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Tag Archives: Kate Barker

An extremely important subject flickered onto our news radar last week. It was soon crowded out by other events but will return, I hope several times, before the May general election. Amidst headlines telling of an interim deal between Greece and its creditors, Madonna falling off a stage and the true identity of “Jihadi John”, this vital topic punched through. Housing is surely one of the most significant, and divisive, issues the UK now faces. And despite politicians’ reluctance to discuss it, the debate could well get heated in the run-up to polling day.

Last week’s housing news was driven by a warning from a leading international think-tank that Britain isn’t building enough homes. UK house prices are soaring, argued the Organisation for Cooperation and Development in a new report, because “housing supply has not risen to meet demand”. Such sharp price rises, the OECD continued, “may create risks to financial stability in the case of a downward adjustment”.
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As far as most observers are concerned, Mark Carney’s speech at the Mansion House last Thursday boiled down to a single half sentence. The first rise in interest rates since July 2007 “could happen sooner than markets currently expect”, the Bank of England Governor uttered, to assembled City grandees and the wider world beyond. This sparked a frenzy of speculation that rates could start rising from their historic low of 0.5pc, where they’ve been since March 2009, sooner rather than later.

Before Thursday, the consensus expressed in bond and currency markets was that the first rate increase in almost seven years would happen early in the second quarter of 2015. Carney’s after-dinner bombshell changed that, with economists scrambling to update their forecasts.

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