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Britain fires with both barrels - emergency rate cut and budget boost

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Yes, the performance of the British Pound has been spectacular:

 

 

Full USDGBP history.jpg

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Posted (edited)
23 minutes ago, JonnyF said:

Meanwhile you Bogans can only dream of your Aussie dollar reaching parity with the USD 😆

 

image.png.a82e799ade80baf222acb60194cfa8e3.png

Why do you think I care about the Aussie dollar? I earn US dollars.

 

I also don’t tie up my sense of identity with what a currency happens to be doing...but good try anyway. 
 

A friendly tip for next time so you can further refine your insult skills, your use of ‘bogan’ was just darn awkward. 

Edited by samran
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16 minutes ago, vinny41 said:

So when you posted Every year the UK has to go cap in hand to the capital markets and beg Japan, the US and Germany to give the UK money to pay its pensioners. that was total bullocks

The state pension is paid for by national insurance contributions, which come from the wages of people working today. Effectively, each working generation pays for the older generation above them. 

 

Look up ‘demographic time bomb’ and ‘baby boomer bulge’ in the order, the work your way backwards.

 

Come back and let us know what you find out...

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12 minutes ago, samran said:

Look up ‘demographic time bomb’ and ‘baby boomer bulge’ in the order, the work your way backwards.

 

Come back and let us know what you find out...

In our latest forecast, we estimate outturn spending on state pensions in 2017-18 to total £93.8 billion in Great Britain. We forecast spending to increase to £96.6 billion in 2018-19, with 12.7 million recipients paid an average of £7,610 each. That would represent around 12 per cent of total public spending, and 4.6 per cent of national income.

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-state-pension/

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1 hour ago, Laughing Gravy said:

Meanwhile in the real world everyone is saying one of the best budgets for a generation. 

 

https://www.thetimes.co.uk/edition/news/budget-2020-sunaks-30bn-spree-is-biggest-giveaway-since-1992-blhl2jqzk

 

Nothing could be further from the truth;

 

"A surge in public spending risks exposing the UK economy to a shock rise in borrowing costs, according to the government's spending watchdog.

Abandoning long-term goals to balance the books could have consequences, the Office for Budget Responsibility said.

The OBR said higher borrowing and debt would leave Britain "vulnerable" to changing investor sentiment."

 

The warning came as the chancellor unveiled the biggest Budget giveaway since 1992.

 

But higher spending over the long-term would be likely to lead to higher borrowing, which could prompt a rise in the cost of that borrowing.

Public borrowing is already forecast to climb to a six-year high by 2022 without taking into account these additional spending measures.

 

 

Budget gamble?

 

However, the OBR said the government's decision to move away from trying to reduce Britain's debt in relation to the size of the economy, could store up problems for the future.

The last government said it aimed to bring down public sector net debt, but it now is projected to remain steady at around 75% of GDP over the next five years.

 

Sir Charlie Bean, a member of the OBR's budget responsibility committee, added: "Clearly the more debt you build up, the more exposed you are if things go wrong.

"And there's a good general principle that you want to have the debt-to-GDP ratio declining in good times, to build up the space for responding precisely to the events like the coronavirus.

"If you only have the ambition to keep debt constant as a proportion of GDP, every time you get a bad shock, you just ratchet that up again."

 

The spending in this Budget is being largely paid for with a big increase in government borrowing.

 

https://www.bbc.com/news/business-51836555

 

So pretty much exactly what I've been saying. There are sane voices in the UK even, however, they're drowned up by the Rule-Britannia screaming  Brexiters who'd rather let future generations pay for how they live now.

 

The UK fired with both barrels allright.....at the future of its own children. 

 

Responsible fiscal management has a different look.

 

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16 minutes ago, Logosone said:

The UK fired with both barrels allright.....at the future of its own children. 

We (that's you too, Grouse) were still paying for WW2 until 2006 so what's new?

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37 minutes ago, vinny41 said:

So when you posted Every year the UK has to go cap in hand to the capital markets and beg Japan, the US and Germany to give the UK money to pay its pensioners. that was total bullocks

 

No, I'm afraid not.

 

"The government is now set to borrow £54.8bn in the coming financial year to plug the gap between the money it spends on public services and the tax revenues it collects. This is much higher than the £40.2bn that was forecast."

https://www.bbc.com/news/business-51836555

 

If you think National Insurance contributions or taxes are enough to finance UK pensions you've not been keeping up with developments. The UK has to borrow every year in the capital market and issue bonds to creditors to finance the money it hands out.

 

39 minutes ago, vinny41 said:

The state pension is paid for by national insurance contributions, which come from the wages of people working today. Effectively, each working generation pays for the older generation above them. 

