Typhoon Tory has Smashed the UK Economy

I don’t want to worry you, but the meeja seems to be skating over the worst aspect of the recent OBR report. They are forecasting a 9-10% fall in house prices with no recovery until 2027. That will impact on sales, building, conveyancing, and dozens of other associated trades and industries. The supply chain for house builders will see closures, and there will be four years without house growth.

It gets worse.

Given inflation is running at 10-11%, house prices will see a real fall in value of about 20%.

In reality, it’s an adjustment that was needed for house prices – which have risen 80% since 2009, set against a background of low economic growth and barely any increase in median wages. The result is UK house prices to incomes ratios have reached an all time high of over 7x. In London, according to the ONS, it is now at 13.7x, with Yorkshire, the NW, Wales, the NE, and Scotland keeping the average artificially lower than it should be. Moving from Scotland to London is now a matter of either being Royal, or winning the Lottery.
Mix in high interest rates, falling real incomes and economic uncertainty and you have a recipe for a protracted recession.

This makes me wonder if Labour *really* wants to win the next election. The mess the Tories have made and continue to make is going to put any incoming government in a very invidious position.

Not so much fixing the roof as having to rebuild the bloody house.

It’s like a typhoon has swept through the British economy, smashing everything in its path.

Everyone know what the elephant in the room is, but the electorate seems to have a residual marginal group of Brexiters that are hanging on to their beliefs despite all the evidence to the contrary. And these people are more determined voters than most. So, Labour can’t afford to spook them. Which is why the Tories move to a Switzerland position on Europe is welcome. Freeing up trade with Europe will certainly mitigate some of the worst effects of our impending recession, but it’s like adjusting the dial from Armageddon to Certain Doom.

Hang on to your hats, this isn’t going to be pretty.