Monday, May 19, 2008
Starring Brown, Boom and Bust. Misdirected by Prudence
Telegraph: UK economic hangover set to worsen after 16 years of plenty
"After all, the fall in house prices has only just begun. When you look at the scale of over-valuation in the housing market (about which I have been banging on for years) and the scale of the coming squeeze on bank lending (about which I have been banging on for the last few months) you have to imagine that house prices have much further to fall."
Posted by letthemfall @ 09:08 AM (458 views) Add Comment
4 Comments
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1. renting2 said...
A prolonged economic downturn will also introduce another little talked about factor - possible increase divorce numbers. Many break-ups are as a result of, or greatly influenced by, family financial problems. Where will all those singles and broken families live? They will not be able to stretch to double housing costs now and in the future. Even more pressure on GB/AD and the taxpayer.
We live in interesting times as the Chinese curse goes.
2. Bananasplit said...
@renting2
I agree and have mentioned this in the past, the other issue is most families have pets and most private landlords advertise, no pets, no smokers, no dss and this will compound the problem and will lead to increased crime, shop lifting, muggings etc.
3. drewster said...
Interesting how the word "recession" is now considered irrelevant:
"What is likely is an extended period of low growth, higher unemployment, squeezed real incomes and falling house prices. That may not qualify as a recession in the technical sense, but for most people that will seem an academic distinction."
A recession is defined as two quarters of negative GDP growth. It doesn't take into account unemployment prices, disposable incomes, cost of living, or any other tangible measures. This government has focused so hard on avoiding a "recession" that they've gone out of their way to fiddle the inflation and immigration figures just to keep the GDP growing. An artificially low inflation figure flatters the GDP; and a high immigration rate usually makes the GDP increase too, even if GDP per capita is falling.
4. icarus said...
So things will get a bit worse but they won't get THAT bad. Bootle has made out a case for the first part of that opinion but not for the second part.