, second one first; you predict a 10% fall in home prices and cited a few factors to back up your view, whereas I disagree for the reasons I have given and qualified facts that appear to contradict your negative factors – which I’d call taking the time for a debate with, not being “patronising”.

If you make investments buying and selling homes on a regular basis, you should be thankful, not anal about my input, as no charge.

Regarding the Budget Deficit and National Debt, you do realise that the Coalition inherited the annual £157 bill deficit (overspend) and a National Debt around £1 trillion – and that while there is a deficit, that annual figure ACCUMULATES?

I ask this as on the one hand you appear annoyed that there is an annual deficit, and on the other, you seem annoyed that cutting it is austere, despite the Coalition offering more £££ helping the pensioners and lower paid, whereas Labour screwed all pensioners over 13-years, took away the 10p tax rate and added 2.5 million new candidates to the jobs markets.

If you think we’ve had ‘austerity’, check out what several European’ countries had to put up with in reduced public spending as conditions for getting IMF help, and all of them had a SMALLER annual budget deficit than the one Labour left.

If you want to look into ‘nest feathering’, ask yourself why under Labour the rich generally paid less tax and why Brown also put down the Capital Gains Tax to a 10% tapered low. And why twice as many NON EU citizens, that had to be ALLOWED in (who unlike the EU citizens, the NON’s can vote in a General Election) when we were open to potentially large numbers of EU economic immigration here – all totally around three times the new homes we were building.

If Labour didn’t screw ‘the people’ for votes, YOU tell me why we needed twice as many NON EU citizens coming in as EU citizens – and if you can’t, maybe you should direct your anger to where due, like I do.

So I reiterate, quite why you think those actions (in times of ££££plenty when Brown had tens of £££billion to spend on fat inefficient government) is the Coalitions ‘housing market’ fault with a £157 billion annual deficit, beats the shit out of me.

In conclusion; how can the Coalition cock up a housing market by just unblocking the transaction logjam (when banks could/would not lend, when the last f*wits (a current political term) had their own immigration agenda, but with ££billions to spend, STILL made the wrong choices e.g. built an average of 115,000 homes a year when we had somewhere around 280,000 to 300,000 new citizens arriving a year?

Further to views earlier on, the prospects of higher interest rates and the new rules and regs on lending seems to be slowing down Mortgage Approvals and taking some of the heat out of price rises.

Regarding the governments Help to Buy Scheme that overall have now helped purchase 27,681 homes to mainly help first time buyers, helped chains of buys and sells complete and encouraged builders to build, the following statistics recently came out.

• The numbers of homes bought with the government guarantee 2nd phase over the past 6-months was 7,313, which was just 1,3% of all loans completed.

• First time buyers accounted for 80% of those loans, only 5% of the total were granted in London, with the North West and Scotland accounting for 27% between them.

• Half of the mortgages granted were for under £125,000, with an average mortgage offer of £151, 597.

www.bloomberg.com/news/2014-05-29/cameron-defends-home-plan-as-data-show-limited-boom-role.html

Regarding the BoE Governor Carney ‘heads up’ we could see a Base rate rise earlier than expected, IMO a rise is likely to come straight after one of their Quarterly Inflation Reports in Feb/May/Aug/Nov, but when?.

Central Banks tend to not raise interest rates at election times, so as not to influence those elections, so logically – when taking into account the broadening strength in our economy, the need to cool home price rises, the (deflationary) strength of Sterling to the US$ still feeding through to lower commodity prices, and also signal the markets that the BoE has credible anti inflationary credentials under Carney so not to prematurely push government bond yield too high – so if I was going to bet the ranch, barring any external commodity/economic shocks, November this year has to be favourite. IMO.

This is because August this year would be too soon, and post election May or August 2015, too late – but by this November, the BoE Policy Committee will have enough economic data to CONFIRM the recovery is widening, the trend of new business investment/jobs continuing, and UK salaries finally rising in ‘real’ terms over inflation will be sustainable.

Bearing in mind the that for decades the UK seems to have higher inflation than other countries (and that a Base Rate rise (or fall) can take over 18 months to fully feed through the economy), a too hesitant BoE pulling the interest rate trigger by year end, could have all of us paying a lot more a few years down the line, if increased confidence raises inflation, and it becomes ingrained, as salaries and prices for finished goods and services, rise further than expected within their economic policy models.

The Government used to set interest rates but that was made to be independent I think under a Tory Government to stop political interference although Lord Lawson on R4 this week said even in his day before the change on the whole they decided rates on longer term not political factors.

