Every day Gordon Brown comes up with some phony statement about how the economy is fine and how we will ride out the current problems. Increasingly it looks like he has lost the plot.
My circumstances are that our three year fixed rate mortgage comes up in the Autumn and it will mean an increase of around £100 per month to out mortgage repayments. Yet if you look at my pay rise for the last three years added together I am now earning just about exactly £100 a month more after tax than I was three years ago. Meaning I will have effectively had three years worth of pay rises wiped out.
Now multiply this across the country, with millions of people's fixed rate deals all coming to an end and more and more people having to pay more for their mortgages, and what's more, tying themselves down to a set rate for three or five years. In effect, this means that we are not only going to see a recession in this country because of the effect of people paying more for mortgages (to pay for houses that will be dropping in value), but the system ties people in to paying recession prices mortgages for some years to come, thus stopping the cycle of money that might kick start a growth out of recession.
Gordon Brown has got to wake up to the fact that current interest rates are unsustainable high and have nothing to do with controlling inflation. Everyone knows that interests rates have no control over inflation which is now driven by a rise in fuel and food prices and has nothing to do with consumer spending, yet brown appears absolutely clueless as to what to do.
6 comments:
And yet this man was the Chancellor.
Nick - you are not obliged to take out another fixed rate mortgage. Halifax has some quite attractive tracker deals at approx base rate plus 0.5%, with a fee of £500-£1000. I don't think you are tied in either, so if fixed rate mortgages of 3.99% return, you can snap one up.
Good luck!
The suprise to me is that Labour have lasted 10 years before they have messed it all up. i saw it all before with labour in the 60s. they had not a clue then and have not now.
They have taken this country backwards. they have spent to much and taxed so much that enterprise economy is finished.
They do not know what to do about it. Italy have rid themselves of the left after 2 years. It will be 13 before we do.
If interest rates go down then the pound goes down and the costs of food, fuel and everything else goes up. Keep interest rates high I say and defend the value of the pound to control inflation.
May I be allowed to offer some professional advice? Well, I am going to anyway. 1) Only buy a fixed rate if you need, absolutely need budgetary certainty for a fixed time. Never buy one to 'save you money' because it won't. 2) If you want the cheapest way of paying your mortgage look around for a tracker that tracks the B o E base rate (NOT the lending institutions base rate!) by as lower margin as possible. Go for a lifetime tracker, if you can get it, with as low fees as possible and no early redemption charges and the ability to overpay without costs as well. IMHO a good tracker rate is BBR plus 0.5% to 1.0%. That is all the margin the banks need - and deserve.
...and further to my 'advice' - Brown,s a tosser.
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