UK economy shrinking

Why?

Bank of England target rate for inflation is 2% - therefore 4% gives a reasonable real rate of return for bank deposits.

0% inflation is an ideal but not particularly desired.  If inflation is too low then, given our economy is built on consumer spending, people may put off from spending because they expect prices to fall.

Well the negative equity was Maggie’s Brilliant (in reality asshole) Chancellors doing.

I was there and saw it first hand

I bought and sold a house in less than 24 hours because I saw what was coming.

Lawson stood up and declared that he was going to destroy dual income mortgage interest relief at source for unmarried couples. The issue was that married couples like Moira and I were only allowed tax relief on the first 25,000 (later £30000) of our mortgage.

The fact that this MIRAS business had such a huge impact was clear from the fact that a week after the MIRAS threshold was raised to £30,000, the two no and a half bed terraced houses priced at £24,850 when I bought one when MIRAS covered only £25k rose overnight to £29,995

Which was instrumental in getting me £31,000 when I sold the house I’d bought for £24850 five years earlier. Property prices had hardly budged in the five years in question in Newport, and suddenly when the chancellor hands you another £5000 of tax relief, the price of the house rises to meet the new limit

Nothing fishy there

But Lawson was about to superlatively screw all of us

The thing was, a “couple” living in sin were allowed to claim 30% tax relief on £30,000 EACH so their £60,000 mortgage would be about 15% cheaper than mine. And mortgage rates those days were between 8 and 17%

So Lawson decided to level the playing field by terminating dual income MIRAS

Not at 6pm or when he sat down like fuel and booze and fags changes

No. In SIX MONTHS TIME

The day he said this I was about to view a house valued at £39,000.

I agreed a sale of my own subject to contract at 9:30 am, viewed the one we wanted at 1pm and completed contracts on both sales by 5pm

I did so by obtaining insurance policies costing about £500 each which guaranteed to pay up if the search found something shitty being developed, and by taking the surveyor to the house I was buying and offering cash for his survey right there

I did this because I knew things were going to go ape

And they did

The value of my £39,000 house on which I had just completed rise to £55,999 by the day I moved in not because it had appreciated but because fanatical unmarried couples were rushing round trying to buy a house before the curtain fell on the dual relief

On the day before the axe fell, six estate agents knocked my door offering me valuations of £89,900 if I agreed to move now. At six on an arse in red braces screamed to a halt in the street and nearly bashed down my door offering me a suitcase of money to sell him my house there and then. It was insane

And then the window closed and the valuation on my home tank d from £89,900 to £49,900

And the world fell into negative equity

I certainly agree with the idea of "Trickle Up Economics". But we have to accept that cutting taxes means more borrowing or cuts in services and that was caused the markets to reject Trussonomics.

I don't know what the opinion of Johnson paying everyone is sit at home twiddling their thumbs is on here, but we are now having to pay for this borrowing and so the government doesn't have the options it once had to help people with their bills today. I am more of the opinion we should adopt the Nordic model and that means higher taxes. Certain higher taxes for the very rich in any case.

Given we are on the verge of a recession I'm still trying to understand the logic of increasing Business taxation by 30% - do people really think that is going to increase investment and attract business to the UK..