Interest rate to rise to ‘curb inflation’ – but inflation is not driven by voluntary spending but by greedy corporations exploiting Ukraine invasion to inflate profits
The Bank of England has announced a 33% rise in interest rates – from 0.75% to 1% – supposedly to ‘curb inflation’.
But as the ‘mainstream’ media tries to defend the decision to pour yet more hardship on millions of people already struggling to feed families and heat homes let alone cope with increased mortgages or rents, it is very clear that the Establishment is yet again targeting those least able to bear the burden.
Inflation is rocketing because the government – and the so-called Labour ‘opposition’ has made it clear it would do no different – is allowing greedy corporations to exploit the supposed crisis to vastly pad their profits, with oil and energy companies reporting record profits this week and nothing but further privatisation in the pipeline whether that pipeline is badged blue or red.
Inflation is not rocketing because households have too much spare cash and need reining in by higher mortgage rates. The Bank of England, like the Tory Chancellor in his spring budget, is swinging a sledgehammer at the wrong nut.
This country is broken – but it has been broken, quite deliberately, and there is currently no political party with a chance of power that has the least interest in fixing what is really wrong with it.
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The first part of Novara’s broadcast has Grace Blakeley discussing this very issue.
https://www.youtube.com/watch?v=GO8pJrF16uo
Increasing mortgage interest rates will tip the balance for many who are already struggling to pay their mortgages.
Those who aren’t able to keep up the payments will have their homes repossessed. These will then be auctioned off by the mortgage lender. At the auction the property will not have a reserve price but will be sold to the highest bidder. If the amount raised by the auction is less than the mortgage on the property the former mortgagee will be pursued by the mortgage lender for the balance plus interest. In the meantime they will be homeless and given the shortage of public sector housing they will probably end up sleeping on someone’s sofa or if they are very lucky in a private sector bedsit . It is a nightmare situation especially if there are children involved.
As someone who has a family member who experienced mortgage debt (but who managed to hold on to their home) I would urge anybody who thinks they might end up in this situation to seek advice from a debt counselling agency right away and not wait until the red letters start to appear.
Smartboy
Interest rate rises at these levels are unlikely to increase repossessions substantially, remember back in the day Interest rates were 17% temporarily
There are a number of ways to hang onto your property and every District Judge will help you if you have taken advice and come up with a realistic plan to make your payments and reduce your arrears
If there is equity in the property then their is no threat to the mortgage holders security
Most problems are short term, so find your nearest free advice debt specialist, avoid fee chargers like the plague
I can only go by the experience of my family member Doug. It was horrendous. It happened a few years after after the financial crash and without boring you to death with the details it involved a property with negative equity, loss of employment with resultant arrears, failure to properly address the arrears situation at the early stages and unscrupulous bank employees.
I don’t think you are right about the new interest rate not increasing repossessions substantially. If people who are already struggling are hit with an increase in mortgage payments along with all the other increases they are now facing there is every chance that some of them will go under in my opinion.
I do agree with you however about avoiding charges for financial advice. There are plenty of sources of free advice and I would hope anybody experiencing difficulties would turn to them. The point I was making that they shouldn’t bury their heads in the sand and should seek advice sooner rather than later.
Smartboy
Thats the big one, early advice
Arrears can be spread over remaining period of mortgage
Well thats so typical of Banks,its like being mugged and then kicked in the teeth whilst struggling to get up.Condolences truly to anyone with big mortages or renting which will see the knock on effect.and of course the vunerable which in Britain and the US is a growing market to be exploited whilst billions of working class taxes are thrown away on stoking a world war.
You are right to criticise banks and especially the BoE. This rate rise does nothing to quell suppliers price rises which will impoverish the millions of vulnerable already suffering in the UK. Conversation in Riyadh, “Bank of England has increased rates by 0.25%! WoW! We must cut the price of crude oil immediately.” NOT.
It’s been done before. Surely you all remember the early 90s? If you were not losing your home, you knew someone who was.
This is Thatcher and Bliars legacies coming home to roost. The world is moving back to true value creation. What value creation is there here in the UK? And resources? Just how do we plan to do anything with next to nothing lying around? Debt is soon going to become very painful. Many of those who currently rob Peter to pay Paul will go under.
We’re royally shafted, and nothing is going to stop this. It took Russia 30 years to come back from their collapse. It’ll take us much, much longer.