Isitme the budget deficit in Greece and Italy was largely debt on public spending. The UK debt is not, it's mostly bank bailouts. Gordon Brown intended QE to be a one off. The coalition just kept it going, bailing out and bailing out.

And as far as helping the poor, the coalition have effectively subsidised low wage payers, Tesco and the like, not earners. Topping up bad rates of pay didn't help the poor at all, money in people's pockets was less as prices went up.

And some wealthy pensioners did need restrictions, and the retirement age needed to be raised. Those moves were fair.

I see you know a lot about economics but your position comes across as partisan and is therefore not as helpful as you might think.

But back to the OP. I love that they seem to have employed someone who has a great idea, has seen it happen and is just getting on with it. All these years of mad boom and bust have been unnecessary and incredibly damaging to our industry, earning power, infrastructure. Our country has been sold off to the highest bidder. Carney is a breath of fresh air as he has the balls to admit that unfettered capitalism doesn't work and is actually doing something about it.

Eventually we will wend our way back to a German type model of stable SMEs and industries, sensible social and housing policy and the last 40 years will be looked back on as a period of economic dysfunction, which it has been.

I don't know much about all this, but my joe-public view is that we had ten years or so of the good times, yet the current UK population is going to be paying the price for the rest of their lives. A debt that size isn't going to be paid off in a few years.

JaneParker ….. I am aware the BoE is independent, as arguably that was the only useful bit of legislation by Labour over 13 - years, but the point I am trying to make is that Carney, a Canadian, that worked in Wall Street for many years and saw how the equally (independent) Federal Reserve tried went out of it’s way to be non political, will be mindful (politically) of a say, February rise in the Base Rate – especially when looking at other factors signalling the need to start raising rates, now.

As to UK governments in the past being ‘non political’ when setting interest rate policy/moves, call me a cynic, but I’d love to look back to when politicians set rates and saw how many interest rate HIKES there were months before an election, versus interest rate FALLS.lol

Unrealhousewife …..re your view “I see you know a lot about economics but your position comes across as partisan and is therefore not as helpful as you might think.”

As someone who spend decades following global interest rates (and the economics that drive them) my “position” is to try and help clarify ‘stuff’ where I can e.g. predicting and qualifying the first rate rise, and if I become “partisan”, unknown of on this board, it tends to be if other posters are either ignorant of the facts and/or become “partisan” themselves.

Which brings me nicely onto the frankly laughable statement of yours that all (or most) of the UK debt Brown handed over to the Coalition, was the nationalisation of UK banks (other countries didn’t have to do, why?) and the bank bailout in general – rather than the budget deficit overspending Brown ran from 2002, as he multiplied Public Sector Spending on some ministries, even though he had record tax receipts coming in as the proceeds of unsustainable City, bank lending and consumer speculation and debt.

When (as the recession took hold) the UK tax receipts dried up, the Public Sector spending carried on, and due to the falling of private Sector tax receipts and rising unemployment benefits etc, ta dah = a £157 billion a year budget deficit handed over in 2010. Don’t take my word for it, see the fair (too fair IMO) link below.
www.economicshelp.org/blog/5509/economics/government-spending-under-labour/

FYI the QE of £375 billion under Labour (to add cash into the economy) is on the Bank of England’s ‘balance sheet’, not included in national debt, which is a first for most countries, as central banks do not have the government’s capacity to have a balance sheet, as it has to tax/revenue raising facilities to pay it off – so has to SELL the £375 bil of bonds (or whatever total is still there after short dated government bonds on its books matures) back in to the market to get the proceeds back.

Quite why, in your non partisan way, you are blaming the Coalition adding to it, when if anything, the sum is smaller, only you can answer, as I suggest you have got very mixed up somewhere in your defence. Not that defence for still running Quantitative Easing is necessary, as it is still necessary, and while in the U.S. they are just winding down the size of their huge MONTHLY government bond buying operation (QE-ish), in Europe the European Central Bank is probably just about to START it, if the German’s let them.

QE is a blunt instrument to add liquidity into the economy, but interesting that you chose to look as big business Tesco (and maybe the FTSE 100) as ‘capitalists’ that with 2.5 million of new migrant labour helped push down pay rates for the poor lucky to have a job under Labour, benefit from QE - rather than the tens of thousands of small to medium sized businesses e.g. local shops (closing on a high street near you), that form the back bone of our economy - as gaining some help from more money in circulation, which WAS THE POINT OF QE.

