Friday, May 28, 2010
A radical departure from chasing property prices
Yahoo: Rates must be set to control inflation - Cameron
The article doesn't specifically mention that the Bank has been targeting property prices, but does mention that its targets haven't been inflation in recent years, Hmmm.
Posted by paul @ 10:29 AM (1579 views) Add Comment
19 Comments
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1. tyrellcorporation said...
Excellent!
Oh the irony. all you lefties blogging on this site may yet benefit - from a Conservative administration. Time to eat your hats, swallow your pride, bury the hatchet, AND ADMIT YOU WERE ROYALLY STIFFED BY YOUR OWN PARTY!
2. alan_540 said...
Oh yes.
3. mark said...
my gut feeling is the new government want the house crash to rush ahead, bottom out and start to rise before the next election..
they might allow the 30% drop needed to bring prices back in line with salaries
4. Cass said...
very true TC.
5. When said...
I cant see it rates going up, even Mervin King said
"Even Bank of England governor Mervyn King has suggested that the base rate, currently 0.5 per cent, will stay at record low levels for up to four years – longer than expected.",
http://www.express.co.uk/posts/view/172842/House-prices-are-set-to-soar
I wont be holding my breath...
6. mark wadsworth said...
I hope and pray that Mark's predictions come to pass, but I think Cam still very much has his Home-Owner-Ist blinkers on - what is missing from these paragraphs?
Cameron said the economy had been heading in the wrong direction for years, was over-reliant on welfare and increasingly hostile to enterprise. "As a country we have become indebted on an unprecedented scale. Our huge public debt is the clearest manifestation of our economic mistakes -- the glaring warning sign overhead telling us we have taken the wrong route".
I have inserted the missing words in bold:
Cameron said the economy had been heading in the wrong direction for years, was over-reliant on welfare, ever rising house prices and increasingly hostile to enterprise. "As a country we have become indebted on an unprecedented scale. Our huge public debt and our huge mortgage debt mountain, which dwarfs public sector debt [are] the clearest manifestation[s] of our economic mistakes -- the glaring warning sign overhead telling us we have taken the wrong route".
7. uncle tom said...
As I've said before, the new govt fears an HPC on top of the next election.
Best policy is to stress test the market now, so if it's going to give, make it give soon - simples!
8. 51ck-6-51x said...
MW - you made my mistake of forgetting to close a tag. ...Is that better now?
9. mark wadsworth said...
Sorry
10. the number cruncher said...
As one of the biggest lefties on this site let may say I firmly welcome this: good economics is not the preserve of any party.
And I think we can thank the lib dems (who I voted for) and not the Tories for the progressive politics of the coalition.
I also think the Blair/Brown Government was morally corrupt and in the hands of the bankers and rent seekers. This does not mean that being a lefty is wrong and in my view there are plenty of corrupt and stupid people in all shades of the political spectrum. I still think right = selfish and unhappy humanity as opposed to left = sharing and happiness for all.
11. 51ck-6-51x said...
No Crunch said, "I think we can thank the lib dems for the progressive politics of the coalition"
and
"[Labour] were in the hands of the bankers and rent seekers "
Totally agree with both these. I voted lib dem because I thought they had the best policies for right now, however, as a libertarian, I believe that in the long term many of their economic policies would actually be damaging (as an historic example look at income tax which was set up temporarily to fund the Napoleonic wars yet are still with us although in a somewhat evolved state) - funnily enough this coalition is about as near to my preference as I could get, yet I could not vote for it directly.
12. orcusmaximus said...
Hmm. Does Left stand for Big Inefficient State and Centralised Government or Socially Fair Policies?
So tempted to leave a
13. timmy t said...
Mark @3, maybe that's why they're hiking CGT... flood the market with properties, bring on the crash quickly and sharply, and then drop it again just before the next election to win back traditional tory voters. I'm liking this...
ReCaptcha "clered karo" - wtf?
14. str 2007 said...
Number Cruncher
''I still think right = selfish and unhappy humanity as opposed to left = sharing and happiness for all.''
I think the first part of your statement describes the last 10 years almost perfectly (it took labour 3-4 years to get their policy of destruction and self grabbing going).
The second half of your statement is more akin to how I'm feeling now.
I'm looking forward to the over indebted sharing the weight of their greed instead of it being on the shoulders of others.
15. need-a-crash said...
Mark Wadsworth
While David Cameron does not explicitly mention the housing bubble as the cause of our woes, that doesn't mean he isn't aware of that or that he won't try and rectify house prices. If he had made the statement as you re-wrote it, home-owners could then attack him for deliberately trying to cause a house price crash or accuse him of hypocrisy if interest rates ever went up etc. So it makes sense for him to phrase at as he did.
However whether or not he does have "Home-Owner-Ist blinkers on" does still remain to be seen.
16. Crunchy said...
1. tyrellcorporation said...Excellent!
Oh the irony. all you lefties blogging on this site may yet benefit - from a Conservative administration. Time to eat your hats, swallow your pride, bury the hatchet, AND ADMIT YOU WERE ROYALLY STIFFED BY YOUR OWN PARTY!
The two party system. Get over it! The creditor is boss now. Like it or lump it!
Techie, are you still looking at the Euro? Loving the dollar is going to cost you serious money.
I hope you got your expodential position trade in early. LOL
17. Skeptical First Time Buyer said...
@15 agree entirely
I'm pretty convinced the crash will happen now, in a split of inflation and value in £ losses.
For my own part, to cover myself against all eventualities I have a girlfriend with a house whose mortgage can be inflated away, and a deposit saved up for myself backed in gold, and oil stocks should I decide it's best for us to trade up.
Regrading the politics:
The left right debate we keep having is a shame. What we need is new parties judged in terms of competent vs le competent, judged on policy proposals.
I lean to Tories on grounds of fiscal competence, but could not be happier with Lib Dem involvement. Tories biggest problem is their reputation, we've stopped judging the policies.
I reckon most of the people hear would find agreement about what's a good vs bad idea regardless of their supposed political leanings. The biggest split I pick up on is the cynical vs hopeful split.
Cynical is self fulfilling if enough people follow that approach, but it will bring us the worst outcome in the long run.
a final question
Just wondering what happens to this site in 6 years or so when the dust has settled. Will it keep going. If not can someone set up a news and economics board where you bright sparks can keep posting fantastic debate and interpretation of events.
We don't really get anything of that sort on the BBC any more.
18. mark wadsworth said...
NAC, indeed, we will see. I hope that you are right and I am wrong.
But let's not forget that Dave now has a taxpayer funded main residence (Number 10) plus he 'owns' a house in Notting Hill and a former farm out in Oxfordshire (both of which he bought with taxpayer subsidised loans). Plus his wife's Dad 'owns' hundreds of acres of land.
Will he put "country before naked self-interest"?
19. 51ck-6-51x said...
From personal anecdotal evidence asking prices do seem to be dropping.
I had a call from an agent to inform me of one new drop before they put it in their window (a property I had viewed, liked and opined on whereupon I was told the vendor would not accept the offer I'd make, which is still shy of the new price). I believe, but don't know for a fact, that it's their one and only home, yet, looking at the land-reg data, they have dropped the price by almost exactly the cost of the extra CGT if it were (if you round the asking to the nearest grand, and take account of the 0%CGT threshold it is exact) ...coincidence? Well maybe.
reCaptcha: To Norfolk
let's go!!