I have no idea what it means when the Bank of England raise interest rates

:grinning:

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Me neither mate and it is 100% going to affect my life in a negative way this time around too

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*6%

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These lads love getting high off inflation might as well call it the Bants Of Pingerland!!!

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Oh yeah, sorry:

Me neither mate and it is 100% going to affect my life in a 6% way this time around too

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Seriously though we’re fucked.

How does it affect the dis servers?

Well they ain’t raising my interest rates! I couldn’t give a toss about the Bank of England!

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The only upside of this is that The Tories produced their own political suicide note with their mini budget/major fuck up.

Their own explainer is surprisingly user friendly

People keep voting for them.
Wouldn’t be surprised if Tories don’t win the next election sadly.

They also have this less user friendly but more detailed explanation of how money works that is good and talks about the bank of england base rate

I reckoned the energy crisis was hammer the dis server costs but so far no sudden 404

In short, had you made this thread last year it would have got fewer replies.

This is a very inexpert take on the whole thing, to be taken with a pinch of cynicism as I only vaguely know what i’m talking about. It’s also depressing AF so feel free to move on without reading.

Summary

I think the very basic idea is that the pound is becoming worthless, and so “the markets” will want to sell it off ASAP which further devalues it. They raise the interest rate in part to encourage holding onto and saving your pounds and to halt the currency collapse (“Don’t go! Look, I can give you a few extra % back if you stay”).

It means that holding onto your money and not spending it becomes incentivised, which slows down spending and likely leads to (or further deepens) a recession. People are more likely to hold what little they have and less likely to spend on luxury items. This would be further exacerbated by the fact that the exchange rate drop and energy crisis means that the goods you need to survive on a basic level eat up all your money anyway, so entire industries that previously relied on disposable income are looking fucked(er).

It also means taking out a bank loan becomes much more difficult and precarious, which can stifle new businesses being started and makes it much more difficult for the businesses already hit by lower consumer spending to take out bank loans to save themselves, which results in businesses shutting down, redundancies, increased unemployment, and etc.

So if you have enough money to save (and to keep it saved while your living costs spiral), then good for you. If not, you probably only really see the bad effects of it as all the independent and precarious businesses that afforded you just enough luxury to feel alive go under, and the ones that survive do so by hiking their prices and generally everybody needs to squeeze more out of consumers by raising prices, dropping quality, both, etc…

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Got a letter last week from British Gas saying tht my balance is outstanding.

To be fair, I have been practising but it’s lovely that someone noticed.

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