Truss surges ahead, wins key backers in U.K. leadership race for prime minister

[Bluespunk]

2 minutes ago, transam said:

Ah, the irony..................????

And the irony is?

 

Be careful here and look up irony before replying…

Edited August 6, 2022 by Bluespunk

[Kwasaki]

59 minutes ago, Excel said:

Irrespective of the outcome I hope neither of them choose to keep the current chancellor in his post because just  like the PM they are MIA with no comments from either following the BOE shocking announcement and forecasts that has seen confidence in the UK taking a dive if the exchange rate currently is an indicator.

Not the best indicator baht nearly got to 45 to £ but my pension is due so it's now 43 ???? not the end the world I do my budgeting on 40 and forget about it. 

[Mac Mickmanus]

3 minutes ago, Kwasaki said:

Not the best indicator baht nearly got to 45 to £ but my pension is due so it's now 43 ???? not the end the world I do my budgeting on 40 and forget about it. 

The U.K will be on a downward spiral for the next year/18 months , could be catastrophic with inflation in double figure, interest rates will rise and due to recent long term  low interest rate , many people wont be able to pay back their mortgage .

   The Covid cost will need to be paid for through tax adjustments .

The U.K is in for a difficult time and the Pound could plummet , The Pound had a significant drop when interest rates rose by .5 % and they are expected to rise by a further 1 % next year .

[RayC]

31 minutes ago, Mac Mickmanus said:

The U.K will be on a downward spiral for the next year/18 months , could be catastrophic with inflation in double figure, interest rates will rise and due to recent long term  low interest rate , many people wont be able to pay back their mortgage .

   The Covid cost will need to be paid for through tax adjustments .

The U.K is in for a difficult time and the Pound could plummet , The Pound had a significant drop when interest rates rose by .5 % and they are expected to rise by a further 1 % next year .

I agree with much of what you say and whoever takes over as PM will certainly have their hands full (largely due to circumstances beyond their control).

 

However, I am curious about your second paragraph: "The Covid cost will need to be paid for through tax adjustments." What do you mean by this? That there should be an increase in taxes?

[Chomper Higgot]

45 minutes ago, Mac Mickmanus said:

The U.K will be on a downward spiral for the next year/18 months , could be catastrophic with inflation in double figure, interest rates will rise and due to recent long term  low interest rate , many people wont be able to pay back their mortgage .

   The Covid cost will need to be paid for through tax adjustments .

The U.K is in for a difficult time and the Pound could plummet , The Pound had a significant drop when interest rates rose by .5 % and they are expected to rise by a further 1 % next year .

All those bills to pay, and Truss promising tax cuts.

 

Fairytale economics.

[transam]

1 minute ago, Chomper Higgot said:

All those bills to pay, and Truss promising tax cuts.

 

Fairytale economics.

You're an expert on long term government economics, or just talking out loud.. ....?  ????

[Mac Mickmanus]

14 minutes ago, RayC said:

 

However, I am curious about your second paragraph: "The Covid cost will need to be paid for through tax adjustments." What do you mean by this? That there should be an increase in taxes?

400 Billion needs to be repaid , I suppose they will either have cut backs , tax increases or tax deductions hoping to spur the  economy , whatever way they choose will be a pain 

[RayC]

3 minutes ago, transam said:

You're an expert on long term government economics, or just talking out loud.. ....?  ????

You've marked my last post - a reply + question addressed to Mac - with a 'Confused' icon. Apologies if my post is unclear. If you clarify what exactly you are confused about, I'll try to explain things more clearly.

[Kwasaki]

5 minutes ago, Mac Mickmanus said:

400 Billion needs to be repaid , I suppose they will either have cut backs , tax increases or tax deductions hoping to spur the  economy , whatever way they choose will be a pain 

Borrow another 400 billion from the Musk Tesla guy.  ????

 

Edited August 6, 2022 by Kwasaki

[Mac Mickmanus]

13 minutes ago, Chomper Higgot said:

All those bills to pay, and Truss promising tax cuts.

 

Fairytale economics.

The idea is to give working people tax cuts and to stop handing out money to people on benefits , get people to work and pay tax, rather than increasing tax and giving the money to non workers .

[transam]

1 minute ago, RayC said:

You've marked my last post - a reply + question addressed to Mac - with a 'Confused' icon. Apologies if my post is unclear. If you clarify what exactly you are confused about, I'll try to explain things more clearly.

No problem, you crack on..........????

