Fraser Nelson Fraser Nelson

The economy points to a two term Tory government

I’m now back from the recess and checking up on all the news I missed – the most striking of which seems to be how the economic stars are aligning for a Tory second term. Three things jump out:-

1. The downturn has only just begun: The political soap opera is so compelling that it’s easy to overlook that the property market is now falling faster than at any point in the 1990s. Commercial property down 16 percent and residential down 11 percent, on an annualised basis. As Britain has one of the closest links between house prices and consumer spending, you can’t say this will be isolated to the property sector. The projections for inflation are being revised upwards all the time. The CPI index, which Brown has successfully taught the media to call “inflation”, is 3 percent now and heading for 4 percent by Christmas – with food price inflation in double digits.

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