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Tag: Bank of England

Why last week’s rise in inflation should not have been a surprise but an important reminder

Why last week’s rise in inflation should not have been a surprise but an important reminder

The Bank of England seems to have taken a kicking in the press following the release last week of the Office of National Statistics estimate for inflation in March. The reports seem to fixate on the uptick to CPI inflation from 3.4% in February to 3.5% in March. This rise did not fit, in the view of many economic commentators, the script written by the Bank of England in its latest Inflation Report. Although in fairness the report did point…

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Average house prices may be stable, but the figures hide trouble

Average house prices may be stable, but the figures hide trouble

Much fuss is made over the monthly ups and downs of housing price indicators. But in reality those released recently suggest the average UK house price remains more or less locked at the steady altitude it has followed for more than a year. Taking a consensus from the plethora of available measures suggests an average home costs you today within 1% (probably 1% less) of what it would have cost a year ago and more or less the same as…

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Why calling for housing QE is not special pleading: Part 2

Why calling for housing QE is not special pleading: Part 2

If growing calls to use quantitative easing to directly stimulate weaker parts of the economy lead to a change in approach by the Bank of England it would leave a tricky question. That’s the question Sir Mervyn King, the Bank’s Governor, threw back at Treasury Committee member Andy Love last week. He asked: “Can you give me an example of the asset you think we should be purchasing. I asked the previous Chancellor and got no reply.” Mr Love gave…

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Why calling for housing QE is not special pleading: Part 1

Why calling for housing QE is not special pleading: Part 1

Over recent months there’s been a growing mood to exploit the power of quantitative easing to accelerate growth in key parts of the UK economy and for the Bank of England to buy other assets other than Gilts – UK Government bonds. Here in Part 1 I’ll be looking at the background to these calls and, in Part 2, I’ll look at why, if we are to experiment further with QE, we should look to housing as the alternative to Gilts…

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Why Construction Products Association is right to push quantitative easing for house building

Why Construction Products Association is right to push quantitative easing for house building

The Construction Products Association has called on the Chancellor to pave the way so that quantitative easing can be exploited to fund house building. And there seems to be growing backing within the construction sector and without for using the quantitative easing machine as means to increase the number of homes being built.

It’s time for Shapps to find a big bazooka

It’s time for Shapps to find a big bazooka

In September 2010 Grant Shapps set a “Gold Standard” against which he, as housing minister, would be judged – to see a house-building rate at least matching that achieved before the recession. There are few targets (political hostages to fortune, perhaps) discernable from the reams of documentation and hours of speeches and statements made by this Government. But this is one. It is important. The consensus is England needs more homes. Sorry, a lot more homes, more even than the previous…

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What is it that I apparently know that the Bank of England economists do not?

What is it that I apparently know that the Bank of England economists do not?

There is a heightened sense of concern over the fragility of the economy after yesterday’s speech by Mervyn King, Governor of the Bank of England and the release of its monetary policy committee minutes today. It all fuels the worry that we really are heading back into the deep doodoo. The downsides are obvious. The upside is that this should help to pull inflation down in the medium term, after a series of “special factors” raised the rate to a level not…

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Why a 1930s style private-sector house-building boom seems highly unlikely

Why a 1930s style private-sector house-building boom seems highly unlikely

As the parallels with the 1930s depression become increasingly unavoidable, I sense a new romantic surge of interest in the notion of a private-sector-led house-building boom driving economic recovery. For those not familiar with the 1930s private house building market, completions in England in 1934 hit almost 290,000. That is near on three time current levels. Never before nor since has there been such numbers of private homes built in England. The public sector was not workshy over that period…

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Here’s what bothers me about inflation – for what it’s worth

Here’s what bothers me about inflation – for what it’s worth

The latest inflation figures show the growth in consumer prices remaining stubbornly high. The CPI index stuck at 4.5% up on a year ago while the RPI measure remained at 5.2%. These are extraordinary figures given that it wasn’t that long ago that fears were being expressed about deflation. But the figures are not that surprising to some. There have been voices suggesting inflationary pressures were far higher than the assessments made by most expert forecasters and the Bank of…

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