House prices

According to a friend who sold a successful consulting business a few years ago, the problem with employing middle-class Britons, unlike Americans, is that there’s a summit to their ambitions. Once they’ve earned enough money to trade in their BMW for a Porsche, install a new kitchen and create an attic room with a dormer window, they start taking it easy. ‘Those are the only three things they really want,’ he says. As a freelance journalist, I’ve abandoned all hope of owning a Porsche or getting the attic done. But after living in the same house in Acton for 15 years, I’m finally remodelling the kitchen. Or rather Caroline is.

[audioplayer src=”http://traffic.libsyn.com/spectator/TheViewFrom22_14_August_2014_v4.mp3″ title=”Ed West and Ryan Bourne discuss the moaning middle class” startat=1402] Listen [/audioplayer]Almost from the moment the coalition came to power four years ago, a mood of deepening grievance has gripped parts of the middle class, fuelled by a sense that they have been the biggest losers from the government’s austerity programme. They see themselves as ‘the squeezed middle’, the ones cruelly punished by rising taxation and the loss of state support. What makes their anger all the greater is the feeling of betrayal. David Cameron should be on their side. This narrative of victimhood has become conventional wisdom. Only this week Radio 4’s Jenni Murray, the epitome

Home Demand for housing posed ‘the biggest risk to financial stability’ according to Mark Carney, the governor of the Bank of England. House prices rose by 8 per cent in the year to the end of March, according to the Office for National Statistics, and in London the increase was 17 per cent. The annual rate of inflation rose to 1.8 per cent in April from 1.6 per cent in March, as measured by the Consumer Prices Index; it remained at 2.5 per cent as measured by the Retail Prices Index. The underlying annual profits of Marks & Spencer fell by 3.9 per cent to £623 million, putting them behind

Google ‘the bread market’ and you get 135,000 hits, mostly from specialist food industry websites. Google ‘the property market’, however, and you get over 180 million. ‘The financial markets’ nets you 282 million. Seen like this, it’s unsurprising that capitalism has a reputational problem. The likelihood that the word ‘market’ is attached to any area of commercial activity is in direct proportion to the degree to which that category is seriously messed up. The idea that all ‘markets’ are effectively the same is perhaps one of the stupidest economic errors of the past 50 years. For a start, asset markets are not like other markets. As John Kay explains, writing in

It’s senseless to ask how things are going to end, because things as a general rule don’t. They rumble on, they morph, and yesterday’s drama becomes tomorrow’s eyebrow-raising justification for thinking that people used to be inexplicable idiots. Nonetheless, I read these stories of house prices rising again and I cannot help but wonder. How is it going to end? How is it even supposed to end? What is Mark Carney’s golden future? Interest rates stay low, repayments stay low, house prices keep going up and then… what? How do all these people who have overextended themselves eventually underextend themselves so as not to be utterly buggered when rates finally