[RayC]

5 minutes ago, Mac Mickmanus said:

400 Billion needs to be repaid , I suppose they will either have cut backs , tax increases or tax deductions hoping to spur the  economy , whatever way they choose will be a pain 

Fortunately, the UK government does not need to repay the public sector debt (+/-£2,500bn) - of which Covid costs are part - it needs to finance the deficit (currently +/-£25bn), and ideally pay the debt back over a (prolonged) period of time.

 

I can't find much detail about Trusses' proposed tax cuts. However, the idea that tax cuts will stimulate consumer demand in the current economic circumstances i.e. growing household debt, rising interest rates to the extent that the government's tax revenue is maintained/ increased is an unproven gamble.

 

If this gamble fails, in order to finance the loss of government revenue, Truss will either have to 'print' money - difficult, expensive and likely to be poorly received by the financial markets - and/or cut public expenditure on services, which will hit those who can least afford it the hardest.

[placeholder]

3 hours ago, Mac Mickmanus said:

What does that have to do with the topic subject ?

A lot actually. A certain amount of inflation and economic damage will be down to Brexit. So that's outside of her control. What she has promised to do will be damaging enough. Unless she does a U-turn. As she has repeatedly demonstrated, she is adept at that maneuver. 

[Chomper Higgot]

29 minutes ago, Mac Mickmanus said:

The idea is to give working people tax cuts and to stop handing out money to people on benefits , get people to work and pay tax, rather than increasing tax and giving the money to non workers .

It’s never worked before, so let’s try it again.

 

 

[Mac Mickmanus]

6 minutes ago, RayC said:

Fortunately, the UK government does not need to repay the public sector debt (+/-£2,500bn) - of which Covid costs are part - it needs to finance the deficit (currently +/-£25bn), and ideally pay the debt back over a (prolonged) period of time.

 

 

The debt does need to be paid back , Each household in the U.K currently pays about 2000 GBP per year in taxes just in interest rates on the money the U.K Gov has borrowed , the more money the UK burrows and owes, the more taxes will have to rise .

[placeholder]

3 hours ago, Mac Mickmanus said:

Yes , can you remember what I said when the last you mentioned that ?

Something about the U.K having similar inflation rates to E.U Countries ?

Higher than the EU average. And the UK is blessed with being able to treat its workers like sh*te compared to EU nations with advanced economies.

[Mac Mickmanus]

4 minutes ago, Chomper Higgot said:

It’s never worked before, so let’s try it again.

 

 

Lady Thatcher cut the taxes in the 1980's and got the economy booming , that was just after Labours tax and spend policies that bought the U.K to a standstill , strikes, high inflation , Unions running the show .

   It worked last time ,  

[Chomper Higgot]

Just now, Mac Mickmanus said:

Lady Thatcher cut the taxes in the 1980's and got the economy booming , that was just after Labours tax and spend policies that bought the U.K to a standstill , strikes, high inflation , Unions running the show .

   It worked last time ,  

She also sold off state owned assets and jacked up the economy with the proceeds while deregulating banks and the financial sector, destroyed British manufacturing engineering and sowed the seeds  for the banks gambling with debts underwritten by tax payers money.

[placeholder]

39 minutes ago, Mac Mickmanus said:

The idea is to give working people tax cuts and to stop handing out money to people on benefits , get people to work and pay tax, rather than increasing tax and giving the money to non workers .

The problem with this is that it makes no distinction 

 

1 hour ago, Mac Mickmanus said:

The U.K will be on a downward spiral for the next year/18 months , could be catastrophic with inflation in double figure, interest rates will rise and due to recent long term  low interest rate , many people wont be able to pay back their mortgage .

   The Covid cost will need to be paid for through tax adjustments .

The U.K is in for a difficult time and the Pound could plummet , The Pound had a significant drop when interest rates rose by .5 % and they are expected to rise by a further 1 % next year .

Actually, most home loans in the UK are fixed rate loans. Which is bad news for banks but tends to be good news for those who have taken out loans. . It's a little known fact that a huge benefit from inflation in the USA  that occurred during WW2 was due to the fact that homeowners' loans became a lot easier to manage and freed up a lot of consumer spending.

Actually, when interest rates on treasury notes are raised, the tendency is for the currency to increase in value. So if the pound declined when interest rates were raised by .5% it was despite that, not because of it.

[Mac Mickmanus]

8 minutes ago, placeholder said:

Higher than the EU average. And the UK is blessed with being able to treat its workers like sh*te compared to EU nations with advanced economies.

Well, the E.Us average inflation rate is 8.9 %

The U.K's inflation rate is 9.1 %

Not really a relevant  difference .

Rather odd that 6 Million E.U citizens want to work in the U.K . considering they get such bad treatment ?

