The Stock market fell badly
House prices are falling quickly
Bentley announced a three day week
New car sales are well down
Second hand car prices are low and falling
Property specialists are getting gloomier even after a 20% fall in commercial property values
The pound fell further
There are fewer jobs on offer
Some of my readers seem pleased that house prices are falling. Some still think we should be fighting inflation because the pound has fallen and imports are dearer. All the evidence is that the big problem now is the downturn. Inflation will fall rapidly next year. Fewer and fewer companies will have any pricing power. The Stock Market is waking up to the profits squeeze that will now follow the squeeze on family incomes.The government still refuses to cut back itself, intensifying the squeeze on the rest of us.
Some of my readers ask why keeping house prices up matters to politicians. It matters to them because it matters to most of their electors. Most people’s main asset is their home. They do not want it to fall in value. When it does it not only makes them feel worse off, but it limits what they can borrow to sustain their lifestyle. Of course rising house prices on the scale we have experienced in recent years is bad news – it creates a bubble which will burst. It would have been better to have controlled the economy so house prices rose gently. There is one thing worse than house prices rising too rapidly, and that is them tumbling. Many people will pay the price of that. It will mean lost jobs, shattered dreams, repossessions. Do not curse us to even bigger falls in house prices. It just means more economic misery ahead. It means people thrown out on the streets, and it means many others tightening their belts even more whilst big government spends on as if nothing had happened.