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A.steve

Conservatives May Need Emergency Budget After Poll

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I suspect that the only reason bond markets haven't tanked thus far is the expectation that come next May, grown-ups will be running the country and they will start to do what's necessary to balance the books. If they don't show serious signs of doing so very soon after the election, we're in trouble, hence Hammond making noises that the Tories get it.

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Is Hammond setting out his stall as Thatcher's successor on the economy? Someone who will administer our medicine rather than sweep everything under the carpet?

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I suspect that the only reason bond markets haven't tanked thus far is the expectation that come next May, grown-ups will be running the country and they will start to do what's necessary to balance the books. If they don't show serious signs of doing so very soon after the election, we're in trouble, hence Hammond making noises that the Tories get it.

Good post. I hadn't really thought that the only thing keeping the show on the road at the moment was the prospect of a Tory Government taking over soon and taking some tough, sane decisions.

Be interesting to see how the bond markets would react if Labour, by some miracle, started to perform better in the polls.

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Is Hammond setting out his stall as Thatcher's successor on the economy?

I hope not. What we need, irrespective of whatever party, is not to follow a course to balance the books or return to surplus at the expense of restarting the private sector and houshold debt binge.

Much better for the govt. to be running deficits than for private sector and consumer to drive the economy via massive credit expansion. We don't want another GFC. As much as the intervention of govt. via bank bailouts, stimulus and ZIRP is declared a temporary fix, it may go on for a much longer period if the can't restart the private sector credit bubble.

What i don't think is needed for any longer is queasing. And the combo of ZIRP and queasing is a paint yourself into a corner tactic.

The amount of money that's going to be spent on heath and education in particular over the next couple of years, and future spending commitments may well mean the tories have less room to manouvere despite the talk of emergency budgets.

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Good post. I hadn't really thought that the only thing keeping the show on the road at the moment was the prospect of a Tory Government taking over soon and taking some tough, sane decisions.

Be interesting to see how the bond markets would react if Labour, by some miracle, started to perform better in the polls.

could it be you hadn't really thought that becuase it isn't an accurate assesment of the situation.

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Erm, off-topic? I'm not usually one to whine, but this news was posted by two regular readers - both were moved off topic, and I'm not sure why.

This is a story, admittedly coming from a political angle, about an extraordinary fiscal situation. Sure, it isn't directly about "house prices" - but it definitely was about the economy. The issues with sovereign debt rating impact house prices in several significant ways: one issue is that sovereign debt underpins the value of our currency - its value to investors underpins the value of sterling and determines inflation (to a great extent) - and this has a great influence on the "real" cost of buying a home. Furthermore, in the short term, 'austerity measures' alluded to in the initially referenced article have a significant impact to employment - especially in the public sector... and squares with the argument that Britain may see an extended period of deflation, low employment and falling asset prices.

I don't want to be argumentative, but if this sort of material isn't appropriate, perhaps I need to look for another forum which is interested in the direction in which our economy is heading. Not only are these matters, in my opinion, critical in determining the price of houses in the future, they also dictate affordability of debt - making it a doubly relevant issue.

Was this topic misunderstood?

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