Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
How to Trade Binance Vanilla Options for the First Time on Bitcoin Crypto's - 2nd Aug 21
From vaccine inequality to economic apartheid - 2nd Aug 21
Stock Market Intermediate Top Reached - 2nd Aug 21
Gold at a Crossroads of Hawkish Fed and High Inflation - 2nd Aug 21
Bitcoin, Crypto Market Black Swans from Google to Obsolescence - 1st Aug 21
Gold Stocks Autumn Rally - 1st Aug 21
Earn Upto 6% Interest Rate on USD Cash Deposits with Binance Crypto Exchange USDC amd BUSD - 1st Aug 21
Vuze XR VR 3D Camera Takes Near 2 Minutes to Turn On, Buggy Firmware - 1st Aug 21
Sun EXPLODES! Goes SuperNova! Will Any planets Survive? Jupiter? Pluto? - 1st Aug 21
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK House Values Have Fallen by 25%, Contributing to Labour Vote Meltdown

Politics / UK Politics May 23, 2008 - 05:19 PM GMT

By: Nadeem_Walayat

Politics Best Financial Markets Analysis ArticleWhilst the mandarins of the Labour government scratch their collective heads as to why the voters have lost total confidence in Gordon Browns government, one of the key reasons for the meltdown in the Labour vote in the Crewe and Nantwich by-election is the housing bear market.


12 Month rate
9 Months
Real Fall in House Values
House Price Fall (Halifax:NSA) -5%
inflation adjusted CPI 3.8% 3.80% 2.9% -7.9%
RPI 4.20% 3.2% -8.2%
RPI+1% - Real inflation 5.20% 3.9% -8.9%
GBP - Fall against Euro Adjustment 16% -25%


Therefore the UK economy has so far been hit by UK house price deflation of as much as 25%, this goes a long way towards explaining the 18% swing to the conservatives from Labour in the Crewe and Nantwich by-election.

Key Reasons for the Loss of Voter Confidence in New Labour:

1. Month on Month Losses in Home Equity Values - The equity withdrawal ATM money machine is GONE ! The credit crisis ensures the banks are not only reluctant to lend any more but know full well that we have not even passed the mid-way point of the credit crisis. Therefore the banks are cutting risk left right and center and where possibly forcing repayment of debts despite the UK government having thrown over £100 billion of tax payer liability at the banks to kick start lending.

The UK housing market is on track to continue the downtrend in line with the Market Oracle forecast for a 15% nominal price drop from August 2007 to August 2009. Which translates to an inflation adjusted drop on the RPI measure of 25%. Therefore New Labour hoping for an early turn around here is just wishful thinking.

2. Surge in Food and Fuel inflation that has completly discredited the manipulated CPI inflation measure, that is not only weighted in favour of deflationary items such as clothing and luxuries but also excludes huge items of monthly costs such as council tax and mortgage interest payments and therefore is not reflective of the surge in the cost of every day necessities that is experiencing inflation in excess of 10%. The real overall rate of inflation for most people is estimated to be in the region of RPI + 1%, this 5.2%. Therefore pay deals linked to the CPI are causing rebellion amongst public sector workers as evidenced by the recent teachers strike.

3. Economic meltdown - The UK economy is fast decelerating as indicated by the recent economic data. In December 07 the governments overly optimistic growth forecast for 2008 of 2.5% is clearly shown as electioneering propaganda as the government attempted to lay the grounds for election during the summer of this year ahead of the real economic crunch expected to occur during 2009. The actual economic trend is in line with the Market Oracle forecast of Dec 07 for UK GDP growth for 2008 of between 1% and 1.3% which may not be a recession but by years end will definitely feel like a recession as the unemployment trend turns decisively higher.

