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Mini Budget - Immediate Effects on Precious Metal Prices and Pound Sterling Exchange Rate


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Mini Budget - Immediate Effects on Precious Metal Prices and Pound Sterling Exchange Rate

I have just read on BBC News:

Summary

  1. In a massive shake-up of the UK's finances, Chancellor Kwasi Kwarteng has outlined a series of tax cuts and economic measures he says will boost growth
  2. It's the biggest tax-cutting event since 1972, the director of the Institute for Fiscal Studies says
  3. The basic rate of income tax has been cut to 19p and the 45% top rate of tax for higher earners abolished - although this doesn't apply in Scotland
  4. The threshold before stamp duty is paid in England and Northern Ireland has been raised to £250,000 - for first time buyers it's £425,000
  5. The cap on bankers' bonuses has been lifted, and a planned rise in corporation tax has been scrapped
  6. An increase in National Insurance has been reversed, and low-tax investment zones will be set up across the UK
  7. Labour's shadow chancellor said it was a plan "to reward the already wealthy" and would not help those struggling most with rising prices

I instantly realised this was likely to push the pound down on foreign exchange markets, which it has, currenlty £ = 1.1057

This would also have a corresponding effect on gold and silver prices:

Sure enough, gold £1492, but now about £1489. It could wobble to £1500+.

Silver relatively unchanged at £17.29

It will be interesting to see where all three of the above prices (GBP, AU, and AG) go in the next few days and weeks.

😎

 

 

Chards

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+ no VAT for foreign buyers (limited quantities on precious metals) and cuts to dividend taxes (not huge but they're there!)

Gov Website says, VAT free on gold or silver under 125g, 2.75 troy ounces or 10 tolas. Not much silver value, gold coins are not VAT'd so more for jewellery buyers! 

https://www.gov.uk/tax-on-shopping/taxfree-shopping

 

 

Edited by harrygill111

 

 

 

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1 minute ago, harrygill111 said:

You cannot get a VAT refund for:

 

  • gold or silver over 125g, 2.75 troy ounces or 10 tolas
  • a boat you plan to sail to a destination outside the UK or the EU

Damn! My master-plan is foiled!

Interesting that they've put PMs and Boats beside eachother in the bullet list... :) 

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13 minutes ago, Darr3nG said:

You cannot get a VAT refund for:

 

  • gold or silver over 125g, 2.75 troy ounces or 10 tolas
  • a boat you plan to sail to a destination outside the UK or the EU

Damn! My master-plan is foiled!

Interesting that they've put PMs and Boats beside eachother in the bullet list... :) 

 

Shame about that hovercraft accident I had the other year.

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If that is a mini budget I'd like to see what they're going to do in a full budget 😀

Pretty sure it isn't going to change much except for adding a bit of fire to inflation, interest rates will still be going up and we will still be in a recession for 12-18 months.

Nothing wrong with holding or buying a little more gold at the moment that's for sure, mind you that's probably the case 99% of the time anyway 😀

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5 minutes ago, GoldStatue said:

If that is a mini budget I'd like to see what they're going to do in a full budget 😀

Pretty sure it isn't going to change much except for adding a bit of fire to inflation, interest rates will still be going up and we will still be in a recession for 12-18 months.

Nothing wrong with holding or buying a little more gold at the moment that's for sure, mind you that's probably the case 99% of the time anyway 😀

 

Agree, I dont see interest rates coming down anytime soon, maybe in 2024. Doesnt matter anyway, would have burnt everything down to stay warm and drafted into war before then! 

I'll take the hot air ballon! 

Edited by harrygill111

 

 

 

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So in reality if you are retired paying basic rate tax you will have a tax reduction of 5% ( 1p from 20p ).
Inflation is around 10% or perhaps 15% depending on how you calculate inflation.
The timing of a forecasted 5% drop in inflation due to the energy price caps is not good for pensioners hoping that under the triple lock their pensions will rise by 10%.
However if you are a high earner or a city b(w)anker you will be considerably better off and can return to the overpriced wine bars in the City to drink champagne on a Friday evening.

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2 minutes ago, LawrenceChard said:

What you need is some of the lighter-than-air gold, silver, and platinum coins, as made in China, and sold as genuine rarities on ebay!

😎

Do you give free postage on your top quality items you supply as mentioned above?

Central bankers are politicians disguised as economists or bankers. They’re either incompetent or liars. So, either way, you’re never going to get a valid answer.” - Peter Schiff

Sound money is not a guarantee of a free society, but a free society is impossible without sound money. We are currently a society enslaved by debt.
 
If you are a new member and want to know why we stack PMs look at this link https://www.thesilverforum.com/topic/56131-videos-of-significance/#comment-381454
 
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2 hours ago, SidS said:

I totally agree with this.

The increased spending isn't coming from tax raised but from money borrowed, if what I've heard is correct.

Gideon Osbourne must be turning in his chair.

 

1 hour ago, JunkBond said:

Calm down lads it's just the £ collapsing.

 

3 hours ago, LawrenceChard said:

Mini Budget - Immediate Effects on Precious Metal Prices and Pound Sterling Exchange Rate

I have just read on BBC News:

Summary

  1. In a massive shake-up of the UK's finances, Chancellor Kwasi Kwarteng has outlined a series of tax cuts and economic measures he says will boost growth
  2. It's the biggest tax-cutting event since 1972, the director of the Institute for Fiscal Studies says
  3. The basic rate of income tax has been cut to 19p and the 45% top rate of tax for higher earners abolished - although this doesn't apply in Scotland
  4. The threshold before stamp duty is paid in England and Northern Ireland has been raised to £250,000 - for first time buyers it's £425,000
  5. The cap on bankers' bonuses has been lifted, and a planned rise in corporation tax has been scrapped
  6. An increase in National Insurance has been reversed, and low-tax investment zones will be set up across the UK
  7. Labour's shadow chancellor said it was a plan "to reward the already wealthy" and would not help those struggling most with rising prices

I instantly realised this was likely to push the pound down on foreign exchange markets, which it has, currenlty £ = 1.1057

This would also have a corresponding effect on gold and silver prices:

Sure enough, gold £1492, but now about £1489. It could wobble to £1500+.

Silver relatively unchanged at £17.29

It will be interesting to see where all three of the above prices (GBP, AU, and AG) go in the next few days and weeks.

😎

I think it is worth showing a graph of the recent foreign exchange rate rate of the pound against the US dollar.

This is from the Bank of England:

1546242311_BankofEnglandDailyspotratesagainstGBP.thumb.jpg.be795d031e8bc15420b66e4cd3f7f395.jpg

As you can see, the pound was trading at over $1.41 as recently as May this year.

It is currently under $1.09

This affects all precious metal prices in sterling.

😎

Chards

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1 hour ago, LawrenceChard said:

At ebay prices?, certainly!

😎

Lol no reactions!

Central bankers are politicians disguised as economists or bankers. They’re either incompetent or liars. So, either way, you’re never going to get a valid answer.” - Peter Schiff

Sound money is not a guarantee of a free society, but a free society is impossible without sound money. We are currently a society enslaved by debt.
 
If you are a new member and want to know why we stack PMs look at this link https://www.thesilverforum.com/topic/56131-videos-of-significance/#comment-381454
 
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Getting quite extreme now. 🤔

 

 

Screen Shot 2022-09-25 at 8.31.03 PM.png

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary. - H.L. Mencken

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