David Smith's picture
Affiliation: 
Sunday Times
Credentials: 
Economics editor

Voting history

House Prices and the UK economy

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Question 2: Do you agree that a more widespread weakening of the UK housing market will slow UK GDP growth significantly?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Housing transactions are clearly related to consumer spending and lower housing transactions will mean weaker economic growth. The RICS surveys, from the chartered surveyors, show a picture of weak demand and weak supply in the second-hand market. Both are reflecting a similar phenomenon: falling real wages and consumer worries about the outlook, including the outlook for employment. They are part of the same picture, in which we should expect a lower consumer contribution to UK economic growth.

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Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?

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Answer:
Disagree
Confidence level:
Very confident
Comment:
Though in past cycles falling house prices have rippled out from London to the rest of the country, there have been special factors behind the weakness of house prices in the capital recently, including the impact of stamp duty. I would expect to see house prices flattening nationally but would be surprised if there is a significant fall

Global risks from rising debt and asset prices

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Question 2: Is the loose monetary policy of major central banks responsible for the recent increase in global leverage or asset values?

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Answer:
Strongly agree
Confidence level:
Very confident
Comment:
It is hard to separate rising debt and inflated asset prices from the years of loose monetary policy. The question is how markets respond to the tightening of policy, and whether that response constrains central banks.

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Question 1: Does the world economy face heightened risks arising from an excess of public and private debt and/or inflated asset prices?

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Answer:
Agree
Confidence level:
Confident
Comment:
Asset markets appear to have been divorced from underlying economic realities for some time, so there are plainly risks. They are not on the scale of 2007-8 but are a source of concern.

Juncker's State of the Union Address

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Question 2: Do you agree that the euro has had more benefits than costs?

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Answer:
Disagree
Confidence level:
Very confident
Comment:
The euro has come through the crisis but it was touch and go and only happened because of an exceptional degree of official support. It was responsible for a second recession for Eurozone economies between 2011 and 2013, after the big recession in 2008-9. Its design remains flawed and membership has hurt some economies badly.

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