4. TAXES and Incompetent Government - The fact of the matter is Gordon Browns government is incompetent, and in that respect is showing the whole public sector to be incompetent. For years voters have worried over the spending black holes such as the NHS that have sucked in hundreds of billions with little output. We have witnessed a tripling in the NHS budget with barely a 30% increase in output. We have witnessed greedy GP's pocketing money meant for improving patient healthcare by tripling their salaries, then smooth talking doctors doing the rounds on breakfast TV proclaiming that the reason why many of the deprived wards of the country have worse life expectancy than third world countries is due to lack of government funding. Lack of funding ? More like systematic lack of public sector competence where annual pay rises of 33% are accompanied by less hours worked as Labour incompetence has repeatedly awarded GP's.

The voters have had enough and are crying out for a leader to bring the countries economy and finances under firm competent control. If today's voters find Britain's condition as worrying, then by this time next year the people of Britain will be panicking in the face of continuing loss of wage purchasing power as the country enters stagflation.

Labour is heading for political meltdown at the next election and the only person to blame for this is Gordon Brown who set Labour's meltdown in motion when he bottled out of calling the October 2007 election.

The reason why Margaret Thatcher lasted 11 years and Tony Blair lasted 10 years as Prime Ministers is because they both had vision of where they were going and when they made a decision, for better or worse they stuck to it. Famously, Margaret Thatcher's speech at the party conference stated 'U-turn if you want to the Ladies not for turning', and she never did! Gordon Browns problem is that he has shown himself to be a ditherer, where virtually every major decision be it NO to nationalisation of Northern Rock, or the abolishen of the 10% tax band are followed by a near panic U-turns that give no confidence in his ability to manage the country and hence implies Britain will drift from ever deepening crisis to crisis.

Sorry Gorden, Your not good enough, Your Fired!Gordon's Tax U-Turn to buy votes ahead of the by election was a clear example of the ever increasing inflationary lengths that a government in panic will go to in an attempt at buying the next election. Therefore Britain is not just in for a hard 2 years but the consequences of rampant money supply growth and debt build up in the face of crude oil sparked stagflation will be with us for more than 5 years.

Time is running out for Gordon Brown's premiership, at the rate of disintegration being observed he may not even last the rest of this year before a leadership challenge ends his premiership a little over a year after he deposed Tony Blair from the top job. Backbench MP's are now in open revolt as hundreds face joining the growing unemployment queues at the next election, and with all the signs that the UK economy will suffer for the remainder of this year and the failure of his £2.7 billion voter bribe, there does not to seem to be any clear solution to New Labour's political woes.

More Articles on Why New Labour is Experiencing Voter Meltdown

13 May 2008 - Caroline Flint UK Housing Market Briefing Notes in FULL
13 May 2008 - UK Tax U-turn Rebates to Buy Votes- Personal Allowances Up by £600
13 May 2008 - UK Flawed Inflation Measure Explodes Higher, 3% CPI, 4.2% RPI
08 May 2008 - UK House Prices Tumbling- Interest Rate Conundrum
03 May 2008 - Gordon Brown is New Labour's Grim Reaper
24 Apr 2008 - Teachers Strike as Real Inflation is Far Higher than the CPI
23 Apr 2008 - Gordon Brown's Tax U-Turn as Anticipated- Your Fired!
21 Apr 2008 - Bank of England Throws £50 billion of Tax Payers Money at the Banks
19 Apr 2008 - Gordon Browns Abolishment of the 10% Tax Band- Leadership Challenge?
16 Apr 2008 - Bank of England Prepares to Ramp Up the Money Printing Presses
08 Feb 2008 - UK House Prices on Target for 15% Fall Despite Interest Rate Cuts
20 Nov 2007 - UK Public Sector Incompetence Sinks to New Low - Loss of 25m UK Child Benefit Records
06 Oct 2007 - Gordon Brown Panics - NO UK Election in 2007 or 2008!
06 Oct 2007 - Gordon Brown Bottling Out of Calling a UK General Election As It All Goes Wrong

 

By Nadeem Walayat

Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Attention Editors and Publishers! - You have permission to republish THIS article if published in its entirety, including attribution to the author and links back to the http://www.marketoracle.co.uk . Please send an email to republish@marketoracle.co.uk, to include a link to the published article.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in