Interest Rates?

Question

BoE has increased rates to 5% to slow down inflation? Government Inflation rate stated @ 2.4% but to most, this is too low given Elec/Gas hikes and cost of petrol/Council Tax.
Guess what? I want a big increase in wages to cover mortgage payment increases etc. This will increase inflation rate, I know, but what alternative do I and everyone else have?
My pay increases have been negligible over last few years but bills have all increased. House prices are going up but I CAN'T SPEND BRICKS.
Has anyone any comments on this?

Answer 1

Yes -- I think we're all shortly going to get caught out by continued increases in the interest rate, - borrowing has been made too easy. You can't spend bricks - but even if you could, the value is volatile- and equity is hard to release in a spiralling market if you want to keep your value. The cost of living hasn't actually increased that much - but I agree, wages haven't gone up much at all to keep pace - and I think a period of inflation is about to hit us - watch this space!

Answer 2

The inflation rate is manipulated by using the prices of goods/services which have little/no increases. This is why the inflation rate is published at 2.4% but council tax is increasing at 10% along with a lot of other things.

What you are referring to is a wage-price spiral. Unfortunately, you have little ground to negotiate a pay-rise as there are a lot of immigrants who will do the work for less. Four eastern-Europeans living in a bedsit have far less living costs than a married parent of three living in a house, and the government likes this as it keeps inflation down also.

Answer 3

No joke but when we were buying our house 2 years ago, I realised how expensive everything was - taxes, fees, water rates etc. And i said then soon we'd be paying for every time we'd flush the loo - and guess what few weeks ago on the Nick Ferrari show there was a discussion about the Water companies asking people to 'share a shower', and not flush the loo if all they did was a tinkle/number 1!

The Government are making it very difficult for people to follow the straight and narrow path. As a Mother I feel the options and provisions in our country are crap for mothers who choose to stay home and look after their kids - our income halved and expenses almost doubled.

Answer 4

It is just part of an economic cycle and it becomes a vicious circle. You get more wages, so you have more to spend, prices go up, the government fails to achieve its inflation target and interest rates go up again. In the 90's we had interest rates of 15% and although I don't see it going that high in the foreseeable future, we can expect more rises over the coming months.

Answer 5

Brilliant increase. I am a big saver..........HURRAH.

If you have a mortgage, you can make BIG money from this increase.

Let your current home, rents are going sky HIGH, as more and more want to rent.

You then rent a small place - that is no hardship.

Here is my example. Mortgage on House = £600 per month.
Currently let to a family at £1,700 per month.
I rent a small family home at £700 a month.
After paying mortgage I make a profit of £400 a month, with everything paid.
I am switching mortgages soon, to Halifax. New morthage =
£450 a month. MORE PROFIT.

GO DO IT. NO PROBLEMS.

Answer 6

Lease out your spare rooms, live in a tent in the back garden and rent out your house - whatever you do it's going to be taxed - the only thing that isn't is your home if you sell it - probably best bet if you have no alternatives is to find someone else to share your bills, or move to a cheaper area/ smaller house......sorry can't be more helpful

Answer 7

Sounds a bit like inflationary pressure, which will just lead to more increases in interest rates.

Answer 8

Live within your means. Lower your liabilities, increase your assets and DON'T count on your employer, count on YOU. Take matters into your own hands and don't work for money, but instead, let your money work for you!!!

Answer 9

It's not very interesting really...is it?