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Debate House Prices
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John Redwood - an unlikely bastion of commonsense.
WTF?_2
Posts: 4,592 Forumite
Anyone remember him? 'Mister Spock', ran for the Tory leadership against John Major back in the mid 90s.
Anyway, he's still on the go and has come out with an uncommon piece of common sense, from a politician anyway.
http://www.johnredwoodsdiary.com/2008/06/17/an-inflationary-or-an-inflammatory-letter/
The Governor, in an honest letter, would say:
“Dear Chancellor,
I am writing to report that inflation is now above 3%. This has come about because we held interest rates too low in the period 2004-6, allowing a credit bubble to emerge. The government’s decision to switch target from RPI to CPI made our task more difficult, as the CPI at the time was lower than the RPI, and has since proved to be a very poor indicator of the overall inflation people are experiencing in their daily budgets. Indeed the gap between RPI and CPI has got larger, meaning our failure on inflation as measured by the old target is worse. We felt we had to respond to a lower, easier target once set.
Brilliant stuff. We need more people to stand up and bust the myth that slashing interest rates is the be-all and end-all of economic policy.
Anyway, he's still on the go and has come out with an uncommon piece of common sense, from a politician anyway.
http://www.johnredwoodsdiary.com/2008/06/17/an-inflationary-or-an-inflammatory-letter/
The Governor, in an honest letter, would say:
“Dear Chancellor,
I am writing to report that inflation is now above 3%. This has come about because we held interest rates too low in the period 2004-6, allowing a credit bubble to emerge. The government’s decision to switch target from RPI to CPI made our task more difficult, as the CPI at the time was lower than the RPI, and has since proved to be a very poor indicator of the overall inflation people are experiencing in their daily budgets. Indeed the gap between RPI and CPI has got larger, meaning our failure on inflation as measured by the old target is worse. We felt we had to respond to a lower, easier target once set.
Brilliant stuff. We need more people to stand up and bust the myth that slashing interest rates is the be-all and end-all of economic policy.
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Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
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