Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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Surely it is the borrowing now, on top of the borrowing then.
It is like using a credit card to pay the mortgage.
The mortgage was too high all along as we didn't have big enough of a deposit.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Liz Truss said in her hustings that she wanted to put the debt on a longer term footing.0
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10 years are fine.
Maybe @focuszing723and his rates charts were in fact a comment on how the treasury was managing the gilt sales.0 -
surely the term should match the length that you intend having the debt. If the Govt had borrowed forever at a rate of sub 1% your theory would make sense.rick_chasey said:10 years are fine.
Maybe @focuszing723and his rates charts were in fact a comment on how the treasury was managing the gilt sales.0 -
lol - so I come to you and ask to borrow £100k to fund an MBA to imorove my future productivity and you would not care about my levels of existing debt? You would charge the same % whether I had no debt and bountiful assets as if I owed £1m on credit cards, Wonga and unsecured loans?rick_chasey said:
Nothing to do with existing debt levels, everything to do with the incoming, unfunded, spend.surrey_commuter said:Is everybody still happy with our debt levels?
The issue is the borrowing now, not the borrowing then. You do get that, right?surrey_commuter said:
a fine analogy, the problem is that the £2trn was lent to the sober guy but now his unruly grandchildren need to refinance.rjsterry said:
With this lot, no.surrey_commuter said:Is everybody still happy with our debt levels?
If you'll pardon the analogy. You might lend to an established and soberly run organisation with a strong track record but not a new start-up whose request for a loan states that their plan is to take the money straight down to the bookmaker to put it on a horse.
If I remember rightly it will be fine becuase we have a sovereign currency and we only borrowed for investment and it would have been mad not to.0 -
OK explain to me why gilt markets were so chill up until now then?surrey_commuter said:
lol - so I come to you and ask to borrow £100k to fund an MBA to imorove my future productivity and you would not care about my levels of existing debt? You would charge the same % whether I had no debt and bountiful assets as if I owed £1m on credit cards, Wonga and unsecured loans?rick_chasey said:
Nothing to do with existing debt levels, everything to do with the incoming, unfunded, spend.surrey_commuter said:Is everybody still happy with our debt levels?
The issue is the borrowing now, not the borrowing then. You do get that, right?surrey_commuter said:
a fine analogy, the problem is that the £2trn was lent to the sober guy but now his unruly grandchildren need to refinance.rjsterry said:
With this lot, no.surrey_commuter said:Is everybody still happy with our debt levels?
If you'll pardon the analogy. You might lend to an established and soberly run organisation with a strong track record but not a new start-up whose request for a loan states that their plan is to take the money straight down to the bookmaker to put it on a horse.
If I remember rightly it will be fine becuase we have a sovereign currency and we only borrowed for investment and it would have been mad not to.
You can't just use the market when it suits you and not when it doesn't.
I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't. This gov't over the last decade has done the opposite.0 -
When you are buying your own debt the market has no voice.rick_chasey said:
OK explain to me why gilt markets were so chill up until now then?surrey_commuter said:
lol - so I come to you and ask to borrow £100k to fund an MBA to imorove my future productivity and you would not care about my levels of existing debt? You would charge the same % whether I had no debt and bountiful assets as if I owed £1m on credit cards, Wonga and unsecured loans?rick_chasey said:
Nothing to do with existing debt levels, everything to do with the incoming, unfunded, spend.surrey_commuter said:Is everybody still happy with our debt levels?
The issue is the borrowing now, not the borrowing then. You do get that, right?surrey_commuter said:
a fine analogy, the problem is that the £2trn was lent to the sober guy but now his unruly grandchildren need to refinance.rjsterry said:
With this lot, no.surrey_commuter said:Is everybody still happy with our debt levels?
If you'll pardon the analogy. You might lend to an established and soberly run organisation with a strong track record but not a new start-up whose request for a loan states that their plan is to take the money straight down to the bookmaker to put it on a horse.
If I remember rightly it will be fine becuase we have a sovereign currency and we only borrowed for investment and it would have been mad not to.
You can't just use the market when it suits you and not when it doesn't.
I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't. This gov't over the last decade has done the opposite.0 -
The gilt markets are still "chill". They're just forecasting higher interest rates.0
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I can't be bothered to calculate the actual yields, but 4.5% gilts are above par. I'm sure someone posted a graph of historical rates that that could be compared against.0
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he might mean to save the hyperbole for when we try and rollover or sell new debtrick_chasey said:In what way is one of the most dramatic collapses ever in the gilt market "chill"?
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For example, if you look at the Treasury 4.5% 07/12/2042 gilt. It closed Thursday at 3.85% and Friday at 4.08%. It is currently between 4.27% and 4.38%. Long term rate expectations have gone up, but if FocusZing would like to post his graph, those rates can be compared with history.0
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Very randomly, I have this graph from 2009. Shows the change in rates for the 2027 gilt, so approximately the same as above.
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What this tells me is that we have ~30 years of the debt going up before it starts to come back down.TheBigBean said:- Genesis Croix de Fer
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What it tells me is that we are currently way higher than anytime not actually at war or recovering from being at war.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.1 -
Could you cause COVID war-like?
