old.sparkles

Thanks RM

Bud the Wiser

From todays Guardian.........

http://www.theguardian.com/business/...rise-inflation

Whichever way one looks at it, or tries to disguise it, there is a general trend towards a lower standard of living adjustment for many people. This maybe offset in some quarters by lower interest rates, but eventually even that bubble will burst.

BTW, a reduction in unemployment does not necessarily mean a rise in production or tax revenue.

Giantaxe

I don't see low interest rates as a bubble as they are bounded. But it is true that interest rates will eventually rise and those that have overextended themselves will get burnt.

For anyone with a mortgage, low interest rates have been a boon. I know UK mortgage rates tend to more variable than in the US, but here my mortgage is fixed under 3% for the life of the loan.

It may not, but as GDP is growing and a record number of people are in employment it likely does.

Bud the Wiser

I agree low interest rates have helped many people through difficult times. The question is, is the extra income being taken up by the increase price in commodities and other inflationary pressures or are they paying down their debt? Some no doubt, are using it to continue a life style they can ill afford should interest rates rise.

Lower interest rates, easy credit, help to buy etc. are all inflationary in the long term surely.

It would be interesting to see a graph of increased tax revenues and unemployment figures from different years and see how they compare to todays numbers.

Interesting article PM'd me by another forum member about how the ' UK's fiscal woes are kept hidden."

http://www.telegraph.co.uk/finance/c...pt-hidden.html

Evolve2013

I hope I can re-assure you. Like yourself, my husband was the driving force in our move to NZ in 2004. As much as I loved the scenery I forever found myself repeating, beautiful, but just isn't home and i felt I lived in limbo for eight years until we returned home Feb 2012. Yes, people told us we were mad particularly the ones who had come on holiday (oh how different it is to holiday and to actually live!!!) I just knew (or hoped) I would never grow old there. We returned home with a 11 and 13 year old. Both have settled very well and are enjoying all the UK has to offer and enjoy the education here. Both my husband and I have jobs and we are loving being home. I hate the way people talk the UK down, we really don't realise how lucky we are in this country. I can honestly say we have no regrets whatsoever. Good luck with your decision

davros1984

Hi Evolve - I'll PM you.

Its lovely to read what you've written. Ultimately it is what you make it, but you are constrained in a country by the cost of various things, especially salaries to the cost of houses.

We are in NZ and are planning on moving back to the UK next year as no matter what we earn in Auckland we will never be able to buy a house or effectively "settle" here.

You are right though, there is so much choice in the UK and in comparison to NZ, the UK is an incredibly affordable place to live, but I think we all have to accept that things now will not be as easy or as straight forward as they were for my parents and their parents generation in terms of housing affordability. I am 29 and know my first mortgage will be at least 150K GBP. For my parents, their first 3-bed house was 15K GBP. in the 1980's.

TheEmperorIsNaked

Look, it HAS to be said: I can't speak for NZ but I can for Australia. It is the same here.
It is nothing like as easy as it used to be.
Housing is less affordable, rental is exorbitant, the cost of living is way up, employment is difficult for many.

Though the subject is about the UK I simply point out that it is all comparative. The problems there are occurring practically everywhere.

For the life of me I cannot understand why this goes on and on. Isn't it glaringly apparent that there is good and bad in all countries? That if you have employment, it's easier. If you don't it's not.
If you live in a lower socio economic area it's more difficult, and if you don't...etc.

chris955

Some feel it is almost their duty to talk the UK down, it seems to come easy for them. I would hate to be almost permanently negative, it would get me down.
As you say generally Brits really dont know how lucky they are. Like you we have absolutely no regrets whatsoever although I have been told on here that I am overly positive and enthusiastic to hide the fact that I have doubts

roaringmouse

So would I.
Indeed, this is becoming quite a serious issue for many people. One organisation is finding the numbers relying on food banks has tripled in a year.

