[Re: How the Goldilocks recovery will trigger a sharp inflation rise, Wednesday]
I would love to be Andrew Lilico’s bookmaker, as he’s agreed to a £1 to £1 bet against the odds. But I do agree with his analysis that there is little spare capacity in the UK. The underlying rate of growth in the UK is 1.5 per cent per year, so spare capacity is being absorbed at a fast rate. In 2014, one-off factors (sterling strength and frozen to falling administrative prices) will mask emerging inflation, and policymakers will get behind the curve. CPI inflation will be 3 per cent plus, RPI at 4.5 per cent. So it depends on the basis this bet was made.
[Re: Labour wants the one policy guaranteed to make the housing crisis worse, yesterday]
Politicians have little understanding of the rental market, because they don’t talk to landlords. Many are individuals and don’t have representation. If Labour brings in rent controls, tenants will find that their landlords have to increase their rents to bring them to market levels. This will particularly hurt tenants who haven’t faced rent rises in a few years. Those tenants who complain of rent rises often live in expensive areas where demand is high. But what of those who live in unfashionable areas, where rents are static for years? They will be hurt.
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Evidence shows rent controls don’t work, lead to more rundown properties and reduce choice for tenants.
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