"Although ministers argued that the cap would curb the £20bn a year housing benefit bills and drive down rents, a surge in number of private sector rents in even the cheapest areas of London means benefit spending in the capital is continuing to rise.
The report says: "Low income working households in London are, in large numbers, in need of public subsidy to maintain themselves in accommodation in the city in which they work."
The buoyant rental market in central London means that landlords are refusing to drop rents below benefit cap levels, and increasingly are choosing not to let properties to people who are in receipt of benefits, the report says. The effect is to push up rents across the capital.
The biggest rent rise between March 2012 to March 2013 was in the borough of Richmond, west London (up 31%). But it was inner London where increases in the lowest quartile rents were most concentrated, up 23% in Wandsworth, 21% in Tower Hamlets, and 18% in both Hackney and Kensington and Chelsea.
There is evidence welfare changes are triggering an exodus to the suburbs of poorer families from the centre, where the highest concentrations of private rented stock are located. There was a 9% rise in the number of LHA claimants in outer London in the year March 2012 to March 2013, and a 2% fall in inner London claimants over the same period.
Jules Pipe, the chair of London Councils, said the government was in danger of creating a chaotic system where the only beneficiaries were landlords and letting agents."
As we discussed a couple of days ago, the rise in rental yields on property mainly results from post financial crisis falls in house prices and the decline in mortgage lending which, in combination, has led to illiquidity in the residential property sales market.
Commercial landlords gain a return on their investment from a combination of capital appreciation of property values and from rents.
In the five years between 2002 and 2007, residential property increased in value by 84.4% (71% in London) or at an annual rate of 13.1% (11.4%). Inflation over the same period (CPI) was an annual average of 2.4% or 12.5% over the five year period.
So £100.000 of residential property bought at the beginning of 2002 would have increased in value to £184,400 by the end of 2007. A basket of goods and services equivalent in balance to those making up the CPI and costing £100,000 in 2002 would have cost £112,500 at the end of 2007. The premium return over inflation to the property investor in the Brown "boom" would have been £71,900 or 71.9%.
Now let's take the period 2007 to 2012.
In the UK £100,000 of residential property bought at the beginning of 2007 would have increased in value to £107,200. In London, because property values fell faster than in the rest of the UK during the financial crisis (Index UK 171.9 vs London 153.8), the rebound was greater: from £100,000 to £121,900. CPI would have inflated the £100,000 to £123,100 over the same period.
So a Landlord owning a property during the last five years would have lost capital value in real terms, to the tune of nearly 16% outside London and 1.2% in London. The inevitable consequence has been the pushing up of rents to compensate for the losses in capital returns.
Because, in the Brown years, the massive above inflation rises in property values allowed rents to become underpriced, the recent rises in rent have been even higher than would have been the case had Brown had not pumped the property bubble to bursting point.
What is happening in London with rental properties and housing benefits is a direct consequence of the distortions to a normal property market caused by the pre-2007 boom and the fallout from the 2008-9 bust.
Labour may wish to blame "landlords and letting agents" for the rises in rent but they are purely responding to current market pressures.
Osborne is pursuing exactly the right policies in the housing market. The lending schemes are designed to return liquidity to the housing market; to stimulate demand by giving temporary support to first time and first move purchasers; to stimulate supply by easing mortgage finance constraints; to stimulate new building by stabilising market conditions; and. last but not least. to stimulate the recovery of property values.
Getting a properly functioning and balanced housing market is far more likely result in rental rates finding their appropriate levels. Embarking on a massive programme of new building financed by additional government borrowing without fist stablisiing the existing market would only exacerbate current problems.
Understanding this is the true genius of George Osborne.
Hunchman has changed his mind - mark the date 22nd May 2013. It is looking more and more likely that that was the end of the 4 and a bit year rally from March 2009:
10yr gilt has gone up by around 100 basis points (1%) - funding was so cheap, and so many of the Keynsian clap-trap economists were encouraging us to borrow even more, what charlatans they are looking right now. And all too predictably, Jeffrey Osborne's strategy predicated on gilt yields remaining low is beginning to fall apart (the technical charts said loud and clearly that he was going to be proved wrong). Investors in the early stages of rising yields have classically confused them for rising inflation (and growth) expectations. Rising rates will soon snuff out any (supposed) recovery in the housing market. Well the data is hardly delivering is it?! Rather, the rising yields are a sign of deflationary pressures rising, where everything is starting to get sold off in the desperate scramble for cash, whether that is equities, bonds or commodities. QE is facing the classic law of diminishing returns. Bernanke, Carney and all the other central bankers around the world know only too well that tapering (or the mere mention of it) is enough to spook the markets right now. There simply is no way of gently deflating a bubble that even the central bankers now acknowledge has occurred. I'm looking on my favoured scenario for a bottom ideally to form around 1535-1540 on the S&P (now 1588), before we rally into late July. Then some stronger downward action that what we've had over the past month can begin.
And China continues to send out some ominous warnings, alongside Japan:
Harper obviously lacks the precise footwork and matchless poise of a morris dancer. I hope he makes a swift recovery.
Thanks MD. Looking forward to Silverstone this weekend, going to be a fascinating race as always. Not too hopeful for Lewis and Mercedes, think the more abrasive surface isn't going to suit them - hope I'm wrong. I fancy the lighter tyre usage cars - Lotus and Ferrari - to do well this weekend - lets see.
Can't wait for a week tomorrow when going to Wimbledon for mens quarter finals day too, albeit on Court 1. Should get to see one of the big 3 left now all being well - probably the Djok?
What is proposed - letting the rail franchises lapse and go back into public ownership - is not nationalisation of the railways in the form most people think of it (or indeed any form).
I am not anti renationalisation: I would just want to make darned sure that we do not throw the baby out with the bathwater. Privatisation has been a success on three counts in my mind: 1) A massive amount of new rolling stock (albeit after a new order moratorium in the run-up to privatisation). 2) Massively increased passenger numbers. 3) A massive increase in railfreight tonnage and mileage, despite a reduction in traditional bulk loads such as coal.
Some of these may have occurred under the old BR nationalised system; some would not, and certainly to the same scale. (All are from memory, I hope they are right).
Any new scheme should attempt to continue these trends and not stall them.
The other thing to remember with the railways (as I understand it) is that the partition of rail providers from track providers was pursuant to an European directive aimed at cross-border trains and train companies.
I think that privatisation of the railways was correct in principle but we're still getting it right in terms of implementation; that to a considerable extent the original privatisation was rushed (or simply badly handled, I don't know).
"Getting a properly functioning and balanced housing market is far more likely result in rental rates finding their appropriate levels. Embarking on a massive programme of new building financed by additional government borrowing without fist stablisiing the existing market would only exacerbate current problems.
Understanding this is the true genius of George Osborne. "
Avery - that could have come straight out of CCO! How you can view the NewBuy scheme, the FirstBuy Equity Loan scheme and HomeBuy direct as stabilising the housing market? Any Conservative of repute knows that central planning in anything (whether its central planning of money by central banks) or central planning of the property market courtesy of HM Government is going to end very very badly indeed. We've already had colossal misallocation of capital into unproductive sectors of the economy including principally the property market. And the fact that your friend Jeffrey is encouraging even more of it is proof enough to me that he is a million miles from the perspective of an Austrian economist and libertarian.
Interesting F1 comments. I hadn't considered the surface, but if it is more abrasive then your forecast would seem likely. Lotus reckon they have a big update coming which should help a bit. Oh, and Force India could be aiming for a first podium. They've been very impressive this year.
Today I have earned my 2nd £50 from YouGov. It took over 4 years to earn the 1st £50 but only 13 months to earn the 2nd. Many thanks to whichever PBer it was all those years ago that suggested it on a thread one day.
Met Police bugged Stephen Lawrence's friend Duwayne Brooks and his lawyer - a year *after* the Macpherson report http://www.bbc.co.uk/news/uk-23048266 …
Interesting F1 comments. I hadn't considered the surface, but if it is more abrasive then your forecast would seem likely. Lotus reckon they have a big update coming which should help a bit. Oh, and Force India could be aiming for a first podium. They've been very impressive this year.
