Comments: Slower growth, but no humble pie


Posted by gjhm at December 6, 2005 06:04 AM


Pressure gauge
Spiral disk heat interchanger
The chemical industry helps the medicinal preparation

Pah -it's still not a haiku!

But at least Gordon has had the sense to do a u-turn on property in SIPPs - 'to prevent the potential abuse'. Well, we can be sure the squeals of anguish that resulted have come mostly from those intending to abuse it to the hilt.

Having got that one right, Gordon then shoots himself in the foot with this extra tax on North Sea oil. What can he be thinking? Surely this is an invitation to BP and the like to spend their exploration and development budgets elsewhere. It wouldn’t be so bad if he’d applied the same ‘use it or lose it’ rule as for gas storage but oil companies can just leave North Sea oil in the ground and spend their money looking elsewhere. I hope he does another u-turn in March.

Posted by Sandid at December 6, 2005 11:05 AM

I don't think we should underestimate the significance of this SIPPS U-turn.

For quite a while the first rung of the housing ladder has been supported not by first-time buyers (priced-out), but by property investors/speculators. In the past year or so, the maths hasn't really stacked up for property investors/speculators either as yields have been exceptionally low.

However, the expectation of a fillip to the market on A day has kept the boom going much longer than it really should have, and I suspect the U-turn on SIPPS could be the trigger for a significant and long-overdue correction.

Posted by doogie at December 9, 2005 01:14 PM

Will the SIPPs U-turn remove a vital source of support from the housing market? I've never used this as an argument for predicting a soft landing, partly because of a suspicion that the Treasury would nip it in the bud, mainly because in macro terms the effect was always going to be small. Having said that, flats built by developers specially for the buy-to-let market were suffering before this and will suffer more now. But that won't drag the whole market down.

Posted by David Smith at December 9, 2005 05:53 PM