Bad news about the dollar for travelers to Europe (and everyone else, too!)
Dec 6th, 2006, 05:21 PM
#101
And to add to the joyful news, Gordon Broon (UK Chancellor) announced today that HM govt will be doubling the air passenger duty (departure tax) effective February 1. It will go from £10 to £20 for economy tickets (per takeoff) and from £40 to £80 for premium economy, business and first class fares. Note this fee will still be charged even on award tickets.
Hands up everyone who needed another reason to avoid LHR. Think train. Think boat.
Hands up everyone who needed another reason to avoid LHR. Think train. Think boat.
Dec 6th, 2006, 10:45 PM
#102
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"It will go from £10 to £20 for economy tickets (per takeoff) and from £40 to £80 for premium economy, business and first class fares"
It (UK departure tax) most certainly won't.
Departure tax on economy flights within the EEA will rise on Feb 1 from £5 to £10. The rates gardyloo quotes refer only to long-haul flights. Thinking train or boat for that quick weekend in Hong Kong might just be possible (change Brussels, Moscow, Peking and Canton, taking the South West link from Feltham to Waterloo and the KCR into Hung Hom).
But not altogether realistic for those of us with less leisure than Gardyloo.
It (UK departure tax) most certainly won't.
Departure tax on economy flights within the EEA will rise on Feb 1 from £5 to £10. The rates gardyloo quotes refer only to long-haul flights. Thinking train or boat for that quick weekend in Hong Kong might just be possible (change Brussels, Moscow, Peking and Canton, taking the South West link from Feltham to Waterloo and the KCR into Hung Hom).
But not altogether realistic for those of us with less leisure than Gardyloo.
Dec 7th, 2006, 04:11 AM
#103
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Gardyloo - regarding taking the transatlantic boat, it is very expensive. As for the transatlantic train, I can't hold my breath that long!!
Seriously, will I have to pay this higher tax even if I buy my LHR tix prior to Feb 1? (My airline still shows UK service chg and UK passenger duty tax as the same for flights both before and after Feb 1.)
Flanneruk
Ah, now about the interest rates. I always thought that the various banks were free to set them as they chose, except of course they will always take into account what those setting the rate for government bonds have done (e.g., chairman of the US Federal Reserve, or the Bank of Canada, or whoever.) At the same time, the price of those bonds floats on the (free) bond market. This means, if I have it right, that the yield of the bonds, if not the interest rates, floats on the free market.
How was it done before? (which, presumably, is how you would like to see it)
Seriously, will I have to pay this higher tax even if I buy my LHR tix prior to Feb 1? (My airline still shows UK service chg and UK passenger duty tax as the same for flights both before and after Feb 1.)
Flanneruk
Ah, now about the interest rates. I always thought that the various banks were free to set them as they chose, except of course they will always take into account what those setting the rate for government bonds have done (e.g., chairman of the US Federal Reserve, or the Bank of Canada, or whoever.) At the same time, the price of those bonds floats on the (free) bond market. This means, if I have it right, that the yield of the bonds, if not the interest rates, floats on the free market.
How was it done before? (which, presumably, is how you would like to see it)
Dec 7th, 2006, 05:25 AM
#104
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Hi Sue,
In the US, the interest rates on various treasury bonds is set by the market. The yield changes as the price rises or falls.
The daily bank-to-bank interest rate is set by the Federal Reserve at monthly meetings.
In the US, the interest rates on various treasury bonds is set by the market. The yield changes as the price rises or falls.
The daily bank-to-bank interest rate is set by the Federal Reserve at monthly meetings.
Dec 7th, 2006, 05:32 AM
#105
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Many automatic transmissions--without a clutch--now get better or the same gas mileage as their manual transmission counterparts. And this is even allowing the manual transmissions to be measured as if all drivers always hit the ideal shift points: which most drivers don't.
And I can perfectly understand big American cars not being big sellers overseas for a lot of reasons. I don't even buy them. We've bought nothing but Hondas and Toyotas for the past 20 years--mostly because of reliability. I hate to spend time and money in a garage for anything other than routine maintenance.
And I can perfectly understand big American cars not being big sellers overseas for a lot of reasons. I don't even buy them. We've bought nothing but Hondas and Toyotas for the past 20 years--mostly because of reliability. I hate to spend time and money in a garage for anything other than routine maintenance.
Dec 7th, 2006, 05:59 AM
#106
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Thanks ira for responding. I rather expected that the market would play a role in government bond rates - nobody is going to buy treasuries or government of Canada bonds if the interest rates aren't competitive. As an investment, such bonds are also sensitive to the market since as you point out, yield = interest payment/current bond price as determined by the market. But I have the suspicion flanner is concerned for other reasons.
