I’m going to be 5.5% worse off this year than last year, as food prices rise again sharply and yet I do not benefit at all from the mortgage drop which has helped many people, as I don’t have a house or mortgage, but rent. Rents of course remains static so far…
So the richer part of society gets bailed out, the poorest pay.
As always…
People with significant savings could end up even worse off – this really just benefits middle class home owners and those with huge personal debts and really screws those of us without significant personal debt or property, but no money.
Added to which people all around me are losing their jobs. Seriously, I am not impressed one bit!
If food prices had fallen, it would have been OK http://news.bbc.co.uk/1/hi/business/7959564.stm
Will you be better off or worse off? Find out here with the BBC Personal Inflation Calculator
http://news.bbc.co.uk/1/hi/business/7669072.stm
I feel particularly for the poor sods, with or without mortgages, with large families. 😦
What is really interesting so far is how much the Credit Crunch, which by wiping out billions in share prices and investments and hurting millions of unfortunate investors would have narrowed the gap between the rich and poor, has instead now owing to government intervention done no such thing, but seen another increase in wealth of home owners while those in rental, almost all the poorer elements of society, take another kicking. Wow! And I voted New Labour! (Well I’m still not voting Conservative yet – colour me Lib Dem for the foreseeable, unless New Labour actually have an ace up their sleeve and plan to do something about this… )
Anyway do comment on how all this will effect you. And good luck, whatever your position! I think we may all need it…
cj x
"And sometimes he's so nameless" 
Statement A: “the rich get bailed out, the poorest pay”.
Statement B, two lines later: “those with significant savings will be worse off, those with huge debts will benefit”.
Does this mean that having huge debts now counts as beng rich, while having significant savings counts as being poor? It’s the economics of paradox! 😉
If we think it is bad now, wait till the bailout bills come do. The problem is we should have let the companies fail and then used tax money to deal with massive unemployment.
Over here the government is now complaining of what the companies are doing with their bailout money. Some gave bonuses and some bought jets. But, that is what large corporations do. What did they expect?
Hey Mo,
Yep. 🙂 Allow me to explain what I mean! If you have never had any debt or HP agreements or overdrafts, then obviously you are a poor credit risk. If you happen to be Danish, Canadian, American, French or whatever you also may find that your Credit Rating from your home country does not count for anything here. I got to my mid thirties without any loans etc, and one day realized I was stuffed. Building up a credit rating was now extremely difficult — so every day for me is a Credit Crunch, because banks won’t look at me. I have a perfectly good current and savings account, and a £200 overdraft limit now, but it took a decade to get that. However if I ever want to start a business/buy a house/get a car on finance — well it is VERY hard for me. I just lack the paper trail.
Now an awful lot of people have always been in this situation — immigrants, the long term unemployed, people who have got in to a financial mess and got CCJ’s – the law actually seems kinder to discharged bankrupts — I have no idea what percentage. It may not sound like a problem…
What it means however is that if you want to do anything you have to have the money saved, which if you are as poor as me is doubtful. Insurance becomes vital, and to go away in November means starting to save now, because you can’t borrow the deposit from teh bank and pay it back.
SO there are two distinct groups of people in the UK – the wealthy – who often owe huge amounts, with mortgages, personal loans, and HP agreements on cars etc – and the poor – who owe very little indeed (compare the average 35 year old homeowner and 35 year old who rents – the homeowner will probably have ten times the personal debt.
So in our society for the last twenty years, the rich have been the indebted, and the poor those without debt? 🙂 I’d say that was the Economics of Paradox, and while it may not be apparent to those who have not spent over a decade below the breadline, those of us who have understand it all too well. 😦 Sadly the credit crunch has now brought home the absolute importance of the flow of money to everyone – and ironically it was partly caused, in the USA at least, by well intentioned attempts to help the poorest elements who could not get credit. Sadly many showed exactly why the banks did not want to give them credit by defaulting, and now here we are in a horrid mess, which benefits no one. I’m no fan of trickle down economics (I regard the supposed benefits as a myth), but it may be better than everyone being stuffed. 😦
cj x
Hi Murray,
Yeah — I have no idea what would have happened if we’d let them just collapse. Lehmann Bros should have been bailed out according to some, but other disagree, and I must admit my gut instinct was let it all go, and see what happens.
My tile is a reflection of the anger felt by many in working class communities in Britain, as market forces were allowed to almost destroy the Coal, Steel and many other primary industries in Britain in the age of Thatcher, and whole communities became desperately poor for a decade, with huge unemployment. These people are therefore extremely unhappy about bank bail outs and especially when they read headlines about said jet purchases, foreign junkets and massive bonus/pension pay outs. Still, we are not seeing any great class war here — everyone is equally fed up I think, from Daily Mail readers to the poorest.
I think the governments attempt to encourage spending by cutting interest rates, guaranteeing savings and providing vastly improved state mortgage protection have actually been worthwhile and useful – I’m not so sure about bank bail outs, but I’m guessing the people who did it know what they are doing and had info I don’t. I hope so! My argument is that all these things have a) driven up inflation (excluding mortgages and loan repayments) and b) hence increased the gap between the haves and have not…
😦
And as the Credit Crunch will drive many more in tot he Credit – Unable poor, well…
cj x
When I said no sign of class war I spoke too soon it seems – http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/7962825.stm – Fred the Shred I guess? I actually feel a bit sorry for him, but I think I may be alone in this. I still don’t see much evidence of turmoil in the streets, or people taking up Motorhead’s “Eat the Rich” yet! http://www.youtube.com/watch?v=h45WnW0ASFY
cj x
And again the news has proven me wrong – rents are falling it seems
http://news.bbc.co.uk/1/hi/business/7963271.stm
Of course unless you move house this is not going to make much difference, as your landlord is not going to reduce the rent in a house you live in. My rent has been static for over a year now.
The biggest single factor I think in setting rental prices is if there is a university in your town. Students suck up huge amounts of rental accommodation and force prices sky high.I have already noted that Derby is VERY cheap compared with Cheltenham, and so oddly enough is Bury St Edmunds, where house prices are astronomical. However – rent falls have a very real and simple bottom – most people letting have to pay the mortgage, and technically a commercial mortgage not a residential one unless they live in the property – which is far more expensive. Sure the cuts in interest rates might drive rents down, and pass on the benefits – and if the average rent realy is down nearly two hundred quid I might believe it – but I remain to be convinced.
Great news though, as always I’m glad ot be proved wrong!
cj x
Well Chris I tend to agree with many of your points and I particularly agree that the banks should have been allowed to fail. Surely that is the whole point of free market capitalism.
I had also considered the rich being the indebted ones, I believe it is called leverage. How ever I suspect the reason you gained no leverage was a serious aversion to work, rather than accuring debt 🙂
lol! Good to hear from you mate. You found my blog then? I noticed Axel found it as well – just need DTM now!
I keep meaning to blog on why I think the current UK crisis occurred — but of course never have time. Off ghosthunting this weekend, who says I never work hey? :)Not working at all tonight though – off to a quiz night at The Cotswolds run by one councillor and I’m attending with another council type. Hell, at this rate I could become respectable!