Thanks. I'd like to see Di Resta get on the podium. I also feel its time at the end of this season, if he can, to engineer a move to one of the big boys. Will be very interesting to see how Force India go at Belgium and Italy - low downforce tracks - that they have been traditionally strong at, providing they can keep up with the development race during the European part of the season.
Mick Pork - agree that more is to come on Lawrence. Its simply staggering what has (apparently) gone on there. I haven't been around the Kidbrooke area for a long time (having campaigned in Eltham in 1997), if anything is going to reopen the scars after 20 years, then this is it. Clive Efford made some very sensible comments yesterday on the whole subject.
Di Resta's fast but rather quick to blame his team. I feel sorry for Hulkenberg, who appears to have jumped ship, and landed on a deck moments before it burst into flames.
"The party of mean angry bigots, say teachers who oppose same-sex marriage could face disciplinary action if they speak out against it, under government plans to legalise gay weddings,"
What an eccentric attempt to crowbar a story from two years ago into "recent events". It certainly speaks volumes about partisanship.
Meanwhile enjoy this powerful refutation to the bitter and twisted.
Di Resta's fast but rather quick to blame his team. I feel sorry for Hulkenberg, who appears to have jumped ship, and landed on a deck moments before it burst into flames.
I don't mind that from Di Resta - more of the Italian blood coming through that the dour Scottish side me thinks!
"Getting a properly functioning and balanced housing market is far more likely result in rental rates finding their appropriate levels. Embarking on a massive programme of new building financed by additional government borrowing without fist stablisiing the existing market would only exacerbate current problems.
Understanding this is the true genius of George Osborne. "
Avery - that could have come straight out of CCO! How you can view the NewBuy scheme, the FirstBuy Equity Loan scheme and HomeBuy direct as stabilising the housing market? Any Conservative of repute knows that central planning in anything (whether its central planning of money by central banks) or central planning of the property market courtesy of HM Government is going to end very very badly indeed. We've already had colossal misallocation of capital into unproductive sectors of the economy including principally the property market. And the fact that your friend Jeffrey is encouraging even more of it is proof enough to me that he is a million miles from the perspective of an Austrian economist and libertarian.
I don't think Osborne sees himself as a pure "Austrian economist and libertarian", certainly not in office as Chancellor, as opposed to his personal political and economic views.
The Chancellor's role is managerial, consensus driven and risk averse. We are not voting Osborne into office to play the casino tables. He is there to manage the UK economy as an ongoing economy in an stable environment forecast to develop on a "most likely" basis.
We are not asking our Chancellor to impose radical solutions to the economy on the basis of adherence to a particular economic orthodoxy or on the basis of forecast outcomes of extreme variance to the international political consensus.
Hunchman, you and others, are quite free to invest at your own risk on the basis of such theories and forecasts and good luck and rewards to you if you get it right. But much as I love your contributions to pb I wouldn't want to see you occupying No 11 Downing Street!
As to central planning, I am as opposed in principle to its methods as anyone. Particularly as I have spent a large part of my working life seeing its ill effects in Central and Eastern Europe. But I am still not an absolutist. A belief in free markets doesn't exclude the value of all or any governmental intervention and planning.
I see the score as Hayek 7 Keynes 3 not a 10-nil rout!
"I wouldn't want to see you occupying No 11 Downing Street!"
Don't worry, that's the last place I'd want to be right now! There will be a horrendous crash right ahead, irrespective of who is there. So as much as I like making fun of Jeffrey, he really has an impossible job - the demographic and social mood cocktail see to that.
I still think that AfD could shock and surprise, and get over the critical 5% barrier, if the events of August play out as I expect them to. Its going to be a fascinating election. Bring on the 22nd September!
Evening all. Thought I'd better check back in before the Ashes. Thought Aberdeen Donside was worrying for Labour. They need to be winning by-elections if they want to beat the SNP in 2016.
What is the point of T20Is with the entire first team missing?
Hmm! That is an interesting one. Not sure why being in the EU makes a difference, but shall catch newsnight to find out. Devilishly cunning these immigrant gypsy cats!
Italy court finds Berlusconi guilty on sex charges
(Reuters) - A Milan court sentenced Italian former prime minister Silvio Berlusconi on Monday to seven years in prison after convicting him of paying for sex with a minor but he will not have to serve any jail time before he has exhausted appeals
I think is speaks highly of Salmonds character, sticking by his friends, even when they have to resign in disgrace as a result of a sex scandal. Good on him!
Mr. Fletcher, nice to see you on. Is the Ashes about a fortnight away?
Mr. Pork, a news report I saw suggested this won't help the stability (such as it is) of the Italian Government, of which Berlusconi's party is a member [think I heard that correctly].
Evening all. Thought I'd better check back in before the Ashes. Thought Aberdeen Donside was worrying for Labour. They need to be winning by-elections if they want to beat the SNP in 2016.
What is the point of T20Is with the entire first team missing?
What's the point of T20Is when we keep on selecting Jade Dernbach.
Was that the first time he wasn't the most expensive bowler in the team?
I think is speaks highly of Salmonds character, sticking by his friends, even when they have to resign in disgrace as a result of a sex scandal. Good on him!
" Judge a man by the friends he keeps. "
Cardinal Keith O'Brien , " Sir " Rupert Murdoch , Sir Brian Souter , ex - Sir Fred Goodwin , Donald Trump........
I always enjoy your comments but I don't agree. It seems to me that the UK economy is stabilising in a number of respects and is on course to grow only slightly below trend this year. I think we will see the first real rise in construction since the Olympic building program finished driven by domestic housebuilding on the back of Osborne's interventions to improve liquidity.
The markets may well be volatile and I am still nervous that we are at risk of another spin of the EZ roulette wheels with a possible credit crunch yet again as the cheap credit from the US dries up but the situation does not feel anything like late 2007 to me.
My guess this week is that Osborne will have found some leeway for modest capital spending but will also look to suggest that borrowing this year is going to come in well below forecast. He will emphasise the importance of keeping spending tight notwithstanding this for political as well as economic reasons. He seems to be working on getting a grip of what is perversely called managed expenditure which is not before time.
Why did you post that, Is Salmond a friend of Berlusconi?
He's very good friends with Monica's favourite politician and Cammie's role model.
Like all great political friendships, the one between Blair and Berlusconi was troubled by the odd frisson. But Italian and British officials alike will attest that the rapport between them was real. Someone present at one of their convivial encounters told the Guardian that Berlusconi had been quite unable to contain his admiration for the British leader.
"You know, Tony?" he blurted out. "If you were a woman, I'd ask you to marry me." According to the source, Blair replied: "You know, Silvio? If you were as rich as you are, I think I'd accept."
What is proposed - letting the rail franchises lapse and go back into public ownership - is not nationalisation of the railways in the form most people think of it (or indeed any form).
I am not anti renationalisation: I would just want to make darned sure that we do not throw the baby out with the bathwater. Privatisation has been a success on three counts in my mind: 1) A massive amount of new rolling stock (albeit after a new order moratorium in the run-up to privatisation). 2) Massively increased passenger numbers. 3) A massive increase in railfreight tonnage and mileage, despite a reduction in traditional bulk loads such as coal.
Some of these may have occurred under the old BR nationalised system; some would not, and certainly to the same scale. (All are from memory, I hope they are right).
Any new scheme should attempt to continue these trends and not stall them.
London Overground was effectively the old Silverlink Metro service renationalised under TfL.
I think is speaks highly of Salmonds character, sticking by his friends, even when they have to resign in disgrace as a result of a sex scandal. Good on him!
" Judge a man by the friends he keeps. "
Cardinal Keith O'Brien , " Sir " Rupert Murdoch , Sir Brian Souter , ex - Sir Fred Goodwin , Donald Trump........
I accept that he does not always choose his friends wisely, but loyalty through thick and thin is a laudable trait. A sort of Scottish Chumocracy, only based on pursuit of power rather than old school tie.
Did you object to me crowbarring a decade old reference to the The Nasty Party when I did that in a nighthawks a few months ago?
No, I thought not.
*tears of laughter*
THAT'S your excuse?
I should have noticed when you included one reference months ago?? Have you been drinking?
LOL
Was it linked to a two year old story or did you merely just bring yourself to just say "the nasty party" once a few months ago and actually expect that to make your blatantly obvious bias fine?
