Follow the real estate lord, let’s take a look at what news is worth paying attention to in the UK today:
- The British Ministry of Finance refused to change the "tax cut" policy and said it was asking government departments to try to save money to provide funds for tax cuts...
- New Prime Minister Tras hinted that the government would not change the tax cut strategy and insisted that the tax cuts outlined in the mini budget are the "correct plan" and the pound fell again...
- The Bank of England launched a 65 billion pound rescue plan to help pension funds get rid of bankruptcy risks...
- After the Bank of England intervened, the UK mortgage market was also boosted, and many institutions said there was hope. Quickly restore fixed interest rate loan products...
- British energy company recommends that people continue to pay attention to their energy bills in the near future. Before energy prices rise this Saturday, read and submit household natural gas and electricity meter readings to avoid paying more fees...
- Latest market survey shows that demand in the UK leasing industry remains strong, and the unbalanced supply and demand will continue to support rent...
[ UK Treasury refuses to change policy ]
British Treasury Minister Andrew Griffith said that despite the turmoil in the UK financial market and the Bank of England was forced to step in to rescue the market, the government would not give up its "mini budget."
Last week, the financial market has responded strongly, with the pound falling sharply, and rate hike is expected to increase by 4 times.
Outside questioned that the British government's tax cuts without funding will boost long-term inflation. Many people asked the government departments to find ways to reduce spending, and Labor called on Kwasi Kwarteng to give up tax cuts.
At the same time, the current situation in the UK has also attracted the attention of International Monetary Fund (IMF), which rarely publicly criticized the British government's tax cuts, warning that these measures may exacerbate the cost of living crisis.
After the IMF issued a warning, the pound fell.
Faced with the continued market turmoil, the Bank of England was forced to rescue the market and announced that it would immediately launch a "emergency" plan to purchase government bonds to help restore the "orderly market environment." The pound also rose slightly.
Because the outside world is not optimistic about the UK's economic outlook, the pound is still hovering at a low of 1.08.
However, in the face of various pressures, the British government has no plan to "turn around". Finance Minister Andrew Griffith said that the government's proposal is the "correct plan" to develop the British economy.
He claimed that "every major economy is dealing with the exact same problem" and said, "The Russian-Ukrainian crisis is having an impact through energy costs and other aspects, and the resulting supply impact."
Meanwhile, Griffith also confirmed that he is asking government departments to try to save money, asking them to "improve efficiency" to save money. These savings will help achieve growth goals.
[Tras insists that tax cuts are the right plan ]
In today's interview, The new British Prime Minister Tras also hinted that the government will not change its tax cut strategy and insisted that the tax cuts outlined in the mini budget are the "right plan."
It is reported that this is the first time since the mini budget was released, Tras has broken his silence and made public opinions.
Tras said her plan is to put the UK on a better track in the long run, but that situation will not improve overnight.
She said we must take urgent actions to promote economic growth and promote the development of the UK, while responding to inflation .
She also added that Although it means making controversial and difficult decisions, she is ready to do so as prime minister and will "do everything to achieve this."
Faced with doubts about whether the budget is fair, she reiterated that the government has taken decisive actions to help people pay for energy. And it is unfair to say that "the recession" or people "will not get high-paying jobs in the future" because "the tax burden in the UK is the highest in 70 years".
. Tras also responded to the impact of the mini budget on the financial market. She said: "We are facing a period of economic difficulties. I do not deny this. This is a global problem. But it is absolutely correct that the British government has intervened and taken action during this difficult period."
In addition, the media also said that Tras has ruled out the possibility of hiring the new financial officer, and also ruled out the possibility of making concessions to the financial crisis.
And as Tras' remarks were made public, the pound fell again in the early trading, with the exchange rate against the US dollar reaching 1.07.
[Bank of England launches a 65 billion pound rescue plan ]
Yesterday, the Bank of England announced that it would launch a "emergency rescue plan" to restore order in the financial market. At present, details of this plan have also surfaced...
Specifically, the Bank of England has launched a 165 billion pound bond purchase plan for html, and within one working day of the next 3html, purchase long-term bonds at a rate of up to 5 billion pounds a day within 1 working day (September 28 to October 14). Meanwhile, the central bank also suspended a plan to sell treasury bonds.
Bank of England said its decision to purchase government bonds was due to concerns about "significant risks to UK financial stability." It also stressed that it does not seek to reduce the cost of long-term government borrowing. Instead, it wants to buy time to prevent a vicious cycle to avoid mass sell-offs in the UK bond market and help pension funds escape bankruptcy risks.
It is well known that the government borrows money to fund its spending plans by selling bonds or treasury bonds to investors such as pension funds and large banks in the international market.
But due to the "mini budget" launched by the British government last week, there was a wave of large-scale selling in the UK bond market, which also led to the continuous lowering of bond prices.