It also doesn't help that power companies have been increasing their prices so much - e.g. British Gas increasing gas by 8.4% and electricity by 10.4%, and SSE announced a similarly large increase with probably more to come like that from other suppliers.

not2old

chris, are you implying its only in your own little world, or could it be 'I'm all right Jack'

Its a recession when my neighbour tells me that he has lost his job - a depression when I lose my job

chris955

Neither.

chris955

Again exactly right. If all this stuff was only happening here I would probably say yes thins are that bad but as you say it is all occuring in countries like Australia as well. I was reading an article a few days ago about first home buyers being totally unable to get on the ladder. Huge rises in electricity and gas prices, electricity in Queensland jumped 22% this year alone and similar in other States.

Pistolpete2

It's good to see the conversation moving towards the things that really matter, IMHO.

The employment numbers released this week are clearly positive in that there are an increasing number of uneconomically active who are going straight into the ranks of the employed. On top of this, the number on job-seekers allowance is coming down substantially over time.

The problem is that the jobs that are going are at lower pay-scales and as dunroving has pointed out, those in employment are being constantly squeezed by pay rises well below the rate of inflation. Those slightly higher up the totem pole are also being squeezed by taxes that come in at lower thresholds.

Again, as has been pointed out, a large number of the new employeds are hardly likely to be paying any meaningful tax at all because of the nature of the average job opportunity and this against a back-drop of companies finding ever-subtler ways to pay less tax as well a la Google, Apple, Amazon, Starbucks, Barclays, means the 100 odd billion pound annual deficit is going to take a super-human effort to get down anytime soon.

Note that a Chinese rating agency downgraded US debt today, which caused the dollar to dive and interest rates on US debt to rise. Of course this is about political stalemate and credibility (I'm being polite) as well as handling the debt ceiling but translate this to the UK and down the road have the market question the ability of the UK to pay its - ever increasing, barely sustainable - debts and you can see where this is leading.

Indeed in the short-run, UK interest rates remain good and low - thank you!? quantitative easing and poor growth prospects up to now - and this is helping consumers and the housing market and of course the UK Government through cheaper sovereign debt financing costs but just as in the US, questions are indeed going to be asked about the UK's ability to pay its debts if the annual deficit stays where it is and then we will be looking well beyond short term unemployment numbers to a full-blown debt crisis of 'our' (yep I plan to return next August 1st) own.

Right now, the UK OBR forecasts call for a big improvement in the annual budget deficit by 2017-18 - the 'football' has been kicked several years down the road - but we all know very well by now that forecasts get re-written all the time. What nobody seems to notice, or rather wants to talk about, is that there is only a forecast of a lowering of the deficit but nowhere on the horizon is it envisaged there will be any making of inroads into that debt which BTW does not include State Pension for an ever-aging population or the private finance initiative (PFI) rip-off liability numbers which are so cleverly?? kept off the books.

The silver lining to this story is the position of the UK relative to other nations in a similar debt predicament. Japan is a debt story all on its own with a declining population and almost zero inwards migration but which seems to be able to weather it without bringing the whole deck of cards down. Only yesterday the FT made mention of the relatively young and growing UK workforce* and immigration** standing it in good stead relative even to Germany where there is also a low birth rate.

*It would be nice if they had a better chance of finding a job

**Inwards migration of skilled labour in their twenties where they then prosper and return 'home' at or near retirement age is considered particularly favourable to the UK Treasury

Bud the Wiser

A related article on the cost of living and UK taxes.

http://www.telegraph.co.uk/finance/c...the-taxes.html

This led me to look at when the UK tax free day is. The latest figure I could find was June 1st ( 2010 data ) @ 40.9 %. Difficult to compare this with other countries as they use different ways of collating the information, but for a rough comparison the USA came in at 26.9%. A difference of 14%. Considering what the UK provides in terms of NHS and a social safety net, on the face of it, it's not a bad deal. I can't find any recent figures.

Also relative to the article, in terms of changing the tax code(s), I'm a big fan of the Fairtax. ( www.fairtax.org ). I've read both the books and can only surmise that it's not given consideration by the majority of politicians is because they want to make the tax code complicated in order to bring in as much money as possible without the general population being aware of how much they contribute through stealth taxes.

Bud the Wiser

Congrats on setting a date for your return. Hope it all goes smoothly.

My own return date seems to be getting further and further away, for a variety of reasons.