like the queen this thread will never die: in which we ALL resign (ourselves to disgusting miseries to post-boris politics 2022)

Doubt they'll get rid of her but let's enjoy the banter.

Would be an incredible achievement to be elected leader of your party, become Prime Minister, kill the queen, tank the pound and get fired all within one menstrual cycle. Unreal girlbossing. https://t.co/acVwIh8UPl

— Sister Birkin (@judeinlondon2) September 26, 2022

borrowing requirements would fall a lot if say, UK government announce a massive cut in NHS spending, education, no net zero, privatisation of strategic assets (NHS again) to contain pressures on sterling/gilts.

— Daniela Gabor (@DanielaGabor) September 26, 2022

it was reported before Truss premiership even started that a big batch of letters of no-confidence were going in within weeks anyway, now she's doing such a grand job of growing the economy there might be a few more, especially from the less secure of the 2019 intake.

Johnson back by Xmas

"I'm not going to make any comment now".

Chancellor Kwasi Kwarteng remains tight-lipped when questioned about the mini-budget.

Follow live updates: https://t.co/ZTbv6x8cal

📺 Sky 501, Virgin 602, Freeview 233 and YouTube pic.twitter.com/SclRbA7L2s

— Sky News (@SkyNews) September 26, 2022

already looks like dead man walking and this is the honeymoon period

I thought chancellor's are supposed to reassure the markets or like say something when they've just tanked the pound, lol.

That is odd!

I heard a load of headlines and talk on radio about the economy. I realised I didn't understand any of it.

Imagine you're Kwasi Kwarteng: you've got strident views about economic policy and you even wrote a book about it. you finally get the job as chancellor, the peak of your game, and get to test out your ideas! turns out they are garbage and the economy explodes

— Jon Stone (@joncstone) September 26, 2022

I mean this guy went through Eton had a Kennedy scholarship at Harvard etc.. so he can't be *that* thick. Yet a lot of evidence suggests otherwise.

I heard a load of headlines and talk on radio about the economy. I realised I didn't understand any of it.
Neither do I. Neither do politicians. And that's the tragedy.

I mean, if every wage demand of every union was automatically met for all time, would we really be in a worse position economically than we are? Politicians and economists rely on us believing them when they tell us that it would be, but I've made a point of never just believing anything anyone ever tells me ever! I've got to be 51 years old and it's served me reasonably well thus far.

they always wheel out some of the grimmest think-tank ghouls to talk economics on R4 and I just assume every word is a lie.

I mean this guy went through Eton had a Kennedy scholarship at Harvard etc.. so he can't be *that* thick.

You reckon? Being an Old Etonian certainly helps open doors.

he may even be thick enough to beat Zawahi's record as 2nd shortest-serving chancellor since 1970.

Does anyone know why UK mortgages tend to be variable rate but almost all US mortgages (all but a couple of percent, even now) are fixed rate? Do fixes rate mortgages even exist in the UK?

“ Most people will never actually pay this rate, as they'll switch deals several times before their mortgage is paid off. For further reading see Martin's why mortgage APRs are meaningless blog.”

Wtf. So everyone pays 2% regardless of BOE rates and does a bunch of paperwork every couple of years?

xp yes they do, we have one. The rate isn’t fixed forever, it exists for five years and you renegotiate then usually

Calzino: yes, after a few minutes of R4 news I thought: why am I hearing long, unchallenged statements from this one 'expert' person, presented as an authority, who has a particular view of the economy, who has not been elected and who presumably serves interests that have not here been disclosed?

I didn't understand what he was saying except that it was a mixed bag of good and bad for the government. Maybe it is. But again, leaving aside that I didn't understand it, he was effectively getting a free platform to broadcast a, presumably partisan, view without it being queried.

https://www.theguardian.com/politics/2022/sep/26/rachel-reeves-conference-speech-labour-party-economic-competence

"Some obvious questions were also left unanswered. Labour would not reverse the government’s cut in the 20% rate of income tax or the decision to scrap the increase in national insurance contributions that took effect in April, but it has not said how it would pay for these commitments."

Good bet that Labour will continue a lot of the policies post-Truss.

xxp, yeah that was my understanding of uk mortgages. i guess i'm asking *why* they're like that? those exist in the us, but almost no one takes them. pretty much everyone takes a 30 year fixed rate. it seems like mortgages that are fixed for the term of the mortgage don't exist in the uk? surely if they existed then people would have taken them in 2020 when the BOE rate was ~0?

i'm assuming it's a law or a financial incentive rather than "uk buyers love risk and/or paperwork", which seems unlikely.

Idk I thought you were British and could explain that to me?

haven't lived there for 15 years (tragically lost the right to vote from overseas this year), never bought a house there.

i guess my question is one for rishi santa monica sunak rather than here though.

not just thinking out loud though. if everyone's on mortgage rates that are fixed for 5 years and has no expectation of every paying the BoE rate then that seems like it changes the politics of central bank rates a lot?

this may not be fair -- it's not like i watch or listen to any of these shows lol -- but the two well-thought-of big-name specialist economic bbc journalists whose job ten-plus years ago was explaining economics and being the journalist who did interrogate the so-called experts were… robert peston and paul mason

You’re assuming everyone has the understanding of personal finance that you do. First time buyers or people who are first time owners in their families are often in a very different position.

xp: how far have we travelled since then!

i'm not saying one kind of mortgage is better than the other or that first time buyers should make the same choice as me. i'm wondering why almost all buyers make different choices in two countries.

xxp i assume he's awful now, but evan davis seemed to do a fairly good job of explaining things like this iirc. i guess alphaville covers it too?