You really are the most utterly predictable PB tory.
Lord Myners now saying that Labour's planned capital spending cuts were just pretend plans.They werent meant to be taken seriously.
In fairness how did anyone take any of Labour's economic plans seriously when they wouldn't even have a spending review as it might force them to make some actual decisions? Labour so got away with that at the last election, it was incredible. The election was fought on tory plans as if they were already the government. Bet it won't be like that in 2015.
"The party of mean angry bigots, say teachers who oppose same-sex marriage could face disciplinary action if they speak out against it, under government plans to legalise gay weddings,"
What an eccentric attempt to crowbar a story from two years ago into "recent events". It certainly speaks volumes about partisanship.
Meanwhile enjoy this powerful refutation to the bitter and twisted.
That is such a positive, feel good advert that I think we should have it played every few days when things get too grumpy on here just to remind people there are more important things in life than arguing amongst ourselves.
Yes but it takes some cheek to criticise a Government for doing more or less what you had planned to do and then turn around and say that the plans werent serious.
It was Lansley's job to take all relevant factors into account when deciding on dismissal.
Such factors would include any litigation that had risen or may in future arise out of making the decision.
It appears that Lansley did make the right decision. How he got there and the ebb and flow of the argument for and against is really irrelevant. Just part of the job.
"The party of mean angry bigots, say teachers who oppose same-sex marriage could face disciplinary action if they speak out against it, under government plans to legalise gay weddings,"
What an eccentric attempt to crowbar a story from two years ago into "recent events". It certainly speaks volumes about partisanship.
Meanwhile enjoy this powerful refutation to the bitter and twisted.
That is such a positive, feel good advert that I think we should have it played every few days when things get too grumpy on here just to remind people there are more important things in life than arguing amongst ourselves.
That is such a positive, feel good advert that I think we should have it played every few days when things get too grumpy on here just to remind people there are more important things in life than arguing amongst ourselves.
Perhaps it works better in German, but its telling that Merkel's scepticism raises this question "What is wrong with the CDU leader?"
You're right to be wary. That reads like a mistranslation of "Was ist los mit Frau Merkel?" - which in this context means "What is the CDU leader up to?" or, more neutrally "What is happening to the CDU leader?"
How he got there and the ebb and flow of the argument for and against is really irrelevant. Just part of the job.
That excuse just won't cut it for long in either that case or the many cases coming down the tracks on that issue and several more. That labour has much to fear too won't make the fallout any less toxic for those found to be involved.
Are you suggesting that MP's should not vote with their conscience whether that might be against the current mood?
I would far rather my MP voted according to his conscience than to party dictat. I would respect him or her for that even if I thought he or she was wrong.
As it happens, I think Marriage is, was and always will be solely between a man and a woman, but people are free to disagree with me without being categorised as swivel eyed loons.
I still think that AfD could shock and surprise, and get over the critical 5% barrier, if the events of August play out as I expect them to. Its going to be a fascinating election. Bring on the 22nd September!
No, AfD is regularly in German polls, but only gets 2-3%, half of what they need. A more interesting development is that the FDP have been nudging towards the 5% barrier, making it conceivable, though still unlikely, that the current coalition could survive.
but people are free to disagree with me without being categorised as swivel eyed loons.
No doubt kippers are just as upset at being categorised as "fruitcakes, loonies and closet racists" as the tory activists were for "mad, swivel eyed loons" but your beef is with the chumocracy and their amusingly high handed manner when they are busy shooting themselves in the foot.
I find it instructive to remind tories that they can complain all they like about labels but Cameron got there first.
A fascinating assessment of the current Tory Modernisers by a former Thatcher Advisor:
Before refashioning its image, the party will need to re-find itself. It must re-create its membership, which has collapsed. It must establish a working relationship with UKIP, those "fruitcakes, loonies and closet racists", who are now, in truth, the Tory Party in exile.
Just seen on the GENSHEET Yahoo Group that it looks like the brand new Hitchin Flyover is open for (albeit a few) London to Letchworth rail services! Hopefully all Cambridge line services will be using it before long!
Are you suggesting that MP's should not vote with their conscience whether that might be against the current mood?
I would far rather my MP voted according to his conscience than to party dictat. I would respect him or her for that even if I thought he or she was wrong.
As it happens, I think Marriage is, was and always will be solely between a man and a woman, but people are free to disagree with me without being categorised as swivel eyed loons.
The sight of Pork's increasingly fevered attempts to start a fight no-one can be arsed to have with him does illustrate how clever and funny the "only gay in the village" gag in Little Britain was.
but people are free to disagree with me without being categorised as swivel eyed loons.
No doubt kippers are just as upset at being categorised as "fruitcakes, loonies and closet racists" as the tory activists were for "mad, swivel eyed loons" but your beef is with the chumocracy and their amusingly high handed manner when they are busy shooting themselves in the foot.
I find it instructive to remind tories that they can complain all they like about labels but Cameron got there first.
I have no love for Cameron (of either the platonic or the hot rumpy pumpy type :-) ) but I think in this case there was simply no way he was going to be able to get the equal marriage bill through without antagonising that large portion of his party. Whilst I agree that many of his decisions are high-handed and elitist, in this case there was simply no middle ground on which he could negotiate. He had to make the decision as to whether the bill was important enough to put up with annoying his MPs. He made the right decision.
I always enjoy your comments but I don't agree. It seems to me that the UK economy is stabilising in a number of respects and is on course to grow only slightly below trend this year. I think we will see the first real rise in construction since the Olympic building program finished driven by domestic housebuilding on the back of Osborne's interventions to improve liquidity.
The markets may well be volatile and I am still nervous that we are at risk of another spin of the EZ roulette wheels with a possible credit crunch yet again as the cheap credit from the US dries up but the situation does not feel anything like late 2007 to me.
My guess this week is that Osborne will have found some leeway for modest capital spending but will also look to suggest that borrowing this year is going to come in well below forecast. He will emphasise the importance of keeping spending tight notwithstanding this for political as well as economic reasons. He seems to be working on getting a grip of what is perversely called managed expenditure which is not before time.
Thanks David. I respectfully disagree. I'm surprised Labour haven't made more of the news in the past few days that government borrowing did indeed increase in the past year, following the c.£2.5bn revision lower to borrowing in 2011/12 fiscal year - a revision in the right direction but not helpful to the CoE. But rising bond yields in a hugely indebted economy, I have always argued, is the ingredient that will bring the house crashing down. Bond yields in the US bottomed around November 2012 - it always takes a while for this to take effect. The reverse was true in the early 1980's when the US 30 year note topped out at around 13% yield in October 1981, with the final bottom on the Dow coming in August 1982 ie a 10 month lag. Its a similar lag this time, but in the reverse direction (not that rising rates are always a problem for the stockmarket - the whole post-war rally from 1949 to 1966 took place against a backdrop of rising rates, not a great problem when overall debt is low). Unfortunately one can't say that about our debts today.
A 1% rise in the 10 year gilt yield from 1.43% at the bottom, to around 2.4% now is a huge negative as far as the public finances go. Last year we spent $40bn or so just servicing the debt interest - the annual gilt issuance needs to be around £170bn to meet the PSBR plus rolling over maturing debt of around £50bn. Assuming the DMO is still going to issue on an average maturity of about 14 years, that's a net extra cost of around £20bn over the lifetime of the debt on present value terms. So the £11.5bn of cuts that Mr Osborne has announced won't be nearly enough.
