One could remark that, deep down, George Osborne is stupid – and there is something to this. While his outward persona suggests a chap who is a bit of a sharp, squeaky, nasty roué who shags prostitutes and has powdery recreational pursuits, like most self-regarding sociopaths he always underestimates the discernment of the better-than-average citizen. His facile decision to hire an over-praised Canuck who has but one solution for Britain – Abenomics – was a cardinal error. But his wheeze to use taxpayers’ money to create a property feelgood factor (via Help to Buy) is, as predicted, a rake about to hit him full in the face at Earth-escape velocity. It is going to be the clanger by which this terminal lightweight is remembered.
Evidence of this is building rapidly: new data released today have revealed that the pace of house price rises across the UK is now outstripping inflation. Some economists suggest that property inflation could soon reach 7% across Britain. Osborne believes, of course, that in making people feel richer and getting youngsters onto the property bandwagon, he has achieved a Double Top among voters not renowned for voting Tory. But his timing was out, and soon he is going to fall flat on his pasty face.
“It is looking ever more likely that house prices will see marked increases over the rest of 2013 and during 2014, with the result that we have raised our house price forecasts,” said Howard Archer, chief UK economist at IHS Global Insight. “We now expect house prices to rise by at least 3pc over the rest of 2013 and to then increase by 7pc in 2014.” It all sounds good, especially as Wee Georgie has already fixed his own ‘measurement’ of growth to ensure that such manipulation will not be included in RPI. Bombproof, right?
Wrong. The only way this will continue to work is if confidence generally stays above despair…which – with the help of constant Torygraph bollocks – it more or less is, for now. But two things are going to change that:
1. A major bank failure requiring bailin. The current Co-Op farce is too niche for many to notice, unfortunately….although that may change. But I am in little doubt that at least one biggy will be with us by Autumn 2014 at the very latest. Not only will that dent confidence, it will put pressure on the Draper to drop HTB – and persuade quite a few people in the middle of the market to pull out.
2. A rise in interest rates. The more people confidently predict that Zirp can be maintained, the more convinced I am that it can’t. Bernanke, Carney and even Draghi talk about this issue as if they really were Fat Controllers of the Universe, but they aren’t. The central conceit of globalism is that balance can be maintained in all regions at all times. But as the last eighteen months have amply illustrated, it can’t. China, Australia, India, and much of South America all represent wild cards whose value in the pack increases with every Quarter. When (not if) rates rise, within six months of such an event, several hundred thousand young Brits would find themselves in negative equity……and out of a job.
So if the Wave hits in, say, September 2014, by February the scale of the denial, scam, illusion and global disaster will be apparent to all. How delicious the cold collation of revenge is going to be, at that point, as we observe a frustrated 1922 Committee baying for the Chancellor’s blood…but unable to express its rage publicly with just two months to go before a General Election.
The one remaining question in all this is whether the Ed Miller Band has either the nous or killer instinct to make it count. I very severely doubt it: the two Eds have so far failed to suggest they are better than none, let alone one. Perpetually on the back foot, they lack the courage of the convictions they have never had. They are just the Other Lot in the farce that gives me a terrible case of the Reds v Blues.
Well the House of Commons floor/is ten feet wide/but they’re all the same on either side/I got the Reds v Blues/ I got the Reds v Blues / I got the Reds v Blues/ It ain’t exactly new news*
* Lyrics reproduced by kind permission of Slogbelly Blues Corporation © MediaInk Lyrics 2013