I'm also going to be obstinate and difficult and ask how it makes sense to set <i> daily </i> interest rates at <i> monthly </i> meetings? (and the more I pursue this subject, the more I'm tempted to say nuts to all of it and keep my money in a sock under the mattress.....)
I'm also going to be obstinate and difficult and ask how it makes sense to set <i> daily </i> interest rates at <i> monthly </i> meetings? (and the more I pursue this subject, the more I'm tempted to say nuts to all of it and keep my money in a sock under the mattress.....)
Dec 7th, 2006, 06:10 AM
#107
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Hi Sue,
>...how it makes sense to set daily interest rates at monthly meetings?<
The Ded sets the minimum (prime) rate monthly. This is what banks charge each other.
The rest of us pay Prime +
The + is set by the market.
>...how it makes sense to set daily interest rates at monthly meetings?<
The Ded sets the minimum (prime) rate monthly. This is what banks charge each other.
The rest of us pay Prime +
The + is set by the market.
Dec 7th, 2006, 06:19 AM
#108
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In the Eurozone, the US and the UK, the Central Bank (eg the US Fed) sets the interest rates it will pay each month. This sets the tone for what commercial banks charge each other.
Historically, this has been a mechanism for governments to try to influence exchange rates. Exchange rates aren't a judgement on a country's competent management by a panel of objective judges: they're the result of a bunch of frightened speculators working out where their money is at least immediate risk of getting poor returns. If the US Fed is offering higher interest rates, more money flows into dollars to buy US bonds. Historically, governments who wanted their exchange rates to go in one direction or another would set their Central Bank's interest rates at the level they thought would do the trick - often with catastrophic effects on the real economy.
These days, though, governments have generally stopped trying to influence exchange rates. Of the economies most interesting to people on this board, the US, the UK and the Eurozone all let the head of their central bank set the interest rate that he (still no shes, though doubtless some Oz/Canuck/EnZed/Scandawegian poster will tell me they're ahead of the rest of us) believes will best promote low-inflation, stable growth. "Low-inflation" is higher in the Eurozone's priorities, "stable growth" higher in the English-speaking countries, but the principle is common: technocrats take decisions based on pre-determined criteria.
The exchange rate that flows from that decision is something governments are meant to live. Governments - at any rate these governments - don't control, or really influence at all, exchange rates, except to the extent their behaviour influences market sentiment.
Historically, this has been a mechanism for governments to try to influence exchange rates. Exchange rates aren't a judgement on a country's competent management by a panel of objective judges: they're the result of a bunch of frightened speculators working out where their money is at least immediate risk of getting poor returns. If the US Fed is offering higher interest rates, more money flows into dollars to buy US bonds. Historically, governments who wanted their exchange rates to go in one direction or another would set their Central Bank's interest rates at the level they thought would do the trick - often with catastrophic effects on the real economy.
These days, though, governments have generally stopped trying to influence exchange rates. Of the economies most interesting to people on this board, the US, the UK and the Eurozone all let the head of their central bank set the interest rate that he (still no shes, though doubtless some Oz/Canuck/EnZed/Scandawegian poster will tell me they're ahead of the rest of us) believes will best promote low-inflation, stable growth. "Low-inflation" is higher in the Eurozone's priorities, "stable growth" higher in the English-speaking countries, but the principle is common: technocrats take decisions based on pre-determined criteria.
The exchange rate that flows from that decision is something governments are meant to live. Governments - at any rate these governments - don't control, or really influence at all, exchange rates, except to the extent their behaviour influences market sentiment.
Dec 7th, 2006, 07:28 AM
#109
<i>Gardyloo - regarding taking the transatlantic boat, it is very expensive. As for the transatlantic train, I can't hold my breath that long!!</i>
Re the train - just a failure of vision on the part of key decision makers IMO - http://tinyurl.com/yepzw6
As for the boat, well of course the fare is higher, but you can take the QM2 across the pond for around US$1100 per person; that's 6 days at under $200 a day including all accommodation, meals and entertainment, plus transportation. It's a different type of holiday than fly + restaurants + hotels, but not necessarily more expensive. Takes longer, of course, but for those of us with more leisure than Flanner
it sure beats sitting on a train through the Urals for several days. Frankly, it beats sitting in Terminal 4 in Heathrow all to hell, and the flat bed you get on a Cunarder is way nicer than any Club Welt chair populating BA's wildest dreams.
<i>Seriously, will I have to pay this higher tax even if I buy my LHR tix prior to Feb 1? (My airline still shows UK service chg and UK passenger duty tax as the same for flights both before and after Feb 1.) </i>
Don't know how they'll impose the fee hike on existing tickets of record on 1 Feb. One important note is that it's not levied on transits of 24h or less, so if you're changing planes in the UK it won't be an issue.
