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Gordon "miracle Economy" Brown's Legacy

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15th February 2006

Gordon Brown is now spending most of his time out of the Treasury, laying the ground for his ascension to the top spot. But while he is keen to talk up government initiatives on a range of topics from security to being British,
it is his economic legacy on which he will be judged
His worst legacy?
The massive debt mountain threatening economic growth
This comes in two flavours: the huge government deficits generated since 1997 and - more worrying still - the record levels of personal debt facing families.
It emerged this week that the amount families have borrowed has now overtaken the size of the country's entire economic output.
At £1,158billion, the debt mountain was £30billion bigger than Britain's gross domestic product and, unlike the economy, shows little sign of slowing
The simple truth is that this decade of debt has, in part, been caused by the Bank of England's very independence. By keeping interest rates so low, the monetary policy committee fuelled this debt explosion, and caused a massive house price boom.
But whereas previous house price bubbles were burst when the Government lifted rates, the independent MPC managed to keep borrowing costs low, convincing families that their debt-servicing costs would remain small forever.

Why didn't Gordon follow his mentor's policy (Al "too little too late" Greenspan) of continually raising rates to stop the debt monster before it became too big to handle? Because HPI made everything look good allowing NuLabour to con the voters. Next time let us hope that "We won't be fooled again." The official song of HPC.co.uk!

Edited by Realistbear

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Next time let us hope that "We won't be fooled again." The official song of HPC.co.uk!

Gotto me Kelis - Trick me once, won't let you trick me twice

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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