BoE slashes interest rates by 1.5%

[phykell]

Originally Posted by A Place of Light

The house price situation has far more to do with supply and demand economics than it has with the consumer/public.

The housing market is another example of a largely unregulated industry running amok. It's examples like the housing industry which have caused our economy to be little more than a house of cards these days. I remember, for example, when the price of a house bore at least *some* relation to its build cost.

It's odd that houses cost so much considering modern methods and materials but look around at some of the older houses. Back when methods and materials were supposedly "crude", they were able to include designs, materials and so on, that simply could not be considered affordable these days. Even in relatively modest old houses such as my own, the internal coving is all hand-moulded plaster and would be far too expensive in terms of labour, to try and replicate in a modern house. Everything's been shaved to the bone, modern roof construction for example, yet houses are poorer quality, don't last as long and cost significantly more.

[Von Smallhausen]

Originally Posted by A Place of Light

Better, but not good, no.
Didn't the tories manage three recessions in ten years?
That's good going by anyones standards.

Was Britain alone in those recessions or what is a case of, as it always seems to be, the US sneezes and the world catches a cold ?

The mantel of Gordon Brown being the Iron Chancellor is bollocks. He borrowed on a huge scale and taxed on a huge scale to pay for NHS funding, which is still largely unreformed and wastes billions a year, to name but one. How much has been put away for times like this ? Not a penny.

In September, we all got a rebate in our pay packets ..... payed for by borrowing over £2 billion.

Gordon Brown failed in his promise to end boom and bust it seems, not that I blame him entirely because the credit crunch in the US kicked it all off but Gordon Brown is guilty of classic Labour in that he taxes and spends.

He raided pension funds to the tune of £5 billion and than has the audacity to say that people should save more even after being squeezed until the pips squeak.

And let's not forget that Gordon Brown inherited a very healthy economy in 1997.

[A Place of Light]

Originally Posted by phykell

The housing market is another example of a largely unregulated industry running amok. It's examples like the housing industry which have caused our economy to be little more than a house of cards these days. I remember, for example, when the price of a house bore at least *some* relation to its build cost.

It's odd that houses cost so much considering modern methods and materials but look around at some of the older houses. Back when methods and materials were supposedly "crude", they were able to include designs, materials and so on, that simply could not be considered affordable these days. Even in relatively modest old houses such as my own, the internal coving is all hand-moulded plaster and would be far too expensive in terms of labour, to try and replicate in a modern house. Everything's been shaved to the bone, modern roof construction for example, yet houses are poorer quality, don't last as long and cost significantly more.

Sale price has less to do with cost of construction now than ever before. The house builders sell at a price they think they can get, not at construction cost+ a percentage of profit. A senior director from a national builder told me that ten years ago their ratio was 2:1, in that for every two houses they build they make enough profit to build one.
Now it's 1:1.

[A Place of Light]

Originally Posted by Von Smallhausen

Was Britain alone in those recessions or what is a case of, as it always seems to be, the US sneezes and the world catches a cold ?

The mantel of Gordon Brown being the Iron Chancellor is bollocks. He borrowed on a huge scale and taxed on a huge scale to pay for NHS funding, which is still largely unreformed and wastes billion a year, to name but one. How much has been put away for times like this ? Not a penny.

In September, we all got a rebate in our pay packets ..... payed for by borrowing over £2 billion.

Gordon Brown failed in his promise to end boom and bust it seems, not that I blame him entirely because the credit crunch in the US kicked it all off but Gordon Brown is guilty of classic Labour in that he taxes and spends.

He raided pension funds to the tune of £5 billion and than has the audacity to say that people should save more even after being squeezed until the pips squeak.

And let's not forget that Gordon Brown inherited a very healthy economy in 1997.

Nobody is suggesting that either side did badly when the other has a spotless record on the issue, but the Tories did screw up (several times) quite spectacularly. Brown has made some major mistakes in his strategy, but handing control to the BoE was one of his better ideas to prevent what the tories had done time and time again as highlighted in DD's post.

[Von Smallhausen]

Originally Posted by A Place of Light

Nobody is suggesting that either side did bad when the other has a spotless record on the issue, but the Tories did screw up (several times) quite spectacularly. Brown has made some major mistakes in his strategy, but handing control to the BoE was one of his better ideas to prevent what the tories had done time and time again as highlighted in DD's post.

The handing of interest rate policy to the Bank was a masterstroke, no argument there but perhaps some historians look more favourable on past Tory fiscal policy than Labour, despite some spectacular failures on their part .... ERM for example.

[phykell]

Originally Posted by A Place of Light

Sale price has less to do with cost of construction now than ever before. The house builders sell at a price they think they can get, not at construction cost+ a percentage of profit. A senior director from a national builder told me that ten years ago their ration was 2:1, in that for every two houses they build they make enough profit to build one.
Now it's 1:1.

That doesn't surprise me at all. I recall a builder doing some work for us and he said he often did brickie work for "house building" companies - he'd be given a budget to work to and told to get the job done for a fixed price. Of course the price wasn't enough for a high-standard job so he would have to make the necessary adjustments as required and of couse the quality of the work wasn't exactly "monitored" either - they were more concerned with appearance and meeting the budget. This is the reason snagging's popularity increased so dramatically. People were buying new houses and finding that door frames didn't fit, walls weren't straight, foundations hadn't been firmly bedded, etc.

[A Place of Light]

Originally Posted by Von Smallhausen

The handing of interest rate policy to the Bank was a masterstroke, no argument there but perhaps some historians look more favourable on past Tory fiscal policy than Labour, despite some spectacular failures on their part .... ERM for example.

Both sides have made equally stupid and costly mistakes (millenium dome anyone?), however I believe on balance that Labour is the least guilty (note, I didn't say innocent) of the two.
TBH, I'd vote for whoever I honestly believed would do the best job of running the country, and anyone who can honestly say they would NEVER vote Labour/Conservative is nothing but a fool.

[dirtydog]

Originally Posted by Von Smallhausen

The handing of interest rate policy to the Bank was a masterstroke, no argument there but perhaps some historians look more favourable on past Tory fiscal policy than Labour, despite some spectacular failures on their part .... ERM for example.

Or indeed Nigel Lawson's tax cuts in 1987 which poured petrol on the booming economy and set the seeds of the early 90s bust and recession.

Remember the days of double digit inflation?

[Von Smallhausen]

Originally Posted by dirtydog

Or indeed Nigel Lawson's tax cuts in 1987 which poured petrol on the booming economy and set the seeds of the early 90s bust and recession.

Remember the days of double digit inflation?

Oh I do.

Tax cuts are a neccessity to get a slow economy moving, especially business taxes.

[dirtydog]

The trouble being that in 1987 the economy was already booming so tax cuts was the last thing it needed - although there was an election that year, hmm I wonder if that had anything to do with it!