how awfully unconservative. !
it’s an interesting one - i thought they might do something. free money for homeowners which inturn goes straight to the bank is exactly the kind of this government does. it would also ‘support’ a bunch of speculators who are about to bite the dust.
if we could weather a sharp down turn, it would help cull the greedy.
If they started offering help it would undermine the BoE’s strategy and likely open up a can of worms. I say this as someone having bought a property in 2021 and remortgaging this year.
The BoE have one lever they can pull and it’s labelled “interest rates go up”.
Edit: tbh, I’m more concerned with the housing market crashing due to the high interest rates making ownership at the current prices unaffordable. I suspect when we remortgage again we’ll be paying the same amount of interest or higher due to being moved an LTV banding, which will be depressing.
Inflation is helping house prices a lot at the moment. I think we will see a modest drop in prices around 10% in total but which will amount to 25-30% in real terms due to inflation. Hard to see drops much greater than that happening due to the supply constraints making rental costs also very high.
Inflating away the high house prices seems to be the least painful way for housing to become more affordable. People who’ve had to buy in at high prices don’t get completely shafted, while housing can potentially become easier to obtain.
There’s been a thousand predictions of house prices falling over the past decade for a hundred reasons, and every single one falls over the fact we have a drastic shortage of housing and no credible plan to increase the speed we build them.
25-30% in real terms is pure fantasy pulled from your arse and it’ll never happen, not even close. Does Lemmy have a remindme bot so I can come back in 6/12 months and point this out?
They are already down 13% in real terms since March 2022.
I didn’t pick this number from nowhere in this opinion piece you have a couple of expert predictions in the 20-35% range.
Help for mortgages would defeat a large part of the mechanism being used to deal with inflation. If the market expected there to be a realistic chance of this happening then interest rate expectations would go up even more and mortgage costs go up even more. Gove was an idiot to suggest they were looking at it. Or he didn’t particularly care beyond his own interests and popularity.
Except the mechanism for controlling current inflation is badly placed. The reason we have inflation so high in the UK is down to supply issues and energy bills. Economists have been shouting this for over a year now. Increasing interest rates is not going to solve that. The government knows this. They are doing nothing to alleviate the issue. Energy firms are still evading any windfall levies, and our port are about to becomes more constricted when they introduce actual border checks at the end of Q3.
Not really. Energy prices are going down and are currently deflationary and supply issues are largely resolved. The UKs inflation situation is different to other countries that faced these same challenges so there is more going on that just these issues.
O aye, your bill has gone down recently? Mine went up £80 last month.
The wholesale price came down months ago. We have yet to benefit from that. Maybe when OFGEM is not controlled by a party that takes donations from energy associated companies, just maybe.
You clearly have no idea how OFGEM works. The cap has come down, but the government is subsiding it less than they were before. It will come down further in October. It’s a pretty transparent set equation on how to work out what the cap will be. OFGEM is not controlled by any party it’s an independent organisation like all of our regulators.
Anyway energy is more than just electricity and gas you might have noticed that diesel and petrol have gone down in price and the ONS has reported that energy is actually reducing overall inflation right now because of the falling prices.
You clearly are a very arrogant person. This is the ONS view on inflation.
The largest upward contributions to the inflation rate came from housing and household services (mainly electricity, gas and other fuels), as well as food and non-alcoholic beverages.
OFGEM decreased the cap to £2000 per household average, but the subsidies stopped. It is still the largest factor in the inflation figures.
“Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions to the monthly change in both the CPIH and CPI annual rates.”
“Falling prices for motor fuel led to the largest downward contribution to the monthly change in CPIH and CPI annual rates, while prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022, also leading to an easing in the annual rates.”
“Core CPI (excluding energy, food, alcohol and tobacco) rose by 7.1% in the 12 months to May 2023, up from 6.8% in April, and the highest rate since March 1992; the CPI goods annual rate eased from 10.0% to 9.7%, while the CPI services annual rate rose from 6.9% to 7.4%.”
“The slight rise in the annual CPIH inflation rate in May 2023 broadly reflected offsetting contributions across the different product groups. A large upward effect from recreation and culture was offset by a large downward contribution from food and non-alcoholic beverages. The overall effect from transport masked larger, offsetting underlying contributions from motor fuels (downward), air fares (upward) and second-hand cars (upward).“
https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/may2023
Try looking at what is actually happening in recent months rather than over the last 12 months. When deciding what factors are keeping inflation high you want to look at what is changing month by month.
Imagine calling other people arrogant while spouting conspiracy nonsense about OFGEM and conservative donors.
I quoted facts. There is no conspiracy theory unless you believe the ONS is heading a campaign.
As for control of OFGEM, do you think they set their own guidelines? They really do not. They are about as independent as our police or electoral commission. This is why they imposed such stringent policies regarding market stabilisation in 22. Or are you going to claim this was in the interests of the consumer?
You have 18 months left. The clock is ticking.
