Will house prices crash by 20%? That’s what the economist Roger Bootle thinks. I don’t buy it I’m afraid. That’s not to say that economically speaking we won’t have a difficult time ahead. I think we will. Unemployment is going to rise, cuts will put strains on the economy and indeed spending cuts will be another jolt to the fragile recovery. Having said that, just because the economy suffers, it does not mean the housing market will follow suit. The only thing that will make the market crash is if interest rates rise substantially or if there is another massive oil price shock. However one thing we have learnt is that virtually every prediction made by experts turns out to be wrong! Ed Mead, Director from Douglas & Gordon thinks the market will be tricky, perhaps with a period of dull activity – yet he doesn’t subscribe to the idea that a crash is on the way.
We also discussed smoking. Martin Dockrell from ASH tried to convince me that we should rid ourselves of all advertising, promotion and activity by tobacco companies. What I don’t understand is why after all the bad press, health evidence and smoking bans – people still think smoking is cool. Yet a total ban doesn’t seem sensible to me.
We also discussed the news that J P Morgan might not set up their EU HQ in London. I do agree with my guest Simon Pitkeathley that this could be sabre rattling. Having said that the UK has a real opportunity to take the upper hand in the financial services industry and we have spent to long banker bashing.
Virginia Eastman from Heidrick & Struggles joined me to answer your employment questions. It seems very clear that whatever your job the market is going to be tough. Preparation, focus and clarity are important as is tenacity.
I’m back with you for Breakfast from 7am next Saturday