In conclusion, I still believe our first rate rise will be in November this year, as per the reason in my earlier post – and that if either of us get all “partisan”, we should at least get out facts right, especially if accusing others of such a dastardly act.

What. I said or at least meant was that Browns deficit was money well spent.n Funding our services, the NHS, Buildings, infrastructure, yes some of it excessive and wasted but not nearly as wasteful as losing trillions to fund the banks utterly unaccountable bad debts.

Perhaps the books look different now, perhaps you can tell us how much we spent on the public and how much we have spent on bank bailouts?

Immigrants weren't the cause of low wages, high living costs meant that only people who could put up with substandard accommodation and didn't have a family in this country to look after with a fallback elsewhere could survive on those low wages. Tax credits for low earners kept wages low at a huge cost to the taxpayer. Far better would have been for businesses to pay higher wages and invest in workers properly. This could have saved a lot of money which could have been used to support SMEs to expand and invest.

unrealhousewife ….. Part 1 … in answer to your last post, I could take a lot MORE time than I have informing you of the truth, but my experience on this board, is that people DON’T WANT to know the truth, as not convenient when blaming the Coalition (and banks) for everything. So what I’ll do is to make some points, often qualified with links, which I suggest you take the time to read.

Firstly that the hundreds of ££££billions increases in our budget over 13-years, where Public Sector employment rose by around 1 million and the likes of the NHS and Education saw a 2 to 3 times increase from 1997, was well spent.

In “funding our services”, you will find that far too little of that money got to the ‘front line’, and that much of the money to fund the building of hospitals and schools, was not paid for out of (then) current budgets, but shed loads of DEBT,that will come out of out national budgets for decades to come (see links further on)..

The NHS costs went up enormously on salaries, not the likes of nurses, or those that could eradicate years of hospital superbugs, but a new army of hospital administrators running the Trusts and the suited Consultants, a new £18 bil supercomputer not fit for purpose, - and our GP’s with new contracts that paid more for a 5-day week, needing weekend cover from GP’s being shipped in to the country at great expense from all points east – yet NHS Dentists on the high street, due to their new terms, became as rare as rocking horse … teeth.

Below shows conclusively that the building of hospitals etc, far from coming out of that 2001 to 2008 massive increase in government expenditure, they were built by businesses via the Private Finance Initiative (PFI) and the UK government will annually pay through the nose, for decades to come, via annual NHS etc budgets.

www.telegraph.co.uk/health/healthnews/8779598/Private-Finance-Initiative-where-did-all-go-wrong.html

www.telegraph.co.uk/health/healthnews/9356942/Blair-defends-PFI-as-NHS-trusts-face-bankruptcy.html

www.dailymail.co.uk/news/article-2363808/Labours-NHS-denial-machine-Experts-verdict-ministers-covered-problems-failing-hospitals-thousands-died.html

In education, as buildings were again financed by the PFI (to come out of future education budgets annually), the doubling plus of our budget produced these results after 13-years, which I’m sure you will think it is still “well spent”, but for social/job preparation reasons, I’d generally disagree.
www.mumsnet.com/Talk/politics/1990838-UK-education-what-is-the-REAL-problem

In other important infrastructure, like nuclear power stations, we sold our own expertise (Westinghouse) to Toshiba of Japan, tried I believe to get EDF to build them on a kind of PFI plan, but failed, never broke ground, the country went near bust –and now need Chinese and other financing, hopefully being completed before the lights go out.
www.mumsnet.com/Talk/politics/1983467-UK-Energy-Policy-Price-scandal-outages-due

Or alternatively on defence IT MAKES YOU WONDER WHERE THE MONEY WENT, when under Labour we on a permanent war footing, but did not revise the Defence budget up in over a decade, sent troops into the likes of Afghanistan without enough helicopter, bomb proof troop carriers and bullet proof vests - yet decided to build Aircraft Carriers we couldn’t afford to put planes on in a constituency near Mr Brown – and passed the Coalition a £38 billion budget black hole.
www.taxpayersalliance.com/economics/2009/09/new-book-reveals-the-total-cost-of-gordon-browns-mishandling-of-the-economy-as-3-trillion-or-3000000.html

Unrealhousewife ….. Part 2

Regarding the banking crisis (another Labour deflection), first understand that in late 2007/8 their were not ‘bad’ loans, there were excessive loans (especially in the UK), but due to the closing of the huge interbank market on mainly U.S. bank fears, there was a banking LIQUIDITY crisis driving banks to the wall e.g. Northern Rock – and a financial recession then morphed into a huge economic recession, that also caused asset prices to fall, RESULTING in those bad loans and bad debt, as in any recession.