And the last month has shown enough bombs waiting to go off - China, Japan, Italy, Spain etc. These are not small countries like Cyprus that can be just brushed under the carpet. When number 2 and number 3 are on the precipice, the whole deck of cards that is the world economy won't take long to follow. Plus you should be worried that lumber has fallen by 25% since the start of February, copper the great bellweather for the world economy has been falling since then as well. Good old Dr Copper, the PhD of economic commodities is telling you something very important - the world economy is not at all healthy. If the hyperinflationists are right then everything should be skyrocketing to the moon, not least gold and silver. Its not happening, even with $85trn monthly of QE in the US, 2.5 times the relative size of QE to the Japenese economy, the open market transaction promises of Mario Draghi and the ECB, plus our own £375 bn QE program. The great rubber dinghy that is the world economy is slowly losing air (credit) despite the massive QE as credit defaults are outrunning the QE injections - note that Everbright Bank which missed its debt repayment 10 days or so ago setting off all the interbank lending market worries in China was just such a case in point. Where would the UK economy be now without QE? Remember virtually everyone back in 2009 saying that interest rates would have been normalised by now, and that the initial QE would have been unwound. Well that simply hasn't happened, we're on continued life support, hopelessly addicted to the crack of QE, and now the medicine isn't even achieving its intended purpose of inflating away the debt. And now, slowly but surely, central banks are losing control of bond yields, which is an absolute must to keep the ship on an even keel. Not that the world's cental banks can control anything long term. That much has been proven time and time again.
A fascinating assessment of the current Tory Modernisers by a former Thatcher Advisor:
Before refashioning its image, the party will need to re-find itself. It must re-create its membership, which has collapsed. It must establish a working relationship with UKIP, those "fruitcakes, loonies and closet racists", who are now, in truth, the Tory Party in exile.
The Daily Mail has given its front page to the story from Stafford of the NHS whistleblower:
"An NHS campaigner has fled her home town following death threats, abuse and the desecration of her mother’s grave. Julie Bailey, who helped expose the horrific neglect at Stafford Hospital which cost up to 1,400 lives, says ‘vipers’ have victimised her ever since she set up Cure the NHS.
"Up to 120,000 British pensioners living in hot countries to lose winter fuel allowance - full story in The Sun tomorrow"
Putting aside for the moment the question of whether or not we should be paying these sorts of benefits to ex-pats (a question on which I am undecided), I do have to wonder how they will work out what are 'hot countries' as far as winter goes. Both Greece and Spain are notorious for their cold weather and sub-zero temperatures in winter in their interiors so I am not sure how one could say that the payments were not needed by those who do not live on the coast.
in this case there was simply no middle ground on which he could negotiate.
You could say the same about Lords Reforms with the crucial difference that there labour were happy to help the tory backbenches torpedo the tory leadership and thus bring on the collapse of boundary changes labour wanted.
Point being that if you rely on the opposition and the lib dems to push an issue through then don't be surprised when you turn around and find your backbenchers grinding their teeth in anger. Lashing out in such a counterproductive manner is also hardly very bright just because you couldn't persuade those backbenchers or your grassroots of the wisdom of your position. That persuading should have been done long before the vote. Not for cosmetic reasons (such as Osbrowne wanted) but because Cammie has a duty to his party and his successors not to split the grassroots and MPs any more than is necessary. He's merely building up problems that will come back in some other form. Even If he somehow manages to avoid the full force of it this side of the election he or his his successor will not be so lucky afterwards.
You have to lead your party yet that doesn't just mean getting the whips to do all the dirtywork or using the lib dems and labour to ram something through.
There's going to be a reckoning for the tory party after the coalition. It's almost certain to manifest itself over staying IN or OUT of the EU though it will be deeper than even that.
It was the right decision. That doesn't mean how the decision was made is irrelevant.
This has been announced before. It presumably refers to a temperature test for the payment. It will be interesting to see how the temperature test works!
This has been announced before. It presumably refers to a temperature test for the payment. It will be interesting to see how the temperature test works!
'Interesting' is one way to put it.
Let's have a look at previous 'temperature test' master strategies.
'Pasty lover' David Cameron defends VAT hike
David Cameron has said he "loves a hot pasty", but defended the decision to slap VAT on all sales of the snack.
The prime minister told a press conference ministers had to make sure the rules were "fairly applied".
He said small businesses had paid the tax on their takeaway food for 20 years, but big supermarkets had not.
The move, announced in the Budget and dubbed the "pasty tax", would see all food sold "above ambient temperature" carrying 20% VAT.
It is not charged on most food and some drinks - which are described as "zero-rated" - but it is payable on takeaway food sold to be eaten hot.
However, baked goods which are put on display warm and subsequently cool down are also zero-rated, and the government says some retailers and bakeries have argued their food is sold hot to improve its appearance, or to comply with health and safety regulations - not for consumption that way - and therefore should not attract VAT.
I always enjoy your comments but I don't agree. It seems to me that the UK economy is stabilising in a number of respects and is on course to grow only slightly below trend this year. I think we will see the first real rise in construction since the Olympic building program finished driven by domestic housebuilding on the back of Osborne's interventions to improve liquidity.
The markets may well be volatile and I am still nervous that we are at risk of another spin of the EZ roulette wheels with a possible credit crunch yet again as the cheap credit from the US dries up but the situation does not feel anything like late 2007 to me.
My guess this week is that Osborne will have found some leeway for modest capital spending but will also look to suggest that borrowing this year is going to come in well below forecast. He will emphasise the importance of keeping spending tight notwithstanding this for political as well as economic reasons. He seems to be working on getting a grip of what is perversely called managed expenditure which is not before time.
Thanks David. I respectfully disagree. I'm surprised Labour haven't made more of the news in the past few days that government borrowing did indeed increase in the past year, following the c.£2.5bn revision lower to borrowing in 2011/12 fiscal year - a revision in the right direction but not helpful to the CoE. But rising bond yields in a hugely indebted economy, I have always argued, is the ingredient that will bring the house crashing down. Bond yields in the US bottomed around November 2012 - it always takes a while for this to take effect. The reverse was true in the early 1980's when the US 30 year note topped out at around 13% yield in October 1981, with the final bottom on the Dow coming in August 1982 ie a 10 month lag. Its a similar lag this time, but in the reverse direction (not that rising rates are always a problem for the stockmarket - the whole post-war rally from 1949 to 1966 took place against a backdrop of rising rates, not a great problem when overall debt is low). Unfortunately one can't say that about our debts today.
A 1% rise in the 10 year gilt yield from 1.43% at the bottom, to around 2.4% now is a huge negative as far as the public finances go. Last year we spent $40bn or so just servicing the debt interest - the annual gilt issuance needs to be around £170bn to meet the PSBR plus rolling over maturing debt of around £50bn. Assuming the DMO is still going to issue on an average maturity of about 14 years, that's a net extra cost of around £20bn over the lifetime of the debt on present value terms. So the £11.5bn of cuts that Mr Osborne has announced won't be nearly enough.
And the last month has shown enough bombs waiting to go off - China, Japan, Italy, Spain etc. These are not small countries like Cyprus that can be just brushed under the carpet. When number 2 and number 3 are on the precipice, the whole deck of cards that is the world economy won't take long to follow. Plus you should be worried that lumber has fallen by 25% since the start of February, copper the great bellweather for the world economy has been falling since then as well. Good old Dr Copper, the PhD of economic commodities is telling you something very important - the world economy is not at all healthy. If the hyperinflationists are right then everything should be skyrocketing to the moon, not least gold and silver. Its not happening, even with $85trn monthly of QE in the US, 2.5 times the relative size of QE to the Japenese economy, the open market transaction promises of Mario Draghi and the ECB, plus our own £375 bn QE program. The great rubber dinghy that is the world economy is slowly losing air (credit) despite the massive QE as credit defaults are outrunning the QE injections - note that Everbright Bank which missed its debt repayment 10 days or so ago setting off all the interbank lending market worries in China was just such a case in point. Where would the UK economy be now without QE? Remember virtually everyone back in 2009 saying that interest rates would have been normalised by now, and that the initial QE would have been unwound. Well that simply hasn't happened, we're on continued life support, hopelessly addicted to the crack of QE, and now the medicine isn't even achieving its intended purpose of inflating away the debt. And now, slowly but surely, central banks are losing control of bond yields, which is an absolute must to keep the ship on an even keel. Not that the world's cental banks can control anything long term. That much has been proven time and time again.
Average maturity of UK government debt is c. 14 years. US it is 6 years. Clearly normal interest rates will hurt over time, but it's not a near term issue (it's been a boost for Osborne rather than a negative unless it overshoots vs the baseline assumpion HMT made which, I think, was 3%).
More of an issue is the impact on house prices as the last of the cheaper deals rolls over (I'm thinking the early 2008 deals, refi'ed in 2011 and now coming up in 2013/4, especially the IO ones)
Labour will have to use a montage of videos of George and Dave saying how important low interest rates were and what a vote of confidence in their policies they were in the near future.
