Economic Agenda has, for many years, banged on about the need to build more homes. This lack of focus on housing just cost the Conservatives their majority in the House of Commons. It was the misery felt by countless “priced-out” young adults of family-forming age, renting or still living with parents, that saw them vote Labour.
The Tories must now take immediate, bold and visible steps to ensure many more affordable homes are built, reining in the sky-high cost of housing. If not, a generation of natural Conservatives will increasingly back Jeremy Corbyn – and Britain will soon be run by a Marxist.
Ooohhh – events on the Bank of England’s Monetary Policy Committee are getting interesting. Earlier this month, the MPC kept rates on hold at an all-time record low of 0.25pc.
We learnt last Thursday, though, that the decision was strikingly close – 5 votes to 3, rather than the predicted 7 to 1. External members Ian McCafferty and Michael Saunders joined Kristin Forbes, who has been backing a rate rise for several months. They were right to do so – not least as the admirable Forbes is about to leave the MPC.
“If I lose just six seats, Jeremy Corbyn will be sitting down to negotiate with the presidents, prime ministers and chancellors of Europe”. So said Theresa May, just ahead of Thursday’s election, in a bid to encourage the Conservative faithful to turn and vote.
Well, May lost more than six seats and Corbyn could soon be running Britain. Whatever the outcome – be it a workable “confidence and supply” deal with the Democratic Unionists” or some Tory backroom blood-letting – there will surely be another election soon.
Journalists like to use certain words. A clumsy political mistake, in news-speak, is a “gaffe”. An eye-catching opinion poll is “rogue”. A currency that goes up and down a lot “whipsaws”. Well, sterling has certainly whipsawed lately, after successive gaffes and a series of rogue polls.
The pound remains more than 10pc down against the dollar since last June’s EU referendum. It’s up almost 5pc, though, since the start of 2017 – and rallied in mid-April, to a six-month high, after Theresa May called a snap election. Investors bought sterling on the hope an improvement on the Tories’ 17-seat Commons majority would strength the Prime Minister’s hand during the Brexit negotiations.
You might think the “euro-crisis” is solved. After all, the economy of the 19-country eurozone expanded at an annual rate of 1.8pc during the first quarter, outpacing Britain and the US. Surveys show French and German growth at a six-year high.
All that fuss about Greece, Portugal and Cyprus going bankrupt, and spreading “financial contagion” across the world, seems over. And Yanis Varoufakis, that dashing Greek academic-turned-finance-minister, who grappled with the German paymasters, has just published his memoirs.
“We reject the cult of selfish individualism,” declared last week’s Conservative manifesto. “We see rigid dogma and ideology not just as needless but dangerous”. Theresa May styles herself as a “strong and stable” female Prime Minister. Yet during this manifesto launch, she downplayed comparisons with Margaret Thatcher.
“There is no such thing as society,” is one of the best-known aphorisms of the 1980s. “You turn if you want to – the lady is not for turning,” is another of Thatcher’s most quoted quips. The statements at the start of this column – presented as May’s “philosophy” – seem designed to rebut two of Thatcher’s trademark phrases.
“En Marche!” That’s the message of Emmanuel Macron – the telegenic “independent” inaugurated today as the youngest ever President of France. Can Macron get the moribund French economy “on the move” as his slogan suggests? Can this 39-year old, with only two years of political experience, no Parliamentary party and having never held elected office, succeed where so many have failed, injecting some dynamism into France? And can he re-invigorate the crisis-ridden European Union.
Much is at stake. The world’s sixth-biggest economy, France is also the second-largest member of the eurozone – a key player, economically and diplomatically, if the single currency is ever going to work. Having seen off Marine Le Pen, can Macron now drive jobs, growth and broader French prosperity, so keeping bad-tempered euro-populism in check?
Having last week announced his intention to leave Parliament after 34 years, Former Cabinet Minister Peter Lilley used his final Prime Minister’s Questions to wish Theresa May “Godspeed”. The member for Hitchen and Harpenden also asked his party leader if she still recognized, when it comes to the UK’s Article 50 negotiations, “that to get a reasonable deal we must accept that no deal is better than a bad deal”?
May famously used this phrase in her pivotal Lancaster House speech on Brexit in January. In stark contrast to her predecessor, who foolishly declared up front his support for Remain in last summer’s referendum on European Union membership, whatever the outcome of his “renegotiation”, May took a much tougher line.
Britain will be among the fastest-growing economies in the industrialized world this year, according to the International Monetary Fund. With the UK set to expand by 2pc in 2017, outstripping Germany, France, Japan and second only to the United States, the IMF last week became the latest in a long line of official forecasters to ditch predictions of British economic woe after last summer’s Brexit vote.
It wasn’t the IMF, though, that caused the pound to rally last week – even if its UK growth forecast was sharply increased from 1.5pc, with Britain getting the biggest upgrade of any major economy. Sterling surged by 4pc against the dollar last Tuesday, hitting a six-and-half month high, because of a snap election.
For decades, across much of the UK, far too few homes have been built. The average house now costs almost eight times annual earnings – an all-time record. In London and the South-East, of course, this ratio is even higher.
Much of “generation rent” is simply unable to buy a home. For millions of youngsters, even those with professional qualifications and good jobs, property-ownership is an ever more distant dream. Ten years ago, 64pc of 25- to 34-year olds, the crucial family-forming age group, owned their own home. In 2015, it was 39pc.