Thursday, 2 February 2012
At last, a success story
The Bank of England can rightly take credit for one achievement; they stemmed the house price crash. Prices have now flatlined for around two years. This is in stark contrast to the immediate post-crisis period, when prices were in free fall.
Stabilizing house prices required enormous effort. The Bank of England had to push the bank rate to almost zero, and print vast amounts of money; in part to prop up a bankrupt financial sector.
There were a few side effects, which is normal when any doctor applies strong medicine to an ailing patient. Economic growth has, for all practical purposes ceased.Savers have been ripped off while debtors have been protected. Inflation has picked up, and unemployment remains unacceptably high.
Still, it has all been worthwhile. Outrageously overpriced properties remain outrageously priced.
So, well done, Bank of England....