Shame not to claw some back through a windfall tax...0 -
You could, but we've kicked on further from there.shirley_basso said:Could you cause COVID war-like?
...The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
this is the correct answerpblakeney said:What it tells me is that we are currently way higher than anytime not actually at war or recovering from being at war.
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You don't remember rightly. The problem is the change in the behaviour of the borrower. It is that which has sent the rates of lenders up. This obviously has an effect on the existing debt but again it's the behaviour of the borrower that is the cause and changing that would resolve the situation. If the sober guy steps in and reassures everyone, the lender can relax a bit.surrey_commuter said:
a fine analogy, the problem is that the £2trn was lent to the sober guy but now his unruly grandchildren need to refinance.rjsterry said:
With this lot, no.surrey_commuter said:Is everybody still happy with our debt levels?
If you'll pardon the analogy. You might lend to an established and soberly run organisation with a strong track record but not a new start-up whose request for a loan states that their plan is to take the money straight down to the bookmaker to put it on a horse.
If I remember rightly it will be fine becuase we have a sovereign currency and we only borrowed for investment and it would have been mad not to.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Wasn't the 1830 peak compensating the slave owners?0
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Peak was 1815 and it was the Napoleonic wars.TheBigBean said:Wasn't the 1830 peak compensating the slave owners?
Worth it for being the global superpower for the next century.0 -
sober guy is long gone, you have to deal with his successors as the debt rolled over to them.rjsterry said:
You don't remember rightly. The problem is the change in the behaviour of the borrower. It is that which has sent the rates of lenders up. This obviously has an effect on the existing debt but again it's the behaviour of the borrower that is the cause and changing that would resolve the situation. If the sober guy steps in and reassures everyone, the lender can relax a bit.surrey_commuter said:
a fine analogy, the problem is that the £2trn was lent to the sober guy but now his unruly grandchildren need to refinance.rjsterry said:
With this lot, no.surrey_commuter said:Is everybody still happy with our debt levels?
If you'll pardon the analogy. You might lend to an established and soberly run organisation with a strong track record but not a new start-up whose request for a loan states that their plan is to take the money straight down to the bookmaker to put it on a horse.
If I remember rightly it will be fine becuase we have a sovereign currency and we only borrowed for investment and it would have been mad not to.0 -
Sounds like people are trying to depose the successors already.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
There's a certain circularity though. One of the reasons UK borrowing costs were relatively low until recently was that the UK government was assumed to to fiscally competent. If the UK had gone on a borrowing splurge because borrowing costs were low then borrowing costs would have increased if investors decided that the government was no longer fiscally competent. The hit to the £ exchange rate overnight came because of comments that Kwarteng has made about future tax cuts, which damaged his credibility even further, not because of anything he'd actually done.rick_chasey said:I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't.
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I disagree. If you have an independent central bank, the direction they're doing their monetary policy ought to inform what you an and can't do.wallace_and_gromit said:
There's a certain circularity though. One of the reasons UK borrowing costs were relatively low until recently was that the UK government was assumed to to fiscally competent. If the UK had gone on a borrowing splurge because borrowing costs were low then borrowing costs would have increased if investors decided that the government was no longer fiscally competent. The hit to the £ exchange rate overnight came because of comments that Kwarteng has made about future tax cuts, which damaged his credibility even further, not because of anything he'd actually done.rick_chasey said:I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't.
Of course in an ideal world you could synchronise rate policy and fiscal policy but we know in the real world politicians can't trust themselves.
Nonetheless, if the rate is so low it can't go any lower without a tonne of QE, guess what, the economy could do with a bit more fiscal stimulation?
If inflation is at 10% and the BoE is hiking rates, maybe don't go huge on the fiscal expansion?
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The rates were low because the market expected interest rates to remain low reflecting a period of low growth.wallace_and_gromit said:
There's a certain circularity though. One of the reasons UK borrowing costs were relatively low until recently was that the UK government was assumed to to fiscally competent. If the UK had gone on a borrowing splurge because borrowing costs were low then borrowing costs would have increased if investors decided that the government was no longer fiscally competent. The hit to the £ exchange rate overnight came because of comments that Kwarteng has made about future tax cuts, which damaged his credibility even further, not because of anything he'd actually done.rick_chasey said:I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't.
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That's one of the reasons but clearly not the only reason. Growth is currently expected to be low yet interest rates are expected to rise sharply.TheBigBean said:
The rates were low because the market expected interest rates to remain low reflecting a period of low growth.wallace_and_gromit said:
There's a certain circularity though. One of the reasons UK borrowing costs were relatively low until recently was that the UK government was assumed to to fiscally competent. If the UK had gone on a borrowing splurge because borrowing costs were low then borrowing costs would have increased if investors decided that the government was no longer fiscally competent. The hit to the £ exchange rate overnight came because of comments that Kwarteng has made about future tax cuts, which damaged his credibility even further, not because of anything he'd actually done.rick_chasey said:I'm very much a "listen to what the market is telling you" approach. i.e. borrow when it's cheap, don't when you don't.
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