I always enjoy your comments but I don't agree. It seems to me that the UK economy is stabilising in a number of respects and is on course to grow only slightly below trend this year. I think we will see the first real rise in construction since the Olympic building program finished driven by domestic housebuilding on the back of Osborne's interventions to improve liquidity.
The markets may well be volatile and I am still nervous that we are at risk of another spin of the EZ roulette wheels with a possible credit crunch yet again as the cheap credit from the US dries up but the situation does not feel anything like late 2007 to me.
My guess this week is that Osborne will have found some leeway for modest capital spending but will also look to suggest that borrowing this year is going to come in well below forecast. He will emphasise the importance of keeping spending tight notwithstanding this for political as well as economic reasons. He seems to be working on getting a grip of what is perversely called managed expenditure which is not before time.
Thanks David. I respectfully disagree. I'm surprised Labour haven't made more of the news in the past few days that government borrowing did indeed increase in the past year, following the c.£2.5bn revision lower to borrowing in 2011/12 fiscal year - a revision in the right direction but not helpful to the CoE. But rising bond yields in a hugely indebted economy, I have always argued, is the ingredient that will bring the house crashing down. Bond yields in the US bottomed around November 2012 - it always takes a while for this to take effect. The reverse was true in the early 1980's when the US 30 year note topped out at around 13% yield in October 1981, with the final bottom on the Dow coming in August 1982 ie a 10 month lag. Its a similar lag this time, but in the reverse direction (not that rising rates are always a problem for the stockmarket - the whole post-war rally from 1949 to 1966 took place against a backdrop of rising rates, not a great problem when overall debt is low). Unfortunately one can't say that about our debts today.
A 1% rise in the 10 year gilt yield from 1.43% at the bottom, to around 2.4% now is a huge negative as far as the public finances go. Last year we spent $40bn or so just servicing the debt interest - the annual gilt issuance needs to be around £170bn to meet the PSBR plus rolling over maturing debt of around £50bn. Assuming the DMO is still going to issue on an average maturity of about 14 years, that's a net extra cost of around £20bn over the lifetime of the debt on present value terms. So the £11.5bn of cuts that Mr Osborne has announced won't be nearly enough.
And the last month has shown enough bombs waiting to go off - China, Japan, Italy, Spain etc. These are not small countries like Cyprus that can be just brushed under the carpet. When number 2 and number 3 are on the precipice, the whole deck of cards that is the world economy won't take long to follow. Plus you should be worried that lumber has fallen by 25% since the start of February, copper the great bellweather for the world economy has been falling since then as well. Good old Dr Copper, the PhD of economic commodities is telling you something very important - the world economy is not at all healthy. If the hyperinflationists are right then everything should be skyrocketing to the moon, not least gold and silver. Its not happening, even with $85trn monthly of QE in the US, 2.5 times the relative size of QE to the Japenese economy, the open market transaction promises of Mario Draghi and the ECB, plus our own £375 bn QE program. The great rubber dinghy that is the world economy is slowly losing air (credit) despite the massive QE as credit defaults are outrunning the QE injections - note that Everbright Bank which missed its debt repayment 10 days or so ago setting off all the interbank lending market worries in China was just such a case in point. Where would the UK economy be now without QE? Remember virtually everyone back in 2009 saying that interest rates would have been normalised by now, and that the initial QE would have been unwound. Well that simply hasn't happened, we're on continued life support, hopelessly addicted to the crack of QE, and now the medicine isn't even achieving its intended purpose of inflating away the debt. And now, slowly but surely, central banks are losing control of bond yields, which is an absolute must to keep the ship on an even keel. Not that the world's cental banks can control anything long term. That much has been proven time and time again.
Calm down, hunchman!
No one disputes that your apocalyptic forecasts are possible. What we need to establish is how probable they are.
First we need to unbundle the issues.
Let's just take gilt rises.
Now is not the time to make a long term prediction. The rises in yields appear principally to be a short term reaction to Bernanke's tapering threats. But Bernanke has only suggested that the Fed will start tapering when market conditions allow. And the market response to his mid-2014 suggestion have probably convinced him that the time is not yet right. Still that won't stop the Fed making similar noises again and again hoping that each time the market response will be more muted.
Already the ECB and BoE, as well as the Fed, have made statements supporting a continued policy of low interest rates in response to the reaction to Bernanke testing the water.
So we have to ask ourselves whether the jump in bond yields is a temporary overreaction or a longer term trend. None of us know the answer to this but the probability that it is short-term appears to be higher than it being a signal of long term doom. Say a 60/40 balance.
As for the other points you raise - China SHIBOR rate leaps, EU periphery bond rates, commodity price falls - each are major issues with downside risks but the most likely outcome is that they will be resolved in isolation of each other rather than combining to bring down the global 'pack of cards'.
The Chinese government seems to be addressing problems caused by excessive municipal and bank borrowing by using the central bank to punish the miscreants: or more correctly to restrict liquidity to the 'good guys'. It is more likely than not that this will - eventually and not without pain - solve the current problems.
Bond rates to the EU periphery are a both a knock on to the tapering reaction and a reminder to the countries involved that they are exposed if the tide genuinely is turning. We all know this to be the case and, hopefully, it will knock back a little of the complacency that has set into the Eurozone. But isn't this all part of the pressure on, pressure off cycle that has characterised the last few years. We are as likely to be in pressure off mode in three months time as pressure on!
On Commodity prices, much is a reaction to recent revisions to global growth rates, particularly in the high growth BRICS countries. Again is it a natural cyclical reaction, correction to over-optimistic recovery prospects or an early warning of collapse. All are possible outcomes but I wouldn't put global collapse as the most likely.
This article suggests a very simple test (well, simple until it's challenged in the courts). Also one of the Telegraph or the Sun have called this one very wrong:
This article suggests a very simple test (well, simple until it's challenged in the courts). Also one of the Telegraph or the Sun have called this one very wrong:
How about a simple income means-test? Why should a millionaire pensioner living in a cold place be eligible for the allowance when they clearly don't need it.
How about a simple means-test? Why should a millionaire pensioner living in a cold place be eligible for the allowance when they clearly don't need it.
Because Cameron made a hasty promise in the PM debates?
How about a simple means-test? Why should a millionaire pensioner living in a cold place be eligible for the allowance when they clearly don't need it.
Because Cameron made a hasty promise in the PM debates?
Well they don't call him Cast Iron Cam for nothing
No one disputes that your apocalyptic forecasts are possible. What we need to establish is how probable they are.
First we need to unbundle the issues.
Let's just take gilt rises.
Now is not the time to make a long term prediction. The rises in yields appear principally to be a short term reaction to Bernanke's tapering threats. But Bernanke has only suggested that the Fed will start tapering when market conditions allow. And the market response to his mid-2014 suggestion have probably convinced him that the time is not yet right. Still that won't stop the Fed making similar noises again and again hoping that each time the market response will be more muted.
Already the ECB and BoE, as well as the Fed, have made statements supporting a continued policy of low interest rates in response to the reaction to Bernanke testing the water.
So we have to ask ourselves whether the jump in bond yields is a temporary overreaction or a longer term trend. None of us know the answer to this but the probability that it is short-term appears to be higher than it being a signal of long term doom. Say a 60/40 balance.
As for the other points you raise - China SHIBOR rate leaps, EU periphery bond rates, commodity price falls - each are major issues with downside risks but the most likely outcome is that they will be resolved in isolation of each other rather than combining to bring down the global 'pack of cards'.
The Chinese government seems to be addressing problems caused by excessive municipal and bank borrowing by using the central bank to punish the miscreants: or more correct to restrict liquidity to the 'good guys'. It is more likely than not that this will - eventually and not without pain - solve the current problems.
Bond rates to the EU periphery are a both a knock on to the tapering reaction and a reminder to the countries involved that they are exposed if the tide genuinely is turning. We all know this to be the case and, hopefully, it will knock back a little of the complacency that has set into the Eurozone. But isn't this all part of the pressure on, pressure off cycle that has characterised the last few years. We are as likely to be in pressure off mode in three months time as pressure on!