Wonder how many fools think Keef is the solution?
The first thing must be peace. Then accept the fact that the world has changed and there are powerful blocks. One problem though and it’s an awful one. The neocons/demons have only one gear, it’s what they’ve always wanted. War with Russia. I happened upon an American news show. The interviewers make ours seem like Putin and the guests are even madder. The chances of peace breaking out are fading away. Peace all.
The BoE admits that the riksk of recession increases with today’s interest rate increase. Businesses, workers and consumers will pay dearly.
Our economic system desperately needs inflation and is manipulating itself and its synchronised forces in global capitalism and Government to achieve it.
Foodbanks in Bradford, 31 at the last count, and still unable to meet the demand. 30% of children in UK are being raised in poverty. It will be a higher ratio by next week, next month, next year.
We are wiilingly entering an economic vicious cycle where no one benefits except the powerful elite.
Land of the lotus eaters
Keef trilateral commission will do nothimg to help.
(credit MS
“Calling the Tories “out of touch and out of ideas,” shadow chancellor Rachel Reeves said that voting for Labour today would send a clear message to the government that “Britain deserves better.”
She said: “The response by the Conservatives to the cost-of-living crisis has been nothing short of insulting.
“People are worried about paying their bills and ministers are seriously suggesting the answer is dodgy loans and Tesco value.
“The Conservatives are living on another planet.”
And the Starmer-Reeves Labour Party is one of its moons.
Please, DON’T vote Labour Today….
And has the pound plunges on the world markets with the plans by the bank of England to try to stop hyper inflation and collapsing economy by raising interest rates the first of many the alleged government makes a military pact with the old imperialist power Japan.
Johnsons thoughts are in the Pacific ocean and S.east Asia when he should be looking to cut military spending and raise taxes from the oil and big pharma carpetbaggers instead of pouring money down the drain on war war and weapons.Only the Yanks make money on war and Britain can’t play with the big boys anymore and neither can we fund it.or wish to fund the road to oblivion..!
Yes, the rise, though 33%, amounts to a still historically low interest rate and though in isolation is not cataclysmic, this crisis is, energy bills aside, a cumulative thing, as every aspect dependent on fuel (from extraction, to manufacture to distribution before one even considers the domestic costs of travel and heating) ratchets up everything 5, 10, 15% to cover increased costs. When the supply shortages occasioned by the Ukraine conflict are added in, plus the major disruption in Shanghai, the world’s biggest container port, and the ongoing shitshow that is Brexit, well, that’s enough to be getting on with before the government exacerbates the problem with NI increases, a move to bring right-to-buy into the housing associations and countless other diversionary policies that all but those on the money of the political class and upwards can weather. The argument put forward as to why a windfall tax on energy firms is not the right policy revolves around denying them the funds to invest in pivoting our energy supply away from the dependencies that have aggravated the high cost. Where this falls apart is that there is no mechanism to compel the companies to undertake this reinvestment so it would seem better that a windfall tax be levied to provide these funds (and perhaps, depending on political priorities to have the option to spend some or all of this on alleviating fuel poverty now rather than investing in controlling it at a later point).
I am not too confident we have the political brains to be able to thread a humane and sustainable path through this – throwing money at the North Sea and fracking is long-term, doesn’t create an overt downward pressure on fuel prices and urinates over any ecological agenda; nuclear, aside from the obvious risks, has the further risk of extracting us from one set of undesirable bedfellows only to shack up with an equally dubious clutch of alternatives. Renewables, at scale (size and quantity), look tempting but mean considerable investment and adapting to or innovating around the variability of supply. Ironically, COVID showed us that the world might continue with diminished use of fossil fuels and might have provided the impetus to double-down on ways of maintaining increased air-quality and now the energy crisis seems to be opening the door to a future of energy security but, be it the vested interests or timidity, these opportunities seem to be passing us by.
Thanks for the link qwertboi. Fuel Poverty Action’s spokesperson referenced in the piece talks a lot of sense, notably the idea that there is a fuel allowance – an initial sum of money that is sufficient for heating and cooking, beyond which costs per therm (or is it kw/h?) rise progressively – no-one wants to be in the business of telling people they can’t power this extravagence or the other but if you use more you will inevitably have to pay a lot more and, irrespective of income levels, a policy that punishes the profligate is to be preferred to one that kills the impoverished.