Vince Cable, the business secretary, yesterday warned of a danger of house prices “getting out of control” as Whitehall’s official forecasters predicted a near return to the bubble of 2007.
In real terms the market will by 2018 peak at just 3 per cent below the heights last seen six years ago, the Office for Budget Responsibility estimated in new figures produced on Thursday.
The OBR has revised upwards its forecast by some 10 per cent since March, in part because of the projected impact of the coalition’s controversial Help to Buy mortgage scheme.
Annual house price inflation is not expected to return to the giddy pace of the last decade, with in-year rises set to peak at 7.2 per cent in 2015, the OBR suggested.
But the inflation-busting rises from 2013 to 2018 will together add more than 20 per cent to a market that Read more
Today, George Osborne had the rare pleasure of announcing economic news that is better – not worse – than was expected when he last held a major fiscal event. The Autumn Statement declared that growth, employment and the public finances are all heading in the right direction. Even some bad news from the past, such as the double-dip recession earlier in the parliament, was revised out of existence.
But the chancellor’s political challenge was to combine all this optimism with unwavering commitment to austerity, the cause that defines him and the government. Veering off this theme to join the opposition Labour party in a skirmish over living standards this autumn has left the Tories looking like slaves to the news cycle. Read more
George Osborne has presented his Autumn Statement. Its highlights included a large increase in the economic growth forecast, a predicted budget surplus in 2018, a hike in the state pension age and free school meals for all infants.
By John Aglionby and Emily Cadman with contributions from FT colleagues
An eagle-eyed reader brings my attention to a curious little amendment that appears to speak volumes about Number 10’s fear of errant backbenchers.
Rewind the clock to this summer when two Tory MPs – John Baron and Peter Bone – put forward an amendment to the Queen’s Speech which turned into a full-scale uprising.
In the end some 130 MPs, mostly Tories, backed the amendment which called for the coalition to legislate for a 2017 EU referendum this side of the general election.
The vote was not technically a “rebellion” because there was no whip by either side. But it was a very vivid expression of Euroscepticism by the Tory benches.
Bear in mind that these MPs still voted against David Cameron even after he had gone Read more
Last week, Ed Miliband was beaten by the prime minister after failing to build a clear narrative from his rather scattergun questions. This week he was more disciplined, and had a clear and coherent attack. For some reason however, it didn’t generate the response from Labour MPs you might expect.
The Labour leader decided to lead on the government’s decision to set a cap on the amount of interest payday lenders can charge. It might not have been an obvious attack, given Labour also supports the policy, but Miliband worked it cleverly to his advantage, asking why this sort of market intervention is a good thing, when capping energy energy prices constitutes “Marxism”:
How did he go from believing that intervening in the markets is living in a Marxist universe to believing it is the solemn duty of government?
Downing Street has rejected claims that David Cameron described environmental levies as “green crap” as the coalition explores ways to minimise the impact of green subsidies on household energy bills.
The prime minister is said to have used the dismissive language to describe the state subsidies which pay for renewables and help the poor cut their fuel use.
The Sun newspaper quoted an unnamed source saying: “The prime minister is going round Number 10 saying: ‘We have got to get rid of all this green crap’.”
Officials said they did not “recognise” the phrase but emphasised that the prime minister had repeatedly promised to roll back to green taxes with an announcement expected in next month’s autumn statement.
The fact that Mr Cameron did not directly deny having used the “crap” phrase underlines Read more
A rather strange and fractious PMQs today. Amid much gnashing of teeth about the allegations surrounding Paul Flowers, the former chair of the Co-Op bank, and his links to Labour, Ed Miliband set off in an unexpected direction at the beginning of his questions. He asked the prime minister about “his campaign against the closure of children’s centres in Chipping Norton”.
It was an intriguing opening and Cameron floundered for a bit talking about “difficult decisions” on children’s centres. Miliband followed up by saying:
He has even signed a petition to save the children’s centre in his own area. Is he taking it right to the top?
Back in October, the FT revealed that Philip Hammond’s bold plan to part-privatise the MoD’s weapons-buying arm were in trouble, with one of the two potential bidders worried about various aspects of the bid.
At the time, the consortium, led by CH2M Hill, was worried about whether the terms on offer were commercially attractive. It was also worried about the status of one of its component companies, Serco, which is under threat of not being able to bid for government contracts in the future after allegations emerged it had overcharged taxpayers for tagging offenders.
Today, the CH2M Hill consortium dropped out altogether, leaving only one bid, led by Bechtel, the US engineering group. The company says the commercial terms on offer were simply not good enough to continue with the bid. Read more
We have written before, at great length, about how the lobbying bill is one of the worst piece of legislation put before the Houses of Parliament for many moons.
Even the recent concessions from ministers have failed to quell the dissent, with the FT recently opining: “The retreat is welcome. But it fails to resolve other flaws in a hastily drafted bill which, as it stands, should be rejected.” Read more
It’s no secret that economics is far from an exact science. Some would say it isn’t a science at all. Even the intelligentsia at the top of the Bank of England failed to see the financial crash coming, despite all their charts and graphs and post-graduate degrees.
Anyone who still maintains a religious attachment to economic charts should consider this one, published in the Bank of England’s inflation report yesterday. The yellow line you see is “newspaper citations of ‘economic uncertainty’”, based on mentions of the phrase in the FT, Independent and Times. Read more
By Roger Beale
When news broke that Serco was one of the companies under investigation by the Serious Fraud Office for overcharging the taxpayer for tagging criminals, the government began its own investigation into the company, during which it is banned from winning new Whitehall contracts.
Depending on the result of the government probe, the company faces the threat of not being able to win any contracts in the future at all: something, incidentally that would cripple government plans to outsource defence procurement.
But figures revealed by the FT this morning show that whatever happens, the company will remain an integral part of the defence machinery until well into the 2020s, doing everything from training RAF pilots to building nuclear weapons. Read more