On Commodity prices, much is a reaction to recent revisions to global growth rates, particularly in the high growth BRICS countries. Again is it a natural cyclical reaction, correction to over-optimistic recovery prospects or an early warning of collapse. All are possible outcomes but I wouldn't put global collapse as the most likely.
We've had a very important sentiment shift, in actual fact the recent economic data (set against a very low expectation backdrop) hasn't been too bad, but the markets don't move on news, but sentiment. Your argument when distilled down to its bare bones is in my view a play on the 'decoupling' sentiment in vogue at the end of 2007. Remember then how it was argued that Asia and Europe could 'decouple' themselves from the problems in the subprime US mortgage market. We all saw how that thesis got blown out of the water by subsequent events. Note that I haven't even mentioned the problems emerging in Australia (commodity demand from China falling / early stages of property bust) - credit default swaps on Aussie banks have risen by around 50% just in the last month, or the property bubble mess that noneother than Mark Carney has left behind in Canada. Its still going to take time however, am expecting markets to calm down in July until around the 25th. Then lets see how early August plays out, that's when I expect we should get our first big tremors in the market.
Charles is correct to point out the risks to the property market of higher rates going forward.
This article suggests a very simple test (well, simple until it's challenged in the courts). Also one of the Telegraph or the Sun have called this one very wrong:
How about a simple income means-test? Why should a millionaire pensioner living in a cold place be eligible for the allowance when they clearly don't need it.
Moral hazard. Why would you save for retirement if benefits are means tested ?
Comments
Nice to see Mr. Hunchman on.
Harper obviously lacks the precise footwork and matchless poise of a morris dancer. I hope he makes a swift recovery.
As we discussed a couple of days ago, the rise in rental yields on property mainly results from post financial crisis falls in house prices and the decline in mortgage lending which, in combination, has led to illiquidity in the residential property sales market.
Commercial landlords gain a return on their investment from a combination of capital appreciation of property values and from rents.
In the five years between 2002 and 2007, residential property increased in value by 84.4% (71% in London) or at an annual rate of 13.1% (11.4%). Inflation over the same period (CPI) was an annual average of 2.4% or 12.5% over the five year period.
So £100.000 of residential property bought at the beginning of 2002 would have increased in value to £184,400 by the end of 2007. A basket of goods and services equivalent in balance to those making up the CPI and costing £100,000 in 2002 would have cost £112,500 at the end of 2007. The premium return over inflation to the property investor in the Brown "boom" would have been £71,900 or 71.9%.
Now let's take the period 2007 to 2012.
In the UK £100,000 of residential property bought at the beginning of 2007 would have increased in value to £107,200. In London, because property values fell faster than in the rest of the UK during the financial crisis (Index UK 171.9 vs London 153.8), the rebound was greater: from £100,000 to £121,900. CPI would have inflated the £100,000 to £123,100 over the same period.
So a Landlord owning a property during the last five years would have lost capital value in real terms, to the tune of nearly 16% outside London and 1.2% in London. The inevitable consequence has been the pushing up of rents to compensate for the losses in capital returns.
Because, in the Brown years, the massive above inflation rises in property values allowed rents to become underpriced, the recent rises in rent have been even higher than would have been the case had Brown had not pumped the property bubble to bursting point.
What is happening in London with rental properties and housing benefits is a direct consequence of the distortions to a normal property market caused by the pre-2007 boom and the fallout from the 2008-9 bust.
Labour may wish to blame "landlords and letting agents" for the rises in rent but they are purely responding to current market pressures.
Osborne is pursuing exactly the right policies in the housing market. The lending schemes are designed to return liquidity to the housing market; to stimulate demand by giving temporary support to first time and first move purchasers; to stimulate supply by easing mortgage finance constraints; to stimulate new building by stabilising market conditions; and. last but not least. to stimulate the recovery of property values.
Getting a properly functioning and balanced housing market is far more likely result in rental rates finding their appropriate levels. Embarking on a massive programme of new building financed by additional government borrowing without fist stablisiing the existing market would only exacerbate current problems.
Understanding this is the true genius of George Osborne.
http://www.pretzelcharts.com/2013/06/one-technical-argument-for-long-term.html
I still expect the Nasdaq to make a new high around about July 25th, but not the S&P or the Dow Jones.
Bond yields are beginning to rise everywhere:
http://globaleconomicanalysis.blogspot.co.uk/2013/06/yields-creep-up-in-spain-italy-france.html
10yr gilt has gone up by around 100 basis points (1%) - funding was so cheap, and so many of the Keynsian clap-trap economists were encouraging us to borrow even more, what charlatans they are looking right now. And all too predictably, Jeffrey Osborne's strategy predicated on gilt yields remaining low is beginning to fall apart (the technical charts said loud and clearly that he was going to be proved wrong). Investors in the early stages of rising yields have classically confused them for rising inflation (and growth) expectations. Rising rates will soon snuff out any (supposed) recovery in the housing market. Well the data is hardly delivering is it?! Rather, the rising yields are a sign of deflationary pressures rising, where everything is starting to get sold off in the desperate scramble for cash, whether that is equities, bonds or commodities. QE is facing the classic law of diminishing returns. Bernanke, Carney and all the other central bankers around the world know only too well that tapering (or the mere mention of it) is enough to spook the markets right now. There simply is no way of gently deflating a bubble that even the central bankers now acknowledge has occurred. I'm looking on my favoured scenario for a bottom ideally to form around 1535-1540 on the S&P (now 1588), before we rally into late July. Then some stronger downward action that what we've had over the past month can begin.
And China continues to send out some ominous warnings, alongside Japan:
http://www.zerohedge.com/node/475681
And then the Eurozone crisis shows signs of igniting yet again:
http://www.zerohedge.com/news/2013-06-25/time-running-out-fast-italy
Can't wait for a week tomorrow when going to Wimbledon for mens quarter finals day too, albeit on Court 1. Should get to see one of the big 3 left now all being well - probably the Djok?
What is proposed - letting the rail franchises lapse and go back into public ownership - is not nationalisation of the railways in the form most people think of it (or indeed any form).
I am not anti renationalisation: I would just want to make darned sure that we do not throw the baby out with the bathwater. Privatisation has been a success on three counts in my mind:
1) A massive amount of new rolling stock (albeit after a new order moratorium in the run-up to privatisation).
2) Massively increased passenger numbers.
3) A massive increase in railfreight tonnage and mileage, despite a reduction in traditional bulk loads such as coal.
Some of these may have occurred under the old BR nationalised system; some would not, and certainly to the same scale. (All are from memory, I hope they are right).
Any new scheme should attempt to continue these trends and not stall them.
I think that privatisation of the railways was correct in principle but we're still getting it right in terms of implementation; that to a considerable extent the original privatisation was rushed (or simply badly handled, I don't know).
Understanding this is the true genius of George Osborne. "
Avery - that could have come straight out of CCO! How you can view the NewBuy scheme, the FirstBuy Equity Loan scheme and HomeBuy direct as stabilising the housing market? Any Conservative of repute knows that central planning in anything (whether its central planning of money by central banks) or central planning of the property market courtesy of HM Government is going to end very very badly indeed. We've already had colossal misallocation of capital into unproductive sectors of the economy including principally the property market. And the fact that your friend Jeffrey is encouraging even more of it is proof enough to me that he is a million miles from the perspective of an Austrian economist and libertarian.
On a related note, early discussion thread is up here: http://enormo-haddock.blogspot.co.uk/2013/06/britain-early-discussion.html
Hope you enjoy your day at Wimbledon.
It took over 4 years to earn the 1st £50 but only 13 months to earn the 2nd.
Many thanks to whichever PBer it was all those years ago that suggested it on a thread one day.
Mick Pork - agree that more is to come on Lawrence. Its simply staggering what has (apparently) gone on there. I haven't been around the Kidbrooke area for a long time (having campaigned in Eltham in 1997), if anything is going to reopen the scars after 20 years, then this is it. Clive Efford made some very sensible comments yesterday on the whole subject.
What an eccentric attempt to crowbar a story from two years ago into "recent events".
It certainly speaks volumes about partisanship.
