They continue to talk about how unbalanced the economic recovery is over in the U.K. and how a lot of people seem to be fine with that, this Telegraph story following on the heels of Jeremy Warner lamenting “This Guilty Return to Pre-Crisis Norms” yesterday.
Today, it’s former Financial Services Authority Chairman Lord Adair Turner.
Britain’s property obsession has left the country at risk of another major financial shock, the former head of the City watchdog has warned.
“We have made it incredibly favourable to buy houses,” Lord Turner told The Telegraph. “The supply issue is very important and we’ve got to increase the supply of housing because otherwise we are just piling up very strong incentives to buy housing, very strong incentives to borrow money to buy housing but against a fixed supply.”
If you do that the only thing that can give is the price.”
Lord Turner also said he was “worried” that the UK was “developing a recovery which is simply returning to the very issues that led us to this problem in the first place.
“Even the Office for Budget Responsibility has said the only way we’re going to get growth back in the next five years is for the [debt to income ratio] to go all the way back to 170pc again. If in five years time debt has gone back up to 170pc, and if interest rates have returned to 3pc, 4pc or 5pc, then a lot of people are going to be struggling.”
As noted here recently, it really does seem to be a case of policymakers in Anglo-Saxon countries almost admitting that “financial bubbles are about all we have left”.
It’s as if they say, “Let’s get a really good asset bubble going again – stocks, housing, whatever – and we should have a few good years of economic growth before it blows up.”