Re the train - just a failure of vision on the part of key decision makers IMO - http://tinyurl.com/yepzw6
As for the boat, well of course the fare is higher, but you can take the QM2 across the pond for around US$1100 per person; that's 6 days at under $200 a day including all accommodation, meals and entertainment, plus transportation. It's a different type of holiday than fly + restaurants + hotels, but not necessarily more expensive. Takes longer, of course, but for those of us with more leisure than Flanner
it sure beats sitting on a train through the Urals for several days. Frankly, it beats sitting in Terminal 4 in Heathrow all to hell, and the flat bed you get on a Cunarder is way nicer than any Club Welt chair populating BA's wildest dreams.<i>Seriously, will I have to pay this higher tax even if I buy my LHR tix prior to Feb 1? (My airline still shows UK service chg and UK passenger duty tax as the same for flights both before and after Feb 1.) </i>
Don't know how they'll impose the fee hike on existing tickets of record on 1 Feb. One important note is that it's not levied on transits of 24h or less, so if you're changing planes in the UK it won't be an issue.
Dec 7th, 2006, 07:36 AM
#110
Meant to add for Flanner - Actually for residents of far flung outposts of the Empire - say, Kent - it can be faster to take the train to Paris, switch to CDG and fly to Hong Kong than schlepping to LHR, paying your £20/80 and then flying to HKG. (Comparable CDG taxes/fees are around €25 or so.)
Dec 7th, 2006, 09:21 AM
#111
Since July 1st, France has the solidarity tax that certain countries apply to finance the 3rd world AIDS fund. For a long distance flight, it is 4€ in economy class and 40€ in higher classes.
Dec 7th, 2006, 09:33 AM
#112
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I can't resist any longer replying to the misinformation about interest rates.
ira said: "The Ded sets the minimum (prime) rate monthly. This is what banks charge each other."
The Federal Funds TARGET rate is NOT the prime rate. Banks are free to set their own prime rate just as they are free to set the interest they pay on deposits. Competitive pressures, however, keep them in line.
flanneruk said: "the US, the UK and the Eurozone all let the head of their central bank set the interest rate"
That may be true in the UK and the Eurozone but in the US it, the Federal Funds TARGET rate, is set by the Federal Open Market Committee (FOMC).
sue asks: I'm also going to be obstinate and difficult and ask how it makes sense to set daily interest rates at monthly meetings?
They don't, sue. They set a TARGET at the FOMC meetings and the market does the rest. The FOMC can meet at any time, even by phone or teleconferincing, and would do so in any monetary emergency.
You can get more at:
http://www.federalreserve.gov/fomc/fundsrate.htm
and this is a small excerpt:
Federal Funds Rate
The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.
Notes:
This is what news reports are referring to when they talk about the Fed changing interest rates. In fact, the FOMC sets a target for this rate, but not the actual rate itself (because it is determined by the open market).
If you want to know what the various rates are you can find them at:
http://www.bloomberg.com/markets/rates/index.html
ira said: "The Ded sets the minimum (prime) rate monthly. This is what banks charge each other."
The Federal Funds TARGET rate is NOT the prime rate. Banks are free to set their own prime rate just as they are free to set the interest they pay on deposits. Competitive pressures, however, keep them in line.
flanneruk said: "the US, the UK and the Eurozone all let the head of their central bank set the interest rate"
That may be true in the UK and the Eurozone but in the US it, the Federal Funds TARGET rate, is set by the Federal Open Market Committee (FOMC).
sue asks: I'm also going to be obstinate and difficult and ask how it makes sense to set daily interest rates at monthly meetings?
They don't, sue. They set a TARGET at the FOMC meetings and the market does the rest. The FOMC can meet at any time, even by phone or teleconferincing, and would do so in any monetary emergency.
You can get more at:
http://www.federalreserve.gov/fomc/fundsrate.htm
and this is a small excerpt:
Federal Funds Rate
The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.
Notes:
This is what news reports are referring to when they talk about the Fed changing interest rates. In fact, the FOMC sets a target for this rate, but not the actual rate itself (because it is determined by the open market).
If you want to know what the various rates are you can find them at:
http://www.bloomberg.com/markets/rates/index.html
Dec 7th, 2006, 10:06 AM
#113
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jsmith, Thanks for the link to Bloomberg I noticed a nice graph on that page showing short term bond rates higher than long term,[the classic inverted yield curve].If I am not mistaken that is a presage to a coming recession in the US.Then again maybe not.
Dec 8th, 2006, 06:11 AM
#114
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Lovejoy, unfortunately you are right. Long term interest rates are normally higher than short term rates. Right now the overnight target rate arbitrarily set by the "fed" OMC is 3/4 percent higher than the Treasury ten year note. This yield curve inversion signals a recession in about nine months. That's what the bankers want. The fed should be abolished. Let the market govern, on a gold standard.
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