scottbeard

I just took out a 5 year fixed rate of 4.2% I take the view that this is an absolute steal - with current BASE rates at 5.25% even if they do come down a bit as a 5 year average MORTGAGE rate I think that will prove very good Base rates would have to average lower than 3.75% over the 5 years to make it a bad deal and I can’t see them going below 4.5% in the near future never mind so far below 3.75% as to make the 5 year average below 3.75

I'm not actually sure how your accounting manipulation example translates to what you think could be happening here. Either the ONS have a process for applying the data into their calculations and they follow it, or they don't. If you believe the ONS do ANYTHING other than follow their published policies then the figures are unreliable. Of course, even if they follow their published policies that doesn't mean the figures are RIGHT it just means that they will be consistently calculated. As has already been noted on this thread, these figures are subject to effects such as the incidence of bank holidays inflating one year and/or supressing another. But MANIPULATION implies someone doing something deliberately inconsistent to impact the overall outcome. And let me say again - if you are China or North Korea you don't do subtle manipulations like that, you just overtype the answer with what you are told the government want to publish. It used to be the case in the UK that the government got early sight of statistics from the ONS, and then could apply pressure to the ONS to change them before publication. Happily now the government get the figures basically at the same time as the public, so this avenue of pressure for manipulation is removed.

I guess different people will have different views on this, but to me there is a huge difference between how a number is calculated and how it is presented. If the number is calculated in line with the published methodology, but spin is put on that by the Chancellor (for example) on the radio then the user can form their own view on whether 0.4% is good or bad and ignore the spin. But what a user cannot do is calculate their own equivalent of the +0.4%. If the PM can simply ring up the ONS and tell them what number to publish (which I'm sure in China and North Korea etc is basically what happens) then the figure published today of +0.4% would be of absolutely no value at all, and no reliance should be placed upon it, and it's impossible to know what the true number is.

Oh and as for manipulation...it's a bit sad how many people on HPC cling to the idea that every number that they didn't expect must be manipulated. As a clue - the governments around the world who manipulate statistics would NEVER allow something so stupid as declaring a recession when they'd promised growth, having an election at which they are decimated, and then the following week reveal good news statistics. This rebound on the other hand, far from being manipulated, was anticipated by actual clever people who study the real world way ahead of time:

The 2024 election was lost for the Tories by Liz Truss in 2022. There is NO WAY that the Tories can win now, it simply can't happen.

I don't really think that's the case. Firstly interest rates were absurdly high in the 1970s by historical standards, and it was really a one-off to deal with inflation that resulted when the gold window finally closed and the oil crisis occurred. Following that they returned to a fairly normal range for most of the 90s/00s. Then in 2008/9 the got cut to zero, where they were held for ages. Now they are back to normal again. The types of final salary scheme that most boomers have pensions in would have had very few bonds until the mid 2000s - 80% Equity 20% Bond was typical. They did then buy a lot, which is one reason why index-linked yields fell a lot for sure. But most schemes are not big sellers of bonds at the moment. Finally, a large number of boomers have public sector pensions that are not funded at all: Teachers, NHS etc. They have no investments backing them at all, bonds or otherwise.

Agreed that's a massive problem, and that GDP per capita is a much better figure to focus on. I just wanted to also point out that today's figure is still good news, even if it comes on the back of decades of mismanagement.

That's very true. On the flip side growth is still better than recession.

Yes, economic growth is great news. Energy is not cheap - at least compares to pre-Ukraine war. Wage growth implies inflation and interest rate increases, not cuts. This seems a bit confused. It still might be an excellent year though! It just can't have all of the things listed.

Your maths is wrong - the oldest possible boomer is still only 78. These are words I would apply to THEIR parents - my grandparents. Not boomers. When I was a small child, yes - but that's because raising children is expensive, and they were in their 30s and less well off them. Once they hit about 50 it was just a constant stream of trips abroad and parties, which they are only now winding down on as they get into their late 70s. We had fish and chips every Saturday, and my Dad knows absolutely nothing about cars or house repairs so never did either. Maybe it's a middle class v working class thing, but this is just not my experience of being a child with boomer parents.

It's not impossible for a single month or something - could the April CPI be 1.9%, well yes it could. But the idea of sustained inflation below target for the next 2 years, I don't think so, and Andrew Bailey seems unconvinced too at the moment, hence no cut.

Ah OK - well they are certainly overvalued in a way the UK is not. Whether as much as 90% though - I think not. Still it gets his name in clickbait to bandy around large numbers, and as long as he writes an article a month quoting every % from 10% to 90% then when there's the next inevitable crash he can point to the one of his library of predictions that was right and claim he "called it". Agreed. The sky DID fall in in 2008 of course, but 2006-7 was a such a different time now to then: 125% self-certified mortgages, retail banks and "casino" investment banks chained together so one sinking took down the other, house prices tripling in a decade....it really wasn't very much like 2024 at all.

Yep indeed. And within an hour or so of me posting it... Tony's latest weekly on the same topic is here! And yes I do realise I'm being arrogant and flippant about a serious issue - but literally there is a thread a fortnight on it, each predicting imminent doom ... but this has been the case for at least 2-3 years now.

This is very, VERY common. There is a non trivial proportion of the country who think that the only reason interest rates now are 5% and not 2% is 100% down to Liz Truss. It's a major factor in why the Tories will lose the election. And of course is completely wrong.

I'd absolutely agree with him. However, where I suspect we would disagree is that I'd expect such an event to be many decades away, and most likely well beyond the lifespan of most people reading this forum today. 2007/8 happened essentially because people had forgotten the lessons of 1929/30. Bank runs were something from the history books. etc etc However, right now almost everyone in charge of everything lived though 2007/8. They don't even have to hear tales of it from former employees or their parents - if you're a CEO or Prime Minister aged 45-65 today you were aged 28-48 in 2007/8 so were already at work and living through it. A 90% drop in the stockmarket makes absolutely no sense to me at all. That would be the FTSE 100 falling from 8,300 to 830 i.e. less than the 1,000 it started at IN NOMINAL TERMS since 1984. What complete nonsense. However, the amount of debt around is very real, and will undoubtedly act as a big drag on growth (if it's paid back) or loss of wealth (if it's defaulted). But i think the place to watch this time is GOVERNMENTS not banks or the stockmarket, and by extension anything the government spends money on or has promised to do so.