UK: From Housing to the High Street, a Nation Battens Down the Hatches
July 7th, 2008Via: Independent:
Ever since the Northern Rock crisis struck, seemingly out of nowhere, last autumn, there has been a sense that this was just a warning clap of thunder and that the real storm still loomed some way ahead. This week, that storm suddenly came a great deal closer, with a host of indicators showing just how justified were the qualms of British voters and consumers.
The most telling came from Marks & Spencer, Taylor Wimpey and John Lewis – emblems all of a peculiarly middle-class, middle-England solidity. The first reported a 5 per cent drop in like-for-like sales over three months, which led to 25 per cent being wiped off its share value. The building company had to admit that it had failed to raise the finance it hoped for, almost halving its share value at a stroke. The value of the company is now a fraction of what it was when the two companies – Taylor Woodrow and Wimpey – merged a year ago.
It will have escaped no one that the pain being felt by ordinary consumers and by the building giants is connected. For the best part of a decade, rising house prices have encouraged homeowners to feel richer than perhaps they really were, and helped to fuel the consumer boom of which the then chancellor, and now Prime Minister, was so proud.
Rather than a reasonable correction that would have re-established the virtues of sound credit and given hope, at long last, to first-time buyers, however, what the country has experienced in recent months has been the worst of two possible worlds. Credit has been squeezed to the point where the number of new mortgages has shrunk exponentially, almost freezing the housing market, while inflation has simultaneously reared its ugly head.
Food and energy prices have continued their relentless rise. It is no wonder that almost every consumer in the land – but above all, perhaps, families with middle-class expectations – has felt the pinch. And all the signs are that things will get worse before they get better. The summer holidays will drive the point home as Britons travelling abroad are not only stung by fuel surcharges, but also learn how far the pound has been devalued against the euro.
“It is no wonder that almost every consumer in the land – but above all, perhaps, families with middle-class expectations – has felt the pinch.”
Middle-class expectations. Its pretty obvious at this point that people holding such expectations are going to get clobbered.
I happened to see Gordon Brown, arch-globalist shill for the City of London, on C-SPAN the other day, complaining that people in the developed world have a lot of nerve expecting decent living standards. He seemed to be saying, “If Bangladeshis have to live in squalor, then so should people in the U.S., UK, Germany, etc., you know, for the sake of ‘global fairness’. Why can’t these knuckleheads appreciate what a win-win this sort of globalization is?”!
On Monday Gordon Brown was calling for British families to “eat less food” as a measure to deal with the rising cost of food. Next he will tell us to “have less children” (yeah, the kill-off scumbags will agree with him), and to “use less heating oil” come the winter. But what he won’t do is allow everyone to “pay less taxes” for his illegal wars, Big Brother society, etc. I hope he dies in agony.