Monday, December 3, 2007

It's too late to stop the housing crash


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The Bank of England is set to decide on interest rates this Thursday.

It should be one of the most lively meetings they’ve had recently. Governor Mervyn King is clearly still trying to fight the good fight against inflation. And with oil prices still near $100 a barrel, who can blame him?

But others are getting edgy. David Blanchflower wants a cut (as always), but so does Sir John Gieve. As Liam Halligan said in this weekend’s Telegraph, there’s a strong possibility that the governor might be outvoted, and we’ll see a December cut.

Not that it’ll make any difference to the housing market…

At the weekend, the Express, ever the master of understatement, ran the headline “100 days to halt housing crash”. Ray Boulger of mortgage broker John Charcol warns that if the bank doesn’t start cutting rates by February, “any small early-year blip could spiral into a full-blown property crash...”


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