Bubble Warning from senior economist

ILW

wymondham wrote: »

they could print money.... or print money.. they are good at that!

That should stop any property bubble happening.

ILW

grizzly1911 wrote: »

They can give forward guidance subject to overriding world events.

Is Carney actually here it has been very quiet.

Pretty good scheme by Carney. Basically say "not going to change anything for a couple of years", then take a two year holiday on £800k pa. Genius.

TruckerT

Blacklight wrote: »

I like the part where he says: the chances of seeing another housing market bubble are "extremely slim."

Earlier this month, Peter Spencer, the chief economic adviser to the EY Item Club, said that the chances of seeing another housing market bubble are "extremely slim."

WhoTF is Peter Spencer, and !!!!!! is the EY Item Club?

TruckerT

grizzly1911

TruckerT wrote: »

Earlier this month, Peter Spencer, the chief economic adviser to the EY Item Club, said that the chances of seeing another housing market bubble are "extremely slim."

WhoTF is Peter Spencer, and !!!!!! is the EY Item Club?

TruckerT

EY (Ernst Young) have been sole sponsors of the ITEM Club for 25 years. It is the only non-governmental forecasting group to use HM Treasury's model of the UK economy. Our reports provide a detailed economic analysis and forecast of economic activity for the period ahead. They are independent of any political, economic or business bias.

http://www.ey.com/UK/en/Issues/Business-environment/Financial-markets-and-economy/Economic-Outlook

TruckerT

grizzly1911 wrote: »

EY (Ernst Young) have been sole sponsors of the ITEM Club for 25 years. It is the only non-governmental forecasting group to use HM Treasury's model of the UK economy. Our reports provide a detailed economic analysis and forecast of economic activity for the period ahead. They are independent of any political, economic or business bias.

http://www.ey.com/UK/en/Issues/Business-environment/Financial-markets-and-economy/Economic-Outlook[/QUOTE]

This is from the EY club's Autumn forecast...

"With UK GDP now projected to grow by 1.4% this year and 2.4% next year after a 0.1% rise in 2012, it’s increasingly evident that the reinvigorated consumer — emboldened by a reviving housing market — has pushed the UK economy into a higher orbit.
However, rising consumer spending and confidence alone will not be enough to deliver the escape velocity needed to achieve sustained growth. For this to happen, the engines of business investment and exports will also need to kick in. Fortunately, the outlook for both of these areas remains encouraging, suggesting that the pattern of growth will become more balanced.
Clearly, unforeseen events could disrupt this rosy scenario — not least new external shocks from left-field, as shown by the US budget deadlock. However, one risk that we believe has been strongly overplayed is the danger that the UK government’s initiatives to support the housing market will result in a housing bubble. The current rises in prices and transactions are from a historically very low base, and remain way below pre-crisis levels.
With the housing recovery knocking on into wider consumer spending, and virtually all surveys of business confidence trending upwards, the economic outlook for the UK is continuing to brighten — despite the inevitable risks.
Peter Spencer, Senior Economic Adviser to ITEM Club"

To me, it reads like yet another repetition of the mantra that rising property prices are the only possible way forward, and the faster the better.

We are hearing that the energy market is 'broken'. What about the property market? Wannabe first time buyers don't know whether to celebrate the fact that property prices are 'back on track', or whether to regret the fact that there is no real sign that they will ever be able to board the gravy train.

The rental market is where we should be directing our humanitarian concerns. Southwark council have just sold a semi-derelict building, and they say that the £3m they received will pay for 20 of the 11,000 homes which they plan to build. Are they serious? 20? Where will the 11,000 homes be built, and when?

TruckerT

Pobby

A bubble, yes. This has a way to play out yet it is a bubble, one that was not allowed to deflate years back. Printing money, silly low interest rates to keep it all going, deficit coming down, I don`t think so. Those on smaller incomes having to have government support to pay the inflated rents.

Last housing bubble was under Thatcher. Certainly no manipulated low interest rates.

ManAtHome

TruckerT wrote: »

WhoTF is Peter Spencer, and !!!!!! is the EY Item Club?

As they are allegedly "respected", I reckon they must have seen the crunch coming... (just like most of the other "respected" eCONomists).

TruckerT

Pobby wrote: »

Last housing bubble was under Thatcher. Certainly no manipulated low interest rates.

It was Mrs Thatcher (possibly unintentionally) who designed and built the roller-coaster which continues to thrill so many.

Her release onto the market of hundreds of thousands of properties at a fraction of their true value is what provided the casino culture with its first gambling chips.

TruckerT

Carl31

http://news.sky.com/story/1161992/house-prices-tax-to-tackle-london-bubble


Even Gerorgy-O thinks there's a bubble

gazzabboi

Any football fans here? This story is a bit like west ham. Always singing about blowing bubbles, but they never take off