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?
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