Friday, May 11, 2007
An economy built on credit
Guardian: Safe as houses?
The alpha and omega of the British economy is our buoyant housing market and the way it drives lending growth, consumption and the structure of economic activity - and above all, inflation. House prices are too high - just as they were in 1988. The BOE is smart; its record so far speaks for itself. But it runs an economy that is over-dependent on house prices to generate growth and employment.
Posted by uncle chris @ 08:47 PM (313 views) Add Comment
1 Comment
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1. nearly30 said...
Top quote:
The Bank is smart; its record so far speaks for itself. But it runs an economy that is over-dependent on house prices to generate growth and employment. Blair and Brown have tried to build Britain's knowledge economy, but they have done little to tackle the vortex of planning restrictions, buy-to-let mania, lending recklessness and poverty of social housing that have driven the housing boom. We have to hope the Bank is run by supermen. Otherwise a reckoning lies ahead.