With the unemployment rate falling faster than anyone imagined (particularly the BOE and IMF) and UK growth being refreshingly higher than any other country in the Q7, Mr. Carney is using the method of announcing the prospects of higher interest rates ahead of actually doing so.  This has all the advantages of raising interest rates without the disadvantage that it may have on the growth of the economy and confidence.

Mervin King used to do this when he was Governor and it was very effective.  The mere spectre of higher interest rates will start to have the desired effect on controlling the money supply before any changes are implemented. Continue reading →

What a blasted relief to hear that the government is listening to the squeals of anguish about the visceral lack of new homes in the UK.  We need a million of them and we barely build a 100,000.

The big house builders can get funding from either raising capital through the Stock Market, lending institutions or private equity or a mixture of all.  This is ‘fine and dandy’ but the smaller niche developers are left high and dry.  They are barely able to borrow 50-60% of the equity, with interest paid throughout the term, at an effective margin of 6-7%, when entry and exit fees are taken into consideration, and this is before any rise in interest rates. Continue reading →

As if we need any further evidence that as close a relationship as the press would have us believe there is between Cameron and Merkel you can never rely on Germany, or Europe, to ever defend Britain’s interests.

Here is the back drop; Europe is burdened with the following caustic mix of liabilities: a lethargic group of borderline recessionary economies, huge debt, low growth, deflation, high long term unemployment, and yet they still have the temerity to talk about our so called ‘overheated’ property market and that we should be initiating by way of a Mansion Tax or raising Council Tax.  What a cheek! Continue reading →