DAILY MAIL COMMENT: Pause new rate rises to ease mortgage pain
The fastest annual fall in house prices for 14 years should set alarm bells ringing in Downing Street.
Surging mortgage rates are putting off prospective buyers, stifling demand and creating huge financial hardship for millions who already own their homes.
It’s too early to predict the sort of collapse that saw an epidemic of negative equity in the late 1980s, but the signs are ominous.
Homeowners should be natural Tory voters. If they are pushed ever deeper into debt by flawed economic policies, however, many will inevitably lose faith.
Global factors such as the war in Ukraine and the energy crisis are chiefly responsible for the spike in inflation, which in turn made rate rises necessary.
House prices have fallen at their fastest rate in 14 years as surging mortgage rates put off prospective buyers (File photo: House for sale in Nottingham)
But the Bank of England must also shoulder some of the blame, having been far too slow to recognise inflationary pressures building.
Had it reacted sooner with small interest rate rises, the sharp and painful increases of recent months could have been averted.
Also, the Bank’s governor Andrew Bailey continued with quantitative easing – effectively printing money – for too long, further fuelling inflation. The effects of his being asleep on the job have been profound.
Interest rates had been expected to peak at the current 4.5 per cent before falling to 4 per cent by the autumn. Nationwide now predicts they will go up to 5.5 per cent and remain above 5 until the end of next year.
With the cost of living crisis still raging and taxes at a record high, this extra burden could send thousands of homeowners into a debt spiral – with potentially catastrophic electoral consequences for the Tories.
Rather than raising rates again, as expected, at its next meeting later this month, the Bank should press the pause button and give hard-pressed mortgage-holders some relief.
The Government too must look at ways to ease their burden – preferably by lowering taxes.
The Conservatives profess to be a party committed to a property-owning democracy, supporting striving families with tax cuts and a rolled-back state. It’s time they started acting like one.
Labour’s tax addiction
The Institute for Fiscal Studies says Labour’s spending pledges would leave a £20 billion hole in public finances, requiring the equivalent of a 3p income tax hike to fill (File photo: Sir Keir Starmer)
If disenchanted Tory voters are looking to Sir Keir Starmer to ease their financial worries, they should think again.
According to the Institute for Fiscal Studies, even the few spending pledges he has made so far – on foreign aid, policing, childcare and school breakfast clubs – would leave a £20billion black hole in the public finances.
That would require the equivalent to a 3p rise in income tax to fill. And the Labour leader has barely started.
IFS director Paul Johnson says the amount of money Sir Keir would raise by spitefully stripping the VAT exemption from private schools, and ending ‘non-dom’ tax status for wealthy individuals would be ‘drops in the ocean’ by comparison.
At least the Tories aspire to lower taxes. With Labour, now as ever, the sky’s the limit.
Taking on the mob
Some 200 trans rights activists tried to prevent gender-critical academic Dr Kathleen Stock (pictured) from speaking at the Oxford Union
‘Without freedom to explore controversial or offensive ideas, a university is nothing.’ So says Professor Arif Ahmed, the Government’s new free speech tsar.
Until very recently, his words would have been uncontroversial. In today’s febrile culture wars, they are a call to arms.
The attempt by some 200 trans rights activists to prevent gender-critical academic Dr Kathleen Stock from speaking at the Oxford Union was the latest example of cacophonous minorities trying to drown out and ‘cancel’ those they disagree with.
It is Professor Ahmed’s job to investigate and reverse this assault on the plurality of ideas. This mission is as urgent as it is vital. The Mail wishes him every success.
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