One question that economists dread at parties is ‘what is going to happen to house prices?’. The sensible answer is ‘I don’t know and I can’t give you investment advice anyway’. But for what it is worth, here are my two hunches. The first is that UK house prices are likely to fall further and … Continue reading How much should we worry about a house price crash?
Tag: interest rates
What Mark Carney got wrong
In a recent interview with the Financial Times, former Bank of England Governor Mark Carney made the striking claim that ‘in 2016 the British economy was 90% the size of Germany’s. Now it is less than 70%’. This claim is garbage, for two reasons. Unfortunately, it is just one of a tsunami of fake statistics … Continue reading What Mark Carney got wrong
Why the Bank of England was right to raise rates
Many people have been baffled by the Bank of England’s decision to raise interest rates by a historically large three-quarters of a point this week, despite forecasting that the UK economy is sliding into recession. I understand this confusion, but there are three reasons why rates had to be increased. First, the job of the … Continue reading Why the Bank of England was right to raise rates
Liz Truss may need to act quickly to reassure the markets – but this won’t be ‘Black Wednesday’
The financial markets are nervous. Investors are demanding a higher yield for holding UK government bonds (‘gilts’) and the pound has continued to slide against the US dollar. It is still too soon to talk of a ‘sterling crisis’. Nonetheless, the heightened political uncertainty and large current account deficit could make UK assets particularly vulnerable … Continue reading Liz Truss may need to act quickly to reassure the markets – but this won’t be ‘Black Wednesday’
Plain-speaking Economics 