Since the investment strategy of most pension funds in the UK is debt-driven investment (LDI), it is necessary to match long-term assets with liabilities, which also means that if the bond price continues to fall, the pension funds holding treasury bonds as assets will be insolvent.
In order to meet the future cash needs of creditors, pension funds will be forced to sell British Treasury bonds immediately to avoid the price continuing to decline, which will further lower the Treasury bond prices and cause a vicious cycle.
Outside analysis, BoE intervention is to avoid collapse-like selling in the bond market and prevent the vicious cycle from becoming more dangerous. Kerrin Rosenberg, CEO of
Cardano Investment, said: "Without today's intervention, Treasury bond yields could rise from 4.5% this morning to 7%-8%. In this case, about 90% of UK pension funds will run out of collateral and they will go bankrupt." Data from
Tradeweb shows that after the Bank of England intervened, Treasury bond yields fell (returns when prices rose).
Among them, the 30-year Treasury yield fell from a 20-year high of more than 5% earlier on Wednesday, down 1 percentage point to 4%, setting the largest single-day drop on record. The 10-year yield fell from 4.59% to 4.1%.
[ Mortgage loan market was boosted ]
After the Bank of England intervened, the UK mortgage market was also boosted. Several mortgage lenders said that the emergency bond purchase plan launched on Wednesday has ignited hope for a rapid recovery of fixed-rate loan products.
Due to pressure on the treasury market, major banks and construction associations in the UK have withdrawn multiple mortgage products in recent days. According to Moneyfacts, there were 935 housing loan products withdrawn from the market overnight on Tuesday alone, more than double the previous record set during the epidemic.
But after the Bank of England's intervention, Treasury bond prices rose, with the 30-year UK Treasury yield hitting the largest single-day yield drop on record. The Bank of England said it would continue to buy Treasury bonds until October 14.
Many lending institutions also welcomed this move, believing it will help stabilize the mortgage loan market. Industry insiders believe that it is the previous fluctuations in the financial market that have caused lenders to be unable to price products and have to suspend new transactions. Andrew Montlake, general manager of
Coreco, said that if the Bank of England's moves help stabilize the current turbulent financing market, it will give banks confidence to return with more products.
He added: "Lenders want to come back. They think it's a very short-term situation and they all plan to come back, some in a few days and some in a few weeks." Ray Boulger, broker of John Charcol, also said the intervention would "had a significant impact on stabilizing the market", adding: "I think it's definitely this weekend, and the lender will once again have enough confidence to determine the mortgage rate."
And according to a person familiar with the matter, Virgin Money is expected to provide a new mortgage by the end of the week.
[ Government recommends that people pay attention to energy bills ]
According to reports, British energy companies recommend that people continue to pay attention to their energy bills in recent days, and read and submit household gas and meter readings as much as possible before energy prices rise this Saturday to avoid paying more fees.
In the UK, people need to provide energy companies with their own gas and meter degrees, otherwise energy companies will estimate a usage based on their previous usage.
Energy company said that if you don't submit it as soon as possible, energy companies may charge higher fees for energy used before October 1.
Starting from October, the average annual energy price cap for UK households will rise from the current £1,971 to £2,500, an increase of 27%.
Previously, the UK government announced that it would freeze the energy price ceiling until 2024 to limit the soaring energy costs.
This means that the energy costs of a medium-sized household (a household that uses an average of 12,000 kWh of natural gas and 2,900 kWh of electricity per year) usually do not exceed £2,500.
However, although the government has frozen the price limit, this determines the cost per unit of energy, and the specific cost must be calculated based on the energy consumption of each household. This also means that if you use more natural gas or electricity, you will pay more.
As shown in the figure below: The energy cost of different types of houses is estimated to be
In this regard, Energy UK said that it is best for everyone to submit meter reading data before October 1. And, most vendors allow people to send their readings within a few days around that date to avoid overpaying.
Also, starting in October, every household in the UK will receive a discount of £400 in energy expenses. The money will be paid directly to the customer's energy account in installments within the next 6 months.
[ Lease market demand has steadily increased ]
Propertymark's latest market survey shows that UK leasing industry demand remains strong .
According to the survey, in August, the average number of new tenants registered by each branch of Propertymark reached a new peak of 141 people, 188% higher than in December last year.
But at the same time, there are an average of 10.9 properties available for rent per branch, and the supply of rental housing has not increased in the past three months.
Propertymark said that the continued imbalance between supply and demand means that rental pressure will rise further. Three-quarters of its branches reported a month-on-month increase in rental prices in August.
In addition, the data also shows that new prospective tenant registrations for various institutions have also increased slightly. Propertymark believes that this indicates that the market boom in the fall is earlier than before.
or above is our daily content report today. Please continue to pay attention to Real Estate Jun. We will continue to bring you the latest and most informative UK reports.