Meanwhile enjoy this powerful refutation to the bitter and twisted.
http://www.youtube.com/watch?v=_p6FLflRYYE
Spiegel - Merkel shifting her attitude to Europe and becoming more skeptical
http://www.spiegel.de/international/europe/german-chancellor-merkel-cools-on-european-integration-a-907339.html
The Chancellor's role is managerial, consensus driven and risk averse. We are not voting Osborne into office to play the casino tables. He is there to manage the UK economy as an ongoing economy in an stable environment forecast to develop on a "most likely" basis.
We are not asking our Chancellor to impose radical solutions to the economy on the basis of adherence to a particular economic orthodoxy or on the basis of forecast outcomes of extreme variance to the international political consensus.
Hunchman, you and others, are quite free to invest at your own risk on the basis of such theories and forecasts and good luck and rewards to you if you get it right. But much as I love your contributions to pb I wouldn't want to see you occupying No 11 Downing Street!
As to central planning, I am as opposed in principle to its methods as anyone. Particularly as I have spent a large part of my working life seeing its ill effects in Central and Eastern Europe. But I am still not an absolutist. A belief in free markets doesn't exclude the value of all or any governmental intervention and planning.
I see the score as Hayek 7 Keynes 3 not a 10-nil rout!
So:
http://www.bbc.co.uk/news/uk-23029195
(waits for the wails and gnashing of teeth)
Don't worry, that's the last place I'd want to be right now! There will be a horrendous crash right ahead, irrespective of who is there. So as much as I like making fun of Jeffrey, he really has an impossible job - the demographic and social mood cocktail see to that.
http://www.spiegel.de/flash/flash-21034.html
I still think that AfD could shock and surprise, and get over the critical 5% barrier, if the events of August play out as I expect them to. Its going to be a fascinating election. Bring on the 22nd September!
http://www.itv.com/news/update/2013-02-26/alex-salmond-praises-cardinal-keith-obrien/
The Salmond touch , it never fails.
What is the point of T20Is with the entire first team missing?
http://www.itv.com/news/update/2013-02-26/alex-salmond-praises-cardinal-keith-obrien/
The Salmond touch , it never fails.
I think is speaks highly of Salmonds character, sticking by his friends, even when they have to resign in disgrace as a result of a sex scandal. Good on him!
Mr. Pork, a news report I saw suggested this won't help the stability (such as it is) of the Italian Government, of which Berlusconi's party is a member [think I heard that correctly].
You really are The spoofable cybernat.
Did you object to me crowbarring a decade old reference to the The Nasty Party when I did that in a nighthawks a few months ago?
No, I thought not.
Was that the first time he wasn't the most expensive bowler in the team?
Why did you post that, Is Salmond a friend of Berlusconi?
" Judge a man by the friends he keeps. "
Cardinal Keith O'Brien , " Sir " Rupert Murdoch , Sir Brian Souter , ex - Sir Fred Goodwin , Donald Trump........
I always enjoy your comments but I don't agree. It seems to me that the UK economy is stabilising in a number of respects and is on course to grow only slightly below trend this year. I think we will see the first real rise in construction since the Olympic building program finished driven by domestic housebuilding on the back of Osborne's interventions to improve liquidity.
The markets may well be volatile and I am still nervous that we are at risk of another spin of the EZ roulette wheels with a possible credit crunch yet again as the cheap credit from the US dries up but the situation does not feel anything like late 2007 to me.
My guess this week is that Osborne will have found some leeway for modest capital spending but will also look to suggest that borrowing this year is going to come in well below forecast. He will emphasise the importance of keeping spending tight notwithstanding this for political as well as economic reasons. He seems to be working on getting a grip of what is perversely called managed expenditure which is not before time.
You must be mistaking me for tim.
Cardinal Keith O'Brien , " Sir " Rupert Murdoch , Sir Brian Souter , ex - Sir Fred Goodwin , Donald Trump........
I accept that he does not always choose his friends wisely, but loyalty through thick and thin is a laudable trait. A sort of Scottish Chumocracy, only based on pursuit of power rather than old school tie.
THAT'S your excuse?
I should have noticed when you included one reference months ago?? Have you been drinking?
LOL
Was it linked to a two year old story or did you merely just bring yourself to just say "the nasty party" once a few months ago and actually expect that to make your blatantly obvious bias fine?
You really are the most utterly predictable PB tory.
Not really sure what your issue is with him, but a set of tired cliches masquerading as outrage speaks more of you than him.
What do you make of that ?
I'll give you 87 reasons why it's self-evidently not me with the issue and I'm hardly alone either.
Did I mention, I'm no longer a resident of Mordor.
Moved back to Yorkshire on Friday.
PB Moderator - The Downing Street Affair story.
Someone must have stolen his bag of acorns this evening.
You future PM hopes for Lansley aren't looking to good, are they Seth?
None ever took Labour's budgetary or spending plans seriously, no doubt least of all the Chancellor at the time.
Yes but it takes some cheek to criticise a Government for doing more or less what you had planned to do and then turn around and say that the plans werent serious.
Groundnuts not acorns, Pork.
It was Lansley's job to take all relevant factors into account when deciding on dismissal.
Such factors would include any litigation that had risen or may in future arise out of making the decision.
It appears that Lansley did make the right decision. How he got there and the ebb and flow of the argument for and against is really irrelevant. Just part of the job.
In summary Lansley acted like a true leader.
http://events.spectator.co.uk/immigration.html
He's a Blairite isn't he? Perhaps he isn't too keen on Ed (for that matter either of them) ???
http://www.bbc.co.uk/news/uk-scotland-scotland-politics-19997536
http://www.telegraph.co.uk/comment/9121424/We-cannot-afford-to-indulge-this-madness.html
http://www.pinknews.co.uk/2011/09/19/brian-souter-says-society-may-implode-if-traditional-marriage-falls/
That's great, isn't it? Thanks, Richard!
Are you suggesting that MP's should not vote with their conscience whether that might be against the current mood?
I would far rather my MP voted according to his conscience than to party dictat. I would respect him or her for that even if I thought he or she was wrong.
As it happens, I think Marriage is, was and always will be solely between a man and a woman, but people are free to disagree with me without being categorised as swivel eyed loons.
http://www.wahlrecht.de/umfragen/index.htm
I find it instructive to remind tories that they can complain all they like about labels but Cameron got there first.
Before refashioning its image, the party will need to re-find itself. It must re-create its membership, which has collapsed. It must establish a working relationship with UKIP, those "fruitcakes, loonies and closet racists", who are now, in truth, the Tory Party in exile.
http://www.thecommentator.com/article/3838/here_lie_the_remains_of_tory_modernisation
I look forward to the Tory rump frothing all over this.........
Just seen on the GENSHEET Yahoo Group that it looks like the brand new Hitchin Flyover is open for (albeit a few) London to Letchworth rail services! Hopefully all Cambridge line services will be using it before long!
A 1% rise in the 10 year gilt yield from 1.43% at the bottom, to around 2.4% now is a huge negative as far as the public finances go. Last year we spent $40bn or so just servicing the debt interest - the annual gilt issuance needs to be around £170bn to meet the PSBR plus rolling over maturing debt of around £50bn. Assuming the DMO is still going to issue on an average maturity of about 14 years, that's a net extra cost of around £20bn over the lifetime of the debt on present value terms. So the £11.5bn of cuts that Mr Osborne has announced won't be nearly enough.
And the last month has shown enough bombs waiting to go off - China, Japan, Italy, Spain etc. These are not small countries like Cyprus that can be just brushed under the carpet. When number 2 and number 3 are on the precipice, the whole deck of cards that is the world economy won't take long to follow. Plus you should be worried that lumber has fallen by 25% since the start of February, copper the great bellweather for the world economy has been falling since then as well. Good old Dr Copper, the PhD of economic commodities is telling you something very important - the world economy is not at all healthy. If the hyperinflationists are right then everything should be skyrocketing to the moon, not least gold and silver. Its not happening, even with $85trn monthly of QE in the US, 2.5 times the relative size of QE to the Japenese economy, the open market transaction promises of Mario Draghi and the ECB, plus our own £375 bn QE program. The great rubber dinghy that is the world economy is slowly losing air (credit) despite the massive QE as credit defaults are outrunning the QE injections - note that Everbright Bank which missed its debt repayment 10 days or so ago setting off all the interbank lending market worries in China was just such a case in point. Where would the UK economy be now without QE? Remember virtually everyone back in 2009 saying that interest rates would have been normalised by now, and that the initial QE would have been unwound. Well that simply hasn't happened, we're on continued life support, hopelessly addicted to the crack of QE, and now the medicine isn't even achieving its intended purpose of inflating away the debt. And now, slowly but surely, central banks are losing control of bond yields, which is an absolute must to keep the ship on an even keel. Not that the world's cental banks can control anything long term. That much has been proven time and time again.