The fact you are asking ME how much has been SPENT on the banking crisis, I assume you cannot find it, and there is a reason for that; it may not COST anything, we could make a profit, the COST has been the resulting Great Recession via their problems to our governments finances, the Private Sectors finances and our finances - similar any recession, but instead of seeing high interest rates coming out of the recession, we have an approx 300-year low Base Rate, twist to it.

Banks like RBS and Lloyds, unlike banks anywhere else in the world at that time, were part nationalised by our Labour government, and that approx 81% of RBS and 40 odd% of Lloyds, cost either £60 odd or £80 odd billion, I forget now but arguably it is immaterial, as don’t forget IN THEORY we get our money back when the shares are sold back into the market.

FYI as our banks became a political football kicked around by all political party’s (especially RBS on bonuses etc that saw their best revenue earners leave), our banks equity prices are still below our 2008 purchase price, whereas banks that were NOT nationalised e.g. in America (where they handle the problem differently), not only have they seen their bank equity prices double or treble from the 2008/9 lows, they have PAID BACK EVERY CENT to their government a few years ago, including interest costs etc.

UK banks collectively, were handed many £££billions of LIQUIDITY by the BoE to stop their loan book and economy crashing via the likes of the Emergency Liquidity Assistants (ELA) plan, but FYI they were COLLATERALISED loans and I’m sure the BoE made a profit on these transaction and paid the profit back to the Exchequer. Basically, this meant a bank could get £10 billion in liquid assets like Government Bills from the BoE, by offering/lodging with them, £13 billion of (illiquid) assets, like UK mortgages, so the loan was secured by assets of more value, than the money they receivred.

And as I’ve already mentioned, the £375 billion of Quantitative Easing (QE) where the Bank of England was allowed it’s own balance sheet to go into the markets and buy that amount of previously issued UK government bonds etc (and in turn £375 billion of cash/liquidity was both ‘printed’ and pumped into the economy) has not cost us a penny to date. In fact, as our bond yields/interest rates were much higher in 2009/10 and they fell substantially on Osborne’s debt management plan (and as bond yields fall, the price rises), we are likely to CURRENTLY have a decent profit on the operation.

But like the RBS/Lloyds equity sale, until the BoE sells all the (QE) UK government bonds they hold back into the market, we don’t know if they’ll be a profit or loss – although having paid an Investment Bank price premium for RBS, but are (erroneously IMO) slowly turning it into a mainly (just) high street bank, they are destroying equity value for the shareholders (us), so we’ll be lucky to make a profit on that all party ear of pig.

Regarding your view that 2.5 million new UK citizens who apparently found jobs and homes HERE had no downward pressure/effect on UK salaries, or our unemployment rate, and those indigenous multi cultural unemployed LIVING HERE, had higher costs that those new citizens now LIVING HERE, I can’t be ‘assked’ to bother answering that.

But re profligate governments expecting the Private Sector to pay up, rather than governments spend responsibly and keep taxes low rather than put them up e.g. Brown’s taking away the 10p income tax rate, I covered many of those points below, especially re timing e.g. in the middle of a huge recession, when companies were going bust.
www.mumsnet.com/Talk/politics/2084783-Labour-s-Minimum-Wage-Link-will-affect-the-UK-recovery-jobs

BTW are you now finished trying to defend the13-year (Labour) record and blaming the banks for our national debt, as if so, may we please get back to Interest Rates and things home related?

Isitme, thank you for that detailed report!

Ploughing through each point from a political perspective

PFI was designed by John Major. It wasn't thought through at all, contracts are dodgy and often little more than extortion. Its cost is 270 billion which is huge. I don't understand enough about the contract details to see how this will pan out in the future. But it was a Tory invention.

Strike Carrier programme was perfectly feasible until the Tory govt came in and changed the type of craft used. That's what cost the taxpayer millions, the cost to correct that mistake.

So far if we're scoring points that's 2/0 to the Tories for big blunders. Although I do remember wondering why when labour came in PFI continued, as usual I trusted the professionals to know what they're doing. Failure by successive governments to understand the previous govs policy effectively is a common theme.

On Westinghouse I think Blair saw that nuclear was a liability and with green energy developments offering alternatives he would have bigged up nuclear in order to get the best price. He's a good salesman and tactical thinker. It has since been shown that nuclear is not what is cracked up to be and we are well rid. Even better if the French foot the bill and build it on their soil.

