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Tag: Bank of England

Optimism rises that 2013 will see more homes sold – that should mean more homes built

Optimism rises that 2013 will see more homes sold – that should mean more homes built

Estate agents are increasingly optimistic that 2013 will see housing transactions rise. That’s encouraging for their books. But if they’re right it’s good news for construction, house builders in particular. Since the late 1970s there’s been a close link between private house completions and overall housing transactions. Roughly, for every ten homes sold one home is built (corrected from first blog) . So the more existing homes are sold the more new homes are built. According to RICS’s latest monthly…

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2013 kicks off with some unwelcome bad news for construction

2013 kicks off with some unwelcome bad news for construction

The sharpest drop in construction output since June 2012 is not the snippet of construction data you would want to read with a fresh new year ahead of you and optimism rising like sap in the spring. Sadly that was the first key point from the latest monthly Markit/CIPS construction survey. It is perhaps ironic that it should be the Markit/CIPS survey providing the first bad news of the year, given that historicaly it tends to be more optimistic than most…

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The extra magic money brings when you get your bank to print it and use it to buy your debt

The extra magic money brings when you get your bank to print it and use it to buy your debt

An exchange of letters between Mervyn King at the Bank of England and George Osborne at the Treasury is causing a bit of excitement among economists and also among in-the-know construction folk. They see a chink of light in the black cloud that is Government capital spending intentions, as the Treasury gets a cash boost of some £20 billion, £30 billion maybe more from the excess cash in the Quantitative Easing pot. It’s an accounting trick that’s raising more than a…

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Construction firms are shedding jobs as they head for a long dark winter, says buyers’ chief

Construction firms are shedding jobs as they head for a long dark winter, says buyers’ chief

Today’s construction indicator released today by Markit/CIPS suggests construction firms performed slightly better in October than in September. The index, which is pegged against a no change mark of 50, was at recorded as 50.9 in October, up from 49.5 in September. But in reality this indicator tends for whatever reasons to run a bit hot, judging by past performance. So a score of 50.9 probably should be seen as negative rather than positive. Interestingly if we plot the Markit/CIPS…

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The real home truth is that the Government can and should do more to boost house building

The real home truth is that the Government can and should do more to boost house building

The National Housing Federation launched its 2012 Home Truths report today. It’s got lots of coverage, probably because it says again what many already know – there’s a housing crisis and it will put even more pressure on the already stressed and strained housing benefit system. We spend more than £20 billion a year on housing benefit in a bid to keep the poorest out of housing squalor. But thousands more working folk are turning to this benefit as rents…

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Beware estate agents selling optimism – the housing market remains in a worrisome state

Beware estate agents selling optimism – the housing market remains in a worrisome state

There was a very upbeat headline given by the RICS press office to the latest housing market survey released today by the surveyors’ body. Judging by various headlines from news outlets, including that on the BBC website, and various tweets I noticed on the subject, the message received by the casual observer appears to be “well that’s all good then”. I was bemused. I can see that less bad may be construed as good in a world of torture. But looking…

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The housing market is in a coma and the drugs don’t work – a bit more verve perhaps?

The housing market is in a coma and the drugs don’t work – a bit more verve perhaps?

The housing market remains in a weird state of suspended animation. There is the odd flinch or twitch to give commentators (myself included) something to remark on and the Daily Express something to splash on its front page. But in reality things have been flat for about two years. Naturally, with prices more or less flatlining, the reality is that houses in real terms are getting cheaper – that is to say the ones that are being sold are on…

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The solution is construction, but the answer is not just any old construction – Part 2

The solution is construction, but the answer is not just any old construction – Part 2

Yesterday’s blog looked at the need to boost construction and the huge benefits the nation gains from focusing on job-intensive work. Today we’ll look at how else we might boost construction to generate economic growth and, interestingly, reduce the deficit. But before that it’s worth noting that favouring job-intensive construction is not just about where to channel public spending. It’s also about how Government frames policy and incentives. Yesterday I received a tweet putting the case for cutting VAT to 5% on repair…

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