"Up to 120,000 British pensioners living in hot countries to lose winter fuel allowance - full story in The Sun tomorrow"
"An NHS campaigner has fled her home town following death threats, abuse and the desecration of her mother’s grave.
Julie Bailey, who helped expose the horrific neglect at Stafford Hospital which cost up to 1,400 lives, says ‘vipers’ have victimised her ever since she set up Cure the NHS.
http://www.dailymail.co.uk/news/article-2348449/Julie-Bailey-The-whistleblower-exposed-Mid-Staffs-scandal-driven-home.html
Point being that if you rely on the opposition and the lib dems to push an issue through then don't be surprised when you turn around and find your backbenchers grinding their teeth in anger. Lashing out in such a counterproductive manner is also hardly very bright just because you couldn't persuade those backbenchers or your grassroots of the wisdom of your position. That persuading should have been done long before the vote. Not for cosmetic reasons (such as Osbrowne wanted) but because Cammie has a duty to his party and his successors not to split the grassroots and MPs any more than is necessary. He's merely building up problems that will come back in some other form. Even If he somehow manages to avoid the full force of it this side of the election he or his his successor will not be so lucky afterwards.
You have to lead your party yet that doesn't just mean getting the whips to do all the dirtywork or using the lib dems and labour to ram something through.
There's going to be a reckoning for the tory party after the coalition. It's almost certain to manifest itself over staying IN or OUT of the EU though it will be deeper than even that.
It was the right decision. That doesn't mean how the decision was made is irrelevant.
This has been announced before. It presumably refers to a temperature test for the payment. It will be interesting to see how the temperature test works!
Let's have a look at previous 'temperature test' master strategies. So if the expat pensioner is ambient temperature.. put VAT on them? Sounds like a winner.
What could possibly go wrong?
More of an issue is the impact on house prices as the last of the cheaper deals rolls over (I'm thinking the early 2008 deals, refi'ed in 2011 and now coming up in 2013/4, especially the IO ones)
Labour will have to use a montage of videos of George and Dave saying how important low interest rates were and what a vote of confidence in their policies they were in the near future.
I think that the whole benefit should be scrapped, apart from those who actually need the additional money to heat their homes.
No one disputes that your apocalyptic forecasts are possible. What we need to establish is how probable they are.
First we need to unbundle the issues.
Let's just take gilt rises.
Now is not the time to make a long term prediction. The rises in yields appear principally to be a short term reaction to Bernanke's tapering threats. But Bernanke has only suggested that the Fed will start tapering when market conditions allow. And the market response to his mid-2014 suggestion have probably convinced him that the time is not yet right. Still that won't stop the Fed making similar noises again and again hoping that each time the market response will be more muted.
Already the ECB and BoE, as well as the Fed, have made statements supporting a continued policy of low interest rates in response to the reaction to Bernanke testing the water.
So we have to ask ourselves whether the jump in bond yields is a temporary overreaction or a longer term trend. None of us know the answer to this but the probability that it is short-term appears to be higher than it being a signal of long term doom. Say a 60/40 balance.
As for the other points you raise - China SHIBOR rate leaps, EU periphery bond rates, commodity price falls - each are major issues with downside risks but the most likely outcome is that they will be resolved in isolation of each other rather than combining to bring down the global 'pack of cards'.
The Chinese government seems to be addressing problems caused by excessive municipal and bank borrowing by using the central bank to punish the miscreants: or more correctly to restrict liquidity to the 'good guys'. It is more likely than not that this will - eventually and not without pain - solve the current problems.
Bond rates to the EU periphery are a both a knock on to the tapering reaction and a reminder to the countries involved that they are exposed if the tide genuinely is turning. We all know this to be the case and, hopefully, it will knock back a little of the complacency that has set into the Eurozone. But isn't this all part of the pressure on, pressure off cycle that has characterised the last few years. We are as likely to be in pressure off mode in three months time as pressure on!
On Commodity prices, much is a reaction to recent revisions to global growth rates, particularly in the high growth BRICS countries. Again is it a natural cyclical reaction, correction to over-optimistic recovery prospects or an early warning of collapse. All are possible outcomes but I wouldn't put global collapse as the most likely.
This article suggests a very simple test (well, simple until it's challenged in the courts). Also one of the Telegraph or the Sun have called this one very wrong:
http://www.telegraph.co.uk/news/politics/10122852/No-10-blocks-move-to-axe-winter-cash-for-pensioners-in-warm-countries.html
I'm glad someone is keeping up the Cameron-loving in RichardN's absence
No one disputes that your apocalyptic forecasts are possible. What we need to establish is how probable they are.
First we need to unbundle the issues.
Let's just take gilt rises.
Now is not the time to make a long term prediction. The rises in yields appear principally to be a short term reaction to Bernanke's tapering threats. But Bernanke has only suggested that the Fed will start tapering when market conditions allow. And the market response to his mid-2014 suggestion have probably convinced him that the time is not yet right. Still that won't stop the Fed making similar noises again and again hoping that each time the market response will be more muted.
Already the ECB and BoE, as well as the Fed, have made statements supporting a continued policy of low interest rates in response to the reaction to Bernanke testing the water.
So we have to ask ourselves whether the jump in bond yields is a temporary overreaction or a longer term trend. None of us know the answer to this but the probability that it is short-term appears to be higher than it being a signal of long term doom. Say a 60/40 balance.
As for the other points you raise - China SHIBOR rate leaps, EU periphery bond rates, commodity price falls - each are major issues with downside risks but the most likely outcome is that they will be resolved in isolation of each other rather than combining to bring down the global 'pack of cards'.
The Chinese government seems to be addressing problems caused by excessive municipal and bank borrowing by using the central bank to punish the miscreants: or more correct to restrict liquidity to the 'good guys'. It is more likely than not that this will - eventually and not without pain - solve the current problems.
Bond rates to the EU periphery are a both a knock on to the tapering reaction and a reminder to the countries involved that they are exposed if the tide genuinely is turning. We all know this to be the case and, hopefully, it will knock back a little of the complacency that has set into the Eurozone. But isn't this all part of the pressure on, pressure off cycle that has characterised the last few years. We are as likely to be in pressure off mode in three months time as pressure on!
On Commodity prices, much is a reaction to recent revisions to global growth rates, particularly in the high growth BRICS countries. Again is it a natural cyclical reaction, correction to over-optimistic recovery prospects or an early warning of collapse. All are possible outcomes but I wouldn't put global collapse as the most likely.
Avery -I'll leave you with this:
http://www.zerohedge.com/contributed/2013-06-25/markets-are-no-longer-buying-what-central-bankers-are-selling
We've had a very important sentiment shift, in actual fact the recent economic data (set against a very low expectation backdrop) hasn't been too bad, but the markets don't move on news, but sentiment. Your argument when distilled down to its bare bones is in my view a play on the 'decoupling' sentiment in vogue at the end of 2007. Remember then how it was argued that Asia and Europe could 'decouple' themselves from the problems in the subprime US mortgage market. We all saw how that thesis got blown out of the water by subsequent events. Note that I haven't even mentioned the problems emerging in Australia (commodity demand from China falling / early stages of property bust) - credit default swaps on Aussie banks have risen by around 50% just in the last month, or the property bubble mess that noneother than Mark Carney has left behind in Canada. Its still going to take time however, am expecting markets to calm down in July until around the 25th. Then lets see how early August plays out, that's when I expect we should get our first big tremors in the market.
Charles is correct to point out the risks to the property market of higher rates going forward.
Good night all.
http://www.bbc.co.uk/sport/0/tennis/23024272
Why not live it up instead ?