The jitters about energy failures to come can be quickly met with green measures and more wind farms, plus a bit of fracking to tide us over.

And it's probably just as well Westinghouse were Japanese when Fukushima went down.

Next point, minimum wage. The government will save 2.2 billion a year in saved tax credits and tax receipts if the min wage is increased to the living wage.

Employers will hopefully tackle this by employing the best worker instead of simply the cheapest, Workers who won't leave or move on and can be seen as an investment. SMEs will lose out but there are many other things that can and should be done to support them.

I'm still wading through your version of the banking crisis but your fourth paragraph stands out. If the USA banks have paid off their debts including interest surely our decision to nationalise them or fund them was wrong? I will come back to it though.

unrealhousewife ……. May I suggest that you at least SCAN the links I provided, as your ‘quick draw’ replies show that you haven’t.

The Private Finance Initiative contracts, where the private sector pays for a project, often manages it e.g. £100 to change a lightbulb, and then the government LEASES it (hence the fixed annual departmental budget cost) WAS a Conservative initiative way back when – but are you SERIOUSLY blaming the Tories for Labour’s misuse of PFIs – when ALL Labour politicians do is whine about (and accuse) the Conservatives for privatisation plans??????????? It is like blaming Samuel Colt for every hand gun crime in America to-date.

In Defence, no comment on the lack of an annual budget, sending troops into war without the right equipment, or the £38 bil financial black hole the Coalition was left to equip the delayed finished aircraft carriers being built in Mr Brown’s back yard - contracted in 2008 @ 3.8 bil and the latest cost £6.2 bil – once again, it is the Coalitions fault that having found cancelling one was not a viable financial option, they were trying to equip it with planes on the cheap? P-lease.

On Nuclear Power Stations, now you are just making it up, as reading the OP of my link, Mr Blair around 2004 said ‘we were going for nuclear’, making selling Westinghouse a mockery of any ability of Labour in business planning - and as they take around 10-years to build (and as “tactically thinking” Labour didn’t build any) - it will explain why the UK could have power outages as early as THIS winter.

Nuclear power reduction is an option for those (like France) that have shed loads of it and ‘export’ power to our grid, not for the UK without any government money left, and the lights can go out from here on. FYI due to their capacity and our reliance on importing insecure oil and gas supplies from abroad, the power stations are being built HERE to replace our current aging reactors, already on extend life. As to EDF (owned by the French government) ‘footing the bill’, think again, it was to be paid for via our bills, which AGAIN makes a business mockery of Labour/Miliband, threatening their (EDF’s) investment by freezing prices in volatile energy markets.

On the Minimum Wage, that not just affects the 250 largest companies, but also the many thousands of small to medium sized businesses that make up the economic and employment backbone of this country, your solutions, including passing on government tax credit costs to the private sector, are simplistic at best. May I suggest that you put it to the next high street shop closure owner, and come back with the response?

While Osborne has reduced Labour’s costs of businesses doing business annually from 2010 (and taken nearly 1 million of the poor out of income tax altogether), most companies are still too fragile to take higher wage costs, hence the recent M.Wage set by the Independent Commission, the first ‘real’ increase for several years.

On our Bank Nationalisation, you are correct, as the main problem was INTERBANK LIQUIDITY until the U.S. investment bank Lehman failure around September 2008, once Northern Rock was allowed to go bust (unfortunately before the Bank of England decided to pump in as much liquidity as banks needed), the spotlight was on UK banks by markets e.g. Hedge Funds.

And the equity prices of RBS etc were attacked, and stock prices fell below bank asset book value, and for SOME REASON we left it to ‘the day before the cash machines ran dry’ to step in. So an even clearer signal that having the government buy ours bank's stocks (on behalf of the taxpayer) at such a cheap level, they have mishandled the banks since, if we cannot get our money back yet. In the U.S. for example, banks and AIG the insurance giant and largest default, put their bad assets in a government managed 'pot', were free to run the 'good' bank, and since paid it all back, and stock prices multiplied.

The UK needed to rescue our banking system and restore confidence, but this was Labour ‘s fault/solution initially for privatising them, the Coalition since for not allowing the banks enough autonomy to handle their own businesses, especially RBS. I will be in a minority on my should have left RBS alone opinion here btw lol.

Isitme you're too slippery, shouty and patronising to discuss things with. Sorry. I've tried.

!!!!!!!

In other words, the facts unfortunately (for you) speak for themselves - and blaming the coalition for Labour's record, is about as useful as a chocolate tea pot.

Back to interest rates, homes and mortgages it is then.