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Hair-Of-Dog Policy Risks U.k. Housing Boom Repeat, Turner Says

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http://www.bloomberg.com/news/2013-10-28/hair-of-dog-policy-risks-u-k-housing-boom-repeat-turner-says.html

Britain risks repeating the debt-fueled binge that led to the credit crisis as the government relies on a hair-of-the-dog remedy for the economy, said former Financial Services Authority Chairman Adair Turner.

“We had a fantastic party, we got a whacking great hangover, and we’ve decided that the best cure is a really stiff drink,” Turner said in an interview in Singapore on Oct. 25. “Which is the same all over again -- get the housing market going again.”

House prices in England and Wales rose 3.1 percent from a year earlier, the biggest gain since 2007, Hometrack Ltd. said today. The report adds to evidence that Chancellor of the Exchequer George Osborne’s Help to Buy program is stoking the property market.

Turner added his voice to critics including the opposition Labour Party and the International Monetary Fund who say the initiative, which cuts deposit requirements for people wanting to get onto the property ladder, could fuel another property bubble. In London, prices are soaring amid demand from cash-rich international buyers.

“We now have an incredibly frothy central London and wider London market and an increasingly buoyant across-the-economy market,” he said. “It’s that increasingly buoyant across-the-economy market that we have to watch carefully and make sure that we don’t allow it to go from reasonable buoyancy to excess.”

Now the housing market is just buoyant.... And we had a fantastic party... I really don't recall this fantastic party I just seem to remember people just getting larger and larger loans to fund the bar bill.

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“We now have an incredibly frothy central London and wider London market and an increasingly buoyant across-the-economy market,” he said. “It’s that increasingly buoyant across-the-economy market that we have to watch carefully and make sure that we don’t allow it to go from reasonable buoyancy to excess.”

In other words:-

"We don't give a sh1t about London prices. We welcome all those cash rich foreign tax exiles paying obscene prices to get a pied a terre in our tax haven. So we're going to ignore all of that as usual".

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It doesn't lead to a good message for election.

They'd be better doing some proper work on reviving northern manufacturing / industry and getting overseas investment in to that.

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