 

 

“Today’s population has built up £7.6trn in pension promises but has only set aside about a third of that amount to pay for them,” Webb said. “The rest will have to be financed by tomorrow’s workers. 

 

https://www.ipe.com/uk-pension-liabilities-grew-by-1trn-in-five-years/10023554.article

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16 hours ago, sandrabbit said:

Honda are cutting back on carbon based internal combustion automotive production and are making Japan their electrical production centre looking after Japanese workers, don't quote stuff like this which has nothing to do with Brexit but a huge re alignment of their business. Same with Ford at Bridgend, the workers knew the contracts for the manufacture of engines was coming to an end and new contracts might have come about if the switch to electrical propulsion hadn't occurred so fast. 

It is true that all the car manufacturers are in transition from petrol/diesel to electric and some hybrids.  It is true that that involves restructuring but the cars still need to be assembled and apart from the drive system they remain basically the same.   Car manufacturing is global and cars are built in many different countries.  The UK has been at the forefront of the automobile industry and Japan recognised that and saw Britain as a foothold in Europe.  BMW did say that they intended to build the electric Mini in the UK but have now said that they have to see what trade deal is agreed with the EU.. Time will tell but at the moment everything is in the air and will remain so until Britain agrees that trade deal.

 

As sure as eggs is eggs the government will blame the effects of the Corona Virus  for many of the upcoming problems with the economy.

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Posted (edited)
18 minutes ago, evadgib said:

We were still paying for WW2 until 2006 so what's new?

So when are you paying the debts for WWI? The UK hasn't even repaid the debts for WWI.

 

"And while the UK dutifully pays off its World War II debts, those from World War I remain resolutely unpaid. And are by no means trifling. In 1934, Britain owed the US $4.4bn of World War I debt (about £866m at 1934 exchange rates). Adjusted by the Retail Price Index, a typical measure of inflation, £866m would equate to £40bn now, and if adjusted by the growth of GDP, to about £225bn.

"We just sort of gave up around 1932 when the interwar economy was in turmoil, currencies were collapsing," says Prof Harrison."

 

http://news.bbc.co.uk/2/hi/uk_news/magazine/4757181.stm

 

How emergency war debts equate to an annual pension, social benefits, and NHS spending bonanza only you will know. You have to defend yourself. You don't have to give free handouts. Or maybe you do by now. Maybe if you don't the have-nots will rampage down the streets and take whatever they want.

Edited by Logosone
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1 hour ago, vinny41 said:

In our latest forecast, we estimate outturn spending on state pensions in 2017-18 to total £93.8 billion in Great Britain. We forecast spending to increase to £96.6 billion in 2018-19, with 12.7 million recipients paid an average of £7,610 each. That would represent around 12 per cent of total public spending, and 4.6 per cent of national income.

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/welfare-spending-state-pension/

Daaaa. Wrong answer.

 

Keep trying.

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47 minutes ago, Logosone said:

So when are you paying the debts for WWI? The UK hasn't even repaid the debts for WWI.

 

"And while the UK dutifully pays off its World War II debts, those from World War I remain resolutely unpaid. And are by no means trifling. In 1934, Britain owed the US $4.4bn of World War I debt (about £866m at 1934 exchange rates). Adjusted by the Retail Price Index, a typical measure of inflation, £866m would equate to £40bn now, and if adjusted by the growth of GDP, to about £225bn.

"We just sort of gave up around 1932 when the interwar economy was in turmoil, currencies were collapsing," says Prof Harrison."

 

http://news.bbc.co.uk/2/hi/uk_news/magazine/4757181.stm

 

How emergency war debts equate to an annual pension, social benefits, and NHS spending bonanza only you will know. You have to defend yourself. You don't have to give free handouts. Or maybe you do by now. Maybe if you don't the have-nots will rampage down the streets and take whatever they want.

All of which knocks your 'future generations' revelation(!) into a cocked hat.

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Posted (edited)
41 minutes ago, evadgib said:

All of which knocks your 'future generations' revelation(!) into a cocked hat.

No. You see unlike the US, which after the 1930s just forgave the UK its debt the creditors of the UK currently have no reason to be so lenient. 

 

Yes, the UK could simply refuse to pay back its debts, but nobody would then buy a UK government bond ever again.

 

And if you think 225 bn£ is a big sum, try  £1.78 trillion for size, which is the current UK government debt or thereabouts.

 

Now, just servicing this massive debt costs the UK 48 billion£ every year. Money the UK can't spend on its children, education or anything else sensible.

 

And what about the Greece scenario? What if the creditors of the UK just stop financing the mountain of debt because they think it's too large? It happens. Yes, the UK still has some room now, but for how long? The direction the UK keeps going is inexorably unilateral, only towards increasing its debt.

Edited by Logosone
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