April 8, 2008
The figures that Gordon Brown and Alistair Darling do not want you to see
The man from the Halifax sounded quite convincing on the Today programme this morning when he said house prices wouldn’t fall much - because the labour market was sound.
This is the line we have been spun for ages by the government. (It was repeated this morning in an editorial in The Times). It doesn’t ring true.
The problem is that last time around - nearly 20 years ago - employment did not go into meltdown until nearly a year after house prices started to fall. Just as is now happening in the US.
The UK housing market peaked in 1989. Employment kept on rising and peaked in April 1990. Before dropping like a stone.
If this sounds unlikely, check out the chart supplied by our friends at Bloomberg. It augurs very badly indeed. Meanwhile, check out the Spectator blog for an accurate take on Gordon’s “no recession” strategy is faring.
