Inflation Report: House Prices Threatening Economy
2.37.47pm GMT Wed 12th Nov 2003
Reacting to this morning's Bank of England Inflation Report noting unsustainable house price increases, Vince Cable MP, Liberal Democrat Shadow Chancellor, said: "With house price inflation 5 times higher than general inflation, even the Bank now admits the housing market is overpriced and unsustainable in the long term."
"This puts further upward pressure on rates, which will hurt those borrowing at the edge of their means and help maintain the manufacturing doldrums."
"Runaway house prices are now threatening the health of the economy."
"The Bank is impotent in the face of the dreadful imbalances in the economy. It is for the Government and the Financial Services Authority to act to rein in irresponsible lending habits."
"The Government must act to encourage a soft landing for the housing market if we are to avoid the dreadful circumstances of the last crash, with negative equity and repossessions."
ENDS
1. Today's Inflation Report notes that 'House price inflation has been well above earnings growth. This is clearly not sustainable in the medium term.' (page 6).
2.Today's Inflation Report also notes that insolvencies are at their highest since the late 1980s.
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[RISING ENERGY PRICES CAUSING HIGHER INFLATION - CABLE]
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Tue 6th Apr 2004:
[House Prices A "Credible Threat" To Our Economy]
Mon 9th Feb 2004:
[Booming House Prices And Weak Manufacturing Leaves Economy Imbalanced - Cable]
Fri 31st Oct 2003:
[House Prices: Rein In Irresponsible Lenders]
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