[placeholder]

7 minutes ago, Mac Mickmanus said:

Lady Thatcher cut the taxes in the 1980's and got the economy booming , that was just after Labours tax and spend policies that bought the U.K to a standstill , strikes, high inflation , Unions running the show .

   It worked last time ,  

Some people think tax cuts are magic. In the USA right wingers consider them to be pretty much a panacea even though there's precious little evidence that they work. While they may have worked under Thatcher, there wasn't galloping inflation then. A lot of it depends on how high tax rates were before Thatcher compared to how high they are now.

[placeholder]

6 minutes ago, Mac Mickmanus said:

Well, the E.Us average inflation rate is 8.9 %

The U.K's inflation rate is 9.1 %

Not really a relevant  difference .

Rather odd that 6 Million E.U citizens want to work in the U.K . considering they get such bad treatment ?

In June EU's average rate of increase was 8.6.  UK's 9.4

[Mac Mickmanus]

6 minutes ago, placeholder said:

The problem with this is that it makes no distinction 

 

Actually, most home loans in the UK are fixed rate loans. Which is bad news for banks but tends to be good news for those who have taken out loans. .

Those fixed rate loans are usually for 1-2-5 + years (and some were taken out years ago )and those with expiring fixed rate loans will suddenly see a huge  immediate increase in repayments .

   With the cost of living increase and higher mortgage repayments , quite a few people will lose their homes and this could cause a property market crash as they would be many homes for sale and not enough buyers

[Chomper Higgot]

3 minutes ago, Mac Mickmanus said:

Those fixed rate loans are usually for 1-2-5 + years (and some were taken out years ago )and those with expiring fixed rate loans will suddenly see a huge  immediate increase in repayments .

   With the cost of living increase and higher mortgage repayments , quite a few people will lose their homes and this could cause a property market crash as they would be many homes for sale and not enough buyers

Which is precisely why people need to think about the consequences of cutting taxes during a period of high inflation.

 

Truss’ own preferred economist has warned her tax cuts will cause interest rates to rise, perhaps to 7%.

 

 

[Mac Mickmanus]

16 minutes ago, placeholder said:

In June EU's average rate of increase was 8.6.  UK's 9.4

I was giving the figure  from July 

 

"Euro area annual inflation is expected to be 8.9% in July 2022, up from 8.6% in June according to a flash estimate from Eurostat, the statistical office of the European Union. "

[Mac Mickmanus]

23 minutes ago, Chomper Higgot said:

 

 

Truss’ own preferred economist has warned her tax cuts will cause interest rates to rise, perhaps to 7%.

 

 

Which would be great news for people with a couple of quid in the bank

[placeholder]

26 minutes ago, Mac Mickmanus said:

I was giving the figure  from July 

 

"Euro area annual inflation is expected to be 8.9% in July 2022, up from 8.6% in June according to a flash estimate from Eurostat, the statistical office of the European Union. "

But you're comparing the actual uk june inflation rate to the projected July rate for the EU.

[Mac Mickmanus]

2 minutes ago, placeholder said:

But you're comparing the actual uk june inflation rate to the projected July rate for the EU.

And its quite irrelevant . 

Its not a competition between the E.U and the U.K to see who can get the lowest inflation figures .

   Some E.U Countries have a higher rate of inflation than the U.K and some E.U Countries  have a lower inflation rate and the U.K is somewhere in the middle and roughly the same as the other Countries, all about 8-12 % .

   But, not really relevant . 

[placeholder]

7 minutes ago, Mac Mickmanus said:

And its quite irrelevant . 

Its not a competition between the E.U and the U.K to see who can get the lowest inflation figures .

   Some E.U Countries have a higher rate of inflation than the U.K and some E.U Countries  have a lower inflation rate and the U.K is somewhere in the middle and roughly the same as the other Countries, all about 8-12 % .

   But, not really relevant . 

Except for Belgium, all the highly developed economies in the EU have a lower rate of inflation than does the UK. And you still haven't explained why you compared a projected rate for the EU in July, to an actual rate for the UK in June.

[Mac Mickmanus]

1 minute ago, placeholder said:

Except for Belgium, all the highly developed economies in the EU have a lower rate of inflation than does the UK. And you still haven't explained why you compared a projected rate for the EU in July, to an actual rate for the UK in June.

Well yeah . apart from Belgium, Iceland, Holland , Spain , Cyprus, Hungary , Serbia, Croatia and Greece , the UK has the highest inflation rate .

   The E,U has an inflation rate of 9.6 %

The U.K has an inflation rate of 9.4 %