What goes up always comes down
Articles discussed how top end house prices in London are being slashed by 20%. London housing always acts as a wave and we will see this feeding further through London, especially with the silly shoe boxes that are promoted all along the dirty river Thames. What will be interesting is what effect this will have on sentiment. If this feeds into the housing indices and the mood changes to one of 'property always goes up', to 'property is way overpriced' and we should wait until prices come down.
Devaluation on the way - More debt, more interest that tax payers will never be able to repay!
British government borrowing rose more than 10 percent in the first half of the financial year, giving Chancellor George Osborne little scope to offer sweeteners to voters before a parliamentary election in May. Britain's economy has staged a stronger-than-expected recovery since the middle of 2013. But that has not yet translated into a big increase in tax revenues, in large part because slow wage growth has kept a lid on income tax receipts. Revenues from income tax and employment insurance contributions in September, 2.3 percent higher than a year ago. However, for the year to date it was up by just 0.5 percent. Borrowing for September was 15.3 percent higher than a year earlier at 11.8 billion pounds, the Office for National Statistics said.
Debt, Debt, Debt, Debt and more Debt!
The Bank of England is now expected to defer any increase in its policy interest rate till at least next autumn to maintain momentum in household consumption, business investment and construction, in the expected absence of strong demand for British goods and services from abroad. Domestic demand will become even more important to growth and making sure inflation does not fall too much further below its 2% target than it is today. Stimulating domestic demand at this stage of the recovery brings risks - especially because the UK has a record current account deficit, or gap between the income it receives from the rest of the world and what it pays the rest of the world. This deficit has now been more than 5% for three out of the last four quarters - and is wider than since records began.
Bye Bye Inheritance
Pensioners in their sixties and seventies in particular were turning to equity release, an expensive type of borrowing which typically lasts for life. Industry figures show the sum lent each day to the over-55s reached a record high between July and September this year, âRising house prices also mean that customers have a growing pool of equity at their disposal.â In the early Nineties, a man aged 65 could have turned Â£100,000 into a lifetime income of more than Â£15,000 a year by buying an annuity. Today, someone of that age would be offered nearer Â£6,000. The research found 27 per cent of people wanted to give money to family members, particularly grandchildren who were struggling to get on to the property ladder themselves. Spending it before the government tax it?
House prices ''going to the Moon''
UK's debt fuelled Ponzi growth to overtake Chinas by 2017
Up until a few years ago, conventional wisdom was that China would grow at nearly double digits as long as the eye could see. Then, however, something happened, and China's 9% growth became 8%, then 7% and even lower, as suddenly the Politburo made it quite clear China would not chase growth at any cost, especially when the cost is trillions in bad debt and other NPLs, as we have explained time and again. China's growth will slow sharply during the coming decade to 3.9% as its productivity nose dives and the countryâs leaders fail to push through tough measures to remake the economy, according to a report expected to come out Monday.
Whilst U-turn Dave and Cable ponce about..
Investors are concerned about the future stability of Britainâs business environment, warning of a âhuge uncertainty shockâ if the UK leaves the European Union, or ends up with another coalition government after next yearâs general election. In a new report published on Monday, the EY âITEM Clubâ predicts that growth investment in the UK will fall from 9 percent to 5.8 percent, while GDP growth will fall from 3.1 percent to 2.4 percent. The ITEM report also notes that the UK economy may find itself in a slump due to falling real wages, as the Bank of England pursues its low inflation strategy to keep the economy growing.
Bullish for slumlords?
Social Mobility and Child Poverty Commission report predicts number of households in absolute poverty will rise by one third this decade. It suggests that the link between effort and reward, on which social mobility relies, has been broken by changes in the housing market â with home ownership rates halving among young people in 20 years â and the labour market â with 5 million workers trapped in low pay.
Spare a penny Mr.Scrooge
Homeowners with property valued at Â£2m to Â£3m will face an extra tax bill of Â£3,000 a year if Labour comes to power. The new charge, along with an annual profit tax on tobacco company profits, would raise a combined Â£2.5bn a year, Labour estimates, which would be earmarked to pay for more spending on the National Health Service.