If we (uk) had joined the euro in 99…would we of still had a housing boom ?
Why not? EU interest rates have been typically lower than the UK until the recent crash. Euro land banks have also had to be rescued from over exposed balance sheets and deposits guaranteed. The housing boom in this country was a direct result of this government removing houses from the calculations on inflation when it created the CPI and moved away from using the RPI. Had the retail price index been used inflation would have remained higher, interest rates would have been higher to curb the inflation, borrowing more difficult and costly and house prices would have been lower and more stable. But Brown wanted a big jump in asset values as part of his ‘feel good factor’ plan in raising taxes. People have loaded themselves with debt and if Darling and Brown think that putting off tax increases until a few years down the line is going to encourage people to spend more then they really are as stupid as they look at the moment. Banks aren’t lending because they have had their fingers burnt
