It'll be a laugh, go along, bring a bottle.
Pound at all time low? Well that was a lot of fuss about nothing...
- Thread starter Mottie
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It'll be a laugh, go along, bring a bottle.
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Truss/Kwarteng have signalled they want higher interest rates aka 'mortgage tax'. They seem to believe it will destroy the 'zombie' companies and free up their resources for use by 'sound' companies.
No-one I've spoken to about their plans can see any way of it working.
Many will be facing higher mortgage payments in the short term at least.
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YOu make it sound like they chage interest rates in order to tax people as that's what they want.
Eh?
and how does your zombie co going bust free up resources for a different co?
Eh?
and how does your zombie co going bust free up resources for a different co?
It doesn't but 'zombie' companies are a problem, both here and even more so in mainland Europe. I assume because of their effect on growth figures.
Was anyone foolish enough to believe those low rates would be around forever.
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That's exactly what it is.
Higher interest rates means (among other things) higher mortgage payments for lots of people. That means many people have less money to spend aka destroying demand. Lower demand makes people unemployed.
Zombie companies employ people. When they go bust those people are freed up to be employed elsewhere. That's their plan anyway.
Set the Base Rate at zero and leave it there. Forever. Let the private sector sort the rest out.
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You're saying that if a company is struggling, that's part of someone's plan?
Whose plan?
Is there anyone who agrees with you?
You're saying interests rates are put up to tax people, the? Please find someone else who's saying that.
That's not a tax, though.
Sound companies rely on buggered companies for their staff, do they?
I'm expecting one well known member to brag about exchanging millions of dollars in pounds and now changing them again to make more millions...
LOL I thought it might be according to you. Perhaps a precise definition would help. The Japanese example is interesting and why.
Zombie company - Wikipedia
When things like this are mentioned provide some examples.
Going on earlier comments before current "problems" the difficulty is getting away from them. 2% was mentioned which "oddly" matches what some see as ideal inflation levels which don't really account for all living costs. A 2% rate is historically rather low.
LOL I thought it might be according to you. Perhaps a precise definition would help. The Japanese example is interesting and why.
Zombie company - Wikipedia
en.wikipedia.org
Not according to me, just stuff I read,
'Zombie' companies eating away at economic growth
What effect are so-called zombie companies having on the UK economy? Chief economics correspondent Hugh Pym investigates.
www.bbc.co.uk
It seems to be a growing problem, it seems to be a bigger problem in Europe, don't know why.
I've read that 5% is the 'comfortable' level, but even that is going to be painful for anyone who's had a mortgage obtained in recent years.
This states the problem as well, from your 2nd link
A Bank of America report from July posits that the UK accounts for a staggering one third of all zombie companies in Europe. They represent 20% of all companies in the U.K, up four percentage points since March, according to a new paper by the conservative think tank Onward. In the two hardest-hit sectors — accommodation and food services, and arts, entertainment and recreation — the proportion of zombie firms has soared by 9 and 11 percentage points respectively, to 23% and 26%.
Both reports are according to some one or the other though and the areas mentioned are of a certain type.
When mortgages have changed due to rate increases previously some land lords have run into grief. Much earlier during Mrs T's high rates we just carried on paying and never reduced the payments when we could have. That wont be so easy for more now despite higher deposits. Some finish up with negative equity. My brother would have done if he had bought ~2 years later when there was a fairly minor hiccup. He later bought one interest only. When the end came he found a number of things had to be corrected on the house. Mostly modern changes to the rules that his survey didn't bring up. One factor was loft rooms.
Ive slept in them. Rather posh but.... The changes he made allowed him to get the max price on the house leaving him more for another. Pretty posh detached to a semi.A relevant paper by Sage but applies to any Societal crises
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Sunak will be smug. As they said on Have I Got News For you when they replayed a clip of his - "it was almost like he knew what he was talking about".
No currencly shuffling here.
I've recently sold 2 props, and I don't think it's a good time to rebuy. WHo knows where prices will go for the next gawd knows how long. US stocks are in a dip and likely to exceed the still measly interest rates in the next few months and have the advantage of being "not sterling". But the prices at start of the year were ridiculously high though. Pick your shade of tulip. I'll "stick" for now.
No currencly shuffling here.
I've recently sold 2 props, and I don't think it's a good time to rebuy. WHo knows where prices will go for the next gawd knows how long. US stocks are in a dip and likely to exceed the still measly interest rates in the next few months and have the advantage of being "not sterling". But the prices at start of the year were ridiculously high though. Pick your shade of tulip. I'll "stick" for now.
It seems to be a bigger problem in the UK.
One in five UK businesses now ‘zombie companies’, study reveals
One in five UK businesses now ‘zombie companies’, study reveals
The proportion of ‘zombie companies’ in the UK has risen to 20 per cent since the start of the coronavirus pandemic, a major study has revealed.
www.grunberg.co.uk
It does, although I maintain I did read some years back that it was a much bigger problem in Europe. Things change over time I suppose.
believe it or not I read on here a few weeks ago that UK had the highest inflation in Europe.
Why are you crowing about that?
The rate on 22/06/2016 was $1.46....
How many hundreds of billions has it cost to keep it above parity since then?
Makes that £8bn a year to stay in the EU seem like an absolute bargain!
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