StillSpike wrote: ↑Mon Sep 26, 2022 12:11 pm
So the talk about bonds, gilts and yields means what? Is it people selling something, the price of which indicates that the city boys reckon that interest rates will go up to 5.75%+ ?
It represents what it will cost the government to borrow money to fund its budget plans. The increase in yields is the market saying to the UK government that they don't think we're a good bet so they want a better returns on their investment. This means that the cost of government borrowing will be much higher than initially predicted.
The markets are also betting that the BoE will raise interest rates to make the pound more attractive. This is in response to the drop in the pound and to the increase in bond yields.
If the BoE does this (and it may), it will result in about 100,000 households per month - every month - entering into severe financial stress. That will have an impact on their levels of economic activity (if not repossession of their homes) that will compound the negative economic effects being felt already.
Yep that sums it up. The Tories putting “the cherry on top” of the their reckless hard Brexit crusade. I really would question their actual Patriotism. It’s as if there are external forces at work to wreck this country.
Re: mini budget
Posted: Mon Sep 26, 2022 4:06 pm
by The Mindsweep
Do do, do do
F***ing useless
Re: mini budget
Posted: Mon Sep 26, 2022 4:30 pm
by Dunners
Looks like the Treasury's plan to try and calm things down is to promise a medium-term fiscal plan and OBR review on 23 November. We'll see if this works.
Re: mini budget
Posted: Mon Sep 26, 2022 4:43 pm
by Dunners
The BoE has issued this statement which stops just short of declaring war on HM Treasury.
Re: mini budget
Posted: Mon Sep 26, 2022 4:46 pm
by Dunners
And then this is how the pound responded immediately after the statement. LOL.
Re: mini budget
Posted: Mon Sep 26, 2022 5:30 pm
by Orient Punxx
Keep ‘em coming Dunners. This is so fuxxin depressing I’ll just rely on your succinct commentary. Cheers.
Markets forced the UK out of the ERM in 92, the current lot won't be able to fund their program via debt. They will need to change course
Re: mini budget
Posted: Mon Sep 26, 2022 6:31 pm
by The Mindsweep
Re: mini budget
Posted: Mon Sep 26, 2022 6:39 pm
by Admin
Got to say that Ole Dunners is providing excellent commentary here. I have absolutely no idea whether it's accurate or complete bollocks but I'm repeating it line by line to all and sundry as my own thoughts in order to make myself look vaguely intelligent.
Needless to say, if it's all wrong, he will be Perma'd from this place.
Re: mini budget
Posted: Mon Sep 26, 2022 7:04 pm
by Dunners
Quite right too.
The good news is that I may be wrong.
The bad news is that I'm probably not. And now that high street banks have started to announce withdrawal of mortgage products, it would appear that they're also reading my posts on here too.
Re: mini budget
Posted: Mon Sep 26, 2022 10:14 pm
by Adz
For those struggling a bit here I've worked in IT in the rates business for an investment bank for the last 10 years.
Think of bonds as term deposits at a bank. If you can get 4% on a savings account and interest rates are on the way up you wouldn't lock your money into a 2 year term deposit without the rate being much higher.
Now consider that bonds already exist for you to buy, and the amount of interest they pay each year (coupon) was fixed when interest rates were much lower. Bonds are openly traded, so you'd want some discount on it which means it's price falls. Yields are the calculation of its expected return over the duration of the bond, so are inversely proportionate to prices.
This about as simple as I can explain it without going into the a whole bunch of other things, which I'm happy to do if anyone wants it.
Re: mini budget
Posted: Mon Sep 26, 2022 10:19 pm
by Long slender neck
Tldr
Re: mini budget
Posted: Mon Sep 26, 2022 10:31 pm
by Orient Punxx
Re: mini budget
Posted: Mon Sep 26, 2022 10:47 pm
by Max Fowler
Adz wrote: ↑Mon Sep 26, 2022 10:14 pm
For those struggling a bit here I've worked in IT in the rates business for an investment bank for the last 10 years.
Think of bonds as term deposits at a bank. If you can get 4% on a savings account and interest rates are on the way up you wouldn't lock your money into a 2 year term deposit without the rate being much higher.
Now consider that bonds already exist for you to buy, and the amount of interest they pay each year (coupon) was fixed when interest rates were much lower. Bonds are openly traded, so you'd want some discount on it which means it's price falls. Yields are the calculation of its expected return over the duration of the bond, so are inversely proportionate to prices.
This about as simple as I can explain it without going into the a whole bunch of other things, which I'm happy to do if anyone wants it.
So that’s why you’re in Computers.
Re: mini budget
Posted: Tue Sep 27, 2022 9:34 am
by Dunners
It now costs the UK government more to borrow money than it does the governments of Greece and Italy.
Greece and Italy. You know, those two well-known examples of economic growth and stability.
And the Pound has not just lost value against the Dollar (which is sort of understandable), but against the Euro. And the Russian Ruble. Yep, the f*cking Ruble.
Still, at least it's not Corbyn.
Re: mini budget
Posted: Tue Sep 27, 2022 10:26 am
by Max B Gold
Dunners wrote: ↑Tue Sep 27, 2022 9:34 am
It now costs the UK government more to borrow money than it does the governments of Greece and Italy.
Greece and Italy. You know, those two well-known examples of economic growth and stability.
And the Pound has not just lost value against the Dollar (which is sort of understandable), but against the Euro. And the Russian Ruble. Yep, the f*cking Ruble.
Still, at least it's not Corbyn.
This is all very well but how is Sterling fairing against the RMB.
Re: mini budget
Posted: Tue Sep 27, 2022 12:51 pm
by Max B Gold
Re: mini budget
Posted: Tue Sep 27, 2022 1:04 pm
by Max Fowler
This is it, isn’t it?
Re: mini budget
Posted: Tue Sep 27, 2022 1:14 pm
by CEB
What’s the likely impact on flogging sketches of peoples dogs?
Re: mini budget
Posted: Tue Sep 27, 2022 1:15 pm
by BoniO
There is a positive side though. I've just sold my house in France so will coin it on the exchange back to Sterling.
Hasn't the idiot ever seen Mary Poppins . He should have kept hold of his umbrella .
Re: mini budget
Posted: Tue Sep 27, 2022 2:10 pm
by Max B Gold
BoniO wrote: ↑Tue Sep 27, 2022 1:15 pm
There is a positive side though. I've just sold my house in France so will coin it on the exchange back to Sterling.
Then what? You may not have noticed but inflation is rampant and Sterling is tanking. Hodl for now or get some Crypto.
BoniO wrote: ↑Tue Sep 27, 2022 1:15 pm
There is a positive side though. I've just sold my house in France so will coin it on the exchange back to Sterling.
Then what? You may not have noticed but inflation is rampant and Sterling is tanking. Hodl for now or get some Crypto.
Every year my Sister has bought 5k of $ for the last 2 decades. Just cashed in yesterday . 4X trading has its perks I suppose .
