Bloomberg TV is tonight reporting the Standard & Poors credit rating agency predicting a fall of 30% in UK house prices (from 2007 peak) in 2009.
Back in April Charles Bean, the Bank of England’s Chief Economist, gave an under-reported speech that shook up the Gilts market. It should have shaken up everyone. According to Mr Bean the Bank’s research found that 5% of mortgagors had less than 20% equity in their home. That is equivalent to 650,000 homeowners.
A 30% fall would see more than a million homeowners better off giving the bank the keys to the front door. This could be some bust…
UPDATE : Pound is tumbling as Asian markets open tonight. The pound is now at the weakest it has ever been against the Euro, tumbling against the Swiss Franc as well. Guido is short…
Made Guido laugh. Mitt Romney gave Guido the creeps…
The Indy’s Jane Merrick is reporting “that Stephen Carter, Mr Brown’s high-profile strategist, is to leave his job after a bitter turf war inside Downing Street. The public relations guru’s move to a lower-key role is a victory for the Prime Minister’s long-serving advisers….”
Guido is cautious about the story because it smacks of wishful thinking by some in the Brown bunker, Carter and Muir have not been sugar-coating the dire focus group feedback. It stands out that no one else is reporting the demotion story, Merrick may have just been spun by the Brownies.
Getting rid of Carter and replacing Darling with Ed Balls would signal that the Brown bunker is bonkers, the Treasury is clearly in revolt at the £40 billion state house building splurge supposedly planned by Downing Street. Having nationalised home lending via Northern Rock, Gordon plans to double up on the mistake and nationalise home building. A last gasp of socialism to appease the Labour core-vote – public sector mass housing has been such a success hasn’t it? Huge estates of stable families, high employment, low crime and civic responsibility.
Wonder if Vince Cable will support him this time as well?
UPDATE : Dale says Merrick claims the report is triple sourced though Downing Street denies it. If Carter has quit rather than been demoted what does that say about the dysfunction in Downing Street?
The Chancellor’s candid confession that the economy is tanking worse than previously admitted has been seized on by his shadow. Osborne asks
Who is telling the truth at the top of Government? The Prime Minister says the economic situation isn’t as bad people think and that Britain is well placed to weather the economic storm, but the Chancellor says we are at a 60 year low. Gordon Brown has briefed out stories that he has an economic recovery plan all worked out, meanwhile the Chancellor says the downturn will be more profound and long-lasting than people thought.
Mulling over whether or not to bet the shop against sterling…
UPDATE : The Chancellor in the interview does appear to know the price of eggs. We can relax. Phew.
A co-conspirator reports that Newsnight reported the Dow up 171 points tonight. Reassuring in these times of financial market uncertainty. Alas Guido has to report that the BBC’s flagship news and current affairs programme (budget £3 billion) has managed to get it wrong yet again. The Dow closed down 171 points. This would never have happened in Peter Barron’s day, oh hold on…
How hard can it be to report the closing price of the world’s most watched market correctly? Can’t they get a trained monkey to do it?
If all our economic woes are made in America as Gordon claims, why is that their economy is showing healthy growth (despite high oil prices) and the U.K. economy is flat-lining?
Could it have something to do with George Bush’s timely $150 billion bi-partisan growth stimulus package in February? Both the Democrats and Republicans are running on tax cutting platforms. We have bi-partisan tax and spend sloth policies. Guido understands the politics of it, the economics of it are what disappoints. The Finkelstein “you can’t win promising tax cuts” approach was always timid, it is now the wrong strategy at the wrong time. The voters have moved on, they recognise the economy needs tax cuts to grow.