AIUI the US system is unusual and the UK's system is more typical among western countries (I don't know anything about mortgages elsewhere).

A conversation I remember having once went along the lines of: on the face of it a full-term fixed-rate mortgage would likely be more expensive than a shorter fix bought at the same time because the lender would have to price in more risk of interest rates rising over time (and they are unlikely to price interest rates falling in the same way). In the US this is mitigated by the government being in place as a lender to the lenders. I mam too economically illiterate to know whether this makes sense, I'm afraid.

I can see the sense in taking a full-term fixed mortgage over the last few years, for sure.

i'm not saying one kind of mortgage is better than the other or that first time buyers should make the same choice as me. i'm wondering why almost all buyers make different choices in two countries.

US system also has property taxes so perhaps the long fixed rate mortgages are developed on that assumption.

How do you mean, gyac? How does property tax in the US differ from council tax in the UK, in order to to make a difference to the fix of a mortgage?

was it 20 years ago? when all the big UK lenders heavily pushed endowment mortgages at customers, at one point it was hard to get any other kind. that went well

(When I bought my flat in the early 00s, ISTR I fixed for 5 years and there were longer fixes available, 10 years was the longest I recall. The longer they were, the more expensive they got and so 5 years was a balance between the security of the fix and the additional expense.)

tim i guess that makes sense. i think you're saying something like ... fixed rates are more expensive than variable rates to price in the increased risk over 30 years rather than 5. the increased risk is lower US because the the central bank's behavior is more predictable because it dominates the world economy more than, e.g. the BoE.

BoE is not lifting a finger. The markets were looking for a rate rise today/this week.

---

Andrew Bailey says that the Bank is monitoring developments in financial markets “very closely” in light of the significant repricing of financial assets.

And he says that the Bank will make a full assessment of the government’s Growth Plan at its next scheduled meeting in early November.

Bailey says:

In recent weeks, the Government has made a number of important announcements. The Government’s Energy Price Guarantee will reduce the near-term peak in inflation. Last Friday the Government announced its Growth Plan, on which the Chancellor has provided further detail in his statement today. I welcome the Government’s commitment to sustainable economic growth, and to the role of the Office for Budget Responsibility in its assessment of prospects for the economy and public finances.

The role of monetary policy is to ensure that demand does not get ahead of supply in a way that leads to more inflation over the medium term. As the MPC has made clear, it will make a full assessment at its next scheduled meeting of the impact on demand and inflation from the Government’s announcements, and the fall in sterling, and act accordingly.

The MPC will not hesitate to change interest rates as necessary to return inflation to the 2% target sustainably in the medium term, in line with its remit.

xp I don't think it was just the global dominance thing, I think it was something to do with a guaranteeing effect of Freddie Mac and Fannie Mae, but my knowledge has run out I'm afraid.

ah that would make sense too.

More awfulness to come:

New: A token to reassure markets from the Chancellor 👇

🏦 Kwarteng 'will set out his medium-term fiscal plan on 23 November'.
🏦 Will come with an OBR forecast.
🏦 Full Budget delayed to Spring.
🏦 Abandoned new spending review putting the squeeze on departmental budgets. pic.twitter.com/Q1wquZLUUj

— Tom Witherow (@TomWitherow) September 26, 2022

fannie mae etc. allows a bank to more easily/cheaply guarantee a mortgage will be repaid, which would reduce risk over 30 years.

state price controls are fine in the US as long as you're rich enough to buy a house apparently.

presumably mortgages in the uk are not backed the same way, which means banks charge more.

anyway, as you were. just curious why anyone in the uk gives a shit about interest rates given how the mortgage market there works.

How do you mean, gyac? How does property tax in the US differ from council tax in the UK, in order to to make a difference to the fix of a mortgage?

They definitely are!

anyway, as you were. just curious why anyone in the uk gives a shit about interest rates given how the mortgage market there works.

ok. always fun to chat.

Likewise.

i have no memory of that post, but reading it back it's a bad post and it barely makes sense. sorry.

Here are other American internet ppl reacting to mortgage rates

I always forget that mortgage rates in Europe and the uk aren’t fixed https://t.co/mnl9w4RCE3

— suzuki ingmar burgman (@xoayquanh) September 26, 2022

Great, any party will have to deal with Lib Dems till the end of civilization. I vote dictatorship.

BREAKING: Labour conference just voted to support Proportional Representation.

— LCER (@Labour4PR) September 26, 2022

xp: another American who is devastated at these rates.

Aghast to learn the UK has a substantial number of mortgage holders with floating rates. The coming crisis will absolutely devastate a lot of peoples' lives, with lots of folks possibly losing their homes https://t.co/aug2hmgdGW

— René 🟥 (@rcmoya84) September 26, 2022

he should read the bit on money saving expert where lewis tells uk borrowers not to worry about variable rates.

it’s almost as if it were grossly immoral to profit from a system that loads up so much risk onto families and individuals borrowing money for shelter sorry just gonna stop myself there

i thought PR was off the table so conference will just be ignored?