U.K. Economy picking up?

WAITROSE ARE GOING TO OPEN 300 NEW STORES IN NEXT FEW YEARS,AND I THINK MORRISONS ARE GOING TO EXPAND AS WELL.

Bank targeted growth for rate decisions, Ben Broadbent says
A Bank of England policymaker has admitted the widely-held belief that interest rates have been set in response to changes in growth rather than the official inflation mandate.

Economists have long suspected the Bank was targeting growth because inflation has been well above the 2pc target for the bulk of the past five years Photo: EPA
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By Philip Aldrick, Economics Editor
7:01PM BST 23 Sep 2013
39 Comments
Ben Broadbent, an external member of the Monetary Policy Committee (MPC), made the revelation as part of an attempt to explain the Bank’s new 7pc unemployment target, which he claimed was now more relevant than growth due to productivity bottlenecks in the economy.

Economists have long suspected the Bank was targeting growth because inflation has been well above the 2pc target for the bulk of the past five years. The Bank has always been careful to stress its inflation-fighting credentials, though.

In a speech to the London Business School, Mr Broadbent said the statistical evidence proved the MPC had used growth throughout the past decade as a proxy for the future direction of inflation.

“UK monetary policy responded sensitively, immediately and more or less uniquely to actual growth in output,” he said. “The reason, I believe, is that every acceleration in output was thought to represent a rise in output gap, signalling higher inflation risks, every drop in growth the opposite.”

With the economy now suffering from a complex productivity problem, he argued that unemployment is a better gauge of how rapidly inflation will pick up.

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He said: “The answer is to respond less sensitively to output and more to developments in the labour market, even if you have to wait for a while to see them. Changes in unemployment are now a more reliable measure of what’s happening to the degree of slack in the economy than economic growth alone.”

If unemployment falls more quickly that the Bank’s latest forecast, “it would be right to ask whether we should think about withdrawing some of the monetary stimulus currently in place” by raising rates, he said. “If unemployment declines more slowly it would be right to leave the monetary stance unchanged for that much longer.”

Markets currently reckon rates will start to rise in early 2015, about 18 months earlier than the Bank has signalled.

Mr Broadbent suggested they could be right. The rate at which unemployment falls will be “something the MPC, along with the rest of the world, will reassess over time”.

He added that the UK’s productivity problem, which means it now takes longer to produce something than six years ago, could be linked to the banks.

“The suggestion here is that the crisis may have impaired the economy’s ability to channel finance away from areas where demand and profits have fallen and towards those where they’ve both risen,” he said. “It is generally the case that, during and immediately after big financial crises, and even allowing for the depth of the downturns, productivity growth is lower than in other recessions.”

Mr Broadbent also said the economy “has clearly picked up significantly faster than the majority of forecasts made last year”.

Pound rises after Bank of England Governor Mark Carney sees no need for more QE
Mark Carney, the Bank of England Governor, sees no need for more stimulus for the economy given the gathering pace of the recovery, sending the pound higher.

Mark Carney, the Bank of England Governor, said the recovery was broadening across the country.
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By Martin Strydom
7:09AM BST 27 Sep 2013
Comment
He said the central bank would consider the case for adding to the £375bn it has already pumped into the economy should the recovery falter

"But my personal view is, given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," he said in an interview with the Yorkshire Post published on Friday.

The pound rose 0.4pc against the dollar to $1.6135 at 6am in London.


The pound spiked after Mark Carney said he saw no need for more QE. Graph: Bloomberg

Mr Carney said the recovery was broadening across the country and had been helped by a rise in growth in Europe and the United States.

“The advanced economies as a whole are doing a bit better. That’s going to help the UK as a whole. These are more traditional export markets so that matters," he said.

"Within the UK, we are probably leading the pack of the major advanced economies as we speak right now. But of course we had the deepest recession so we are coming back from that."

Mr Carney said the sustainability of the recovery would be underpinned by getting more people into work and increasing wages.

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"That’s going to come from sustained demand and a balanced recovery,” he said.

Mr Carney said the housing market has seen a turnaround, but levels of activity are still only around two thirds compared to longer-term averages for the sector.

ONS figures this month showed that while prices in London have risen 10pc since financial crisis, those in the rest of the country have only gained 0.8pc.

He said the Bank of England need to be "vigilant" about a possible housing bubble developing. George Osborne has responded to fears about his Help for Buy scheme driving a housing boom with plans to give the central bank powers to intervene.

Mr Carney also defended the Bank’s new forward guidance policy.

“This is a policy for the UK as a whole and the point is that businesses and households understand that we are not going to look to raise interest rates until we see the economy really growing."

He reiterated the need for Britain’s banks to be stronger.

“You can’t lend unless you’re adequately capitalised and that’s been proven time and time again and getting the UK banks and building societies to that capital threshold has been incredibly important.” Mr Carney said.

Pound rises after Bank of England Governor Mark Carney sees no need for more QE
Mark Carney, the Bank of England Governor, sees no need for more stimulus for the economy given the gathering pace of the recovery, sending the pound higher.

Mark Carney, the Bank of England Governor, said the recovery was broadening across the country.
Find out if anything is affecting your credit rating. Check your credit score with Experian here.Advertisement
By Martin Strydom
7:09AM BST 27 Sep 2013
Comment
He said the central bank would consider the case for adding to the £375bn it has already pumped into the economy should the recovery falter

"But my personal view is, given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," he said in an interview with the Yorkshire Post published on Friday.

The pound rose 0.4pc against the dollar to $1.6135 at 6am in London.


The pound spiked after Mark Carney said he saw no need for more QE. Graph: Bloomberg

Mr Carney said the recovery was broadening across the country and had been helped by a rise in growth in Europe and the United States.

“The advanced economies as a whole are doing a bit better. That’s going to help the UK as a whole. These are more traditional export markets so that matters," he said.

"Within the UK, we are probably leading the pack of the major advanced economies as we speak right now. But of course we had the deepest recession so we are coming back from that."

Mr Carney said the sustainability of the recovery would be underpinned by getting more people into work and increasing wages.

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"That’s going to come from sustained demand and a balanced recovery,” he said.

Mr Carney said the housing market has seen a turnaround, but levels of activity are still only around two thirds compared to longer-term averages for the sector.

ONS figures this month showed that while prices in London have risen 10pc since financial crisis, those in the rest of the country have only gained 0.8pc.

He said the Bank of England need to be "vigilant" about a possible housing bubble developing. George Osborne has responded to fears about his Help for Buy scheme driving a housing boom with plans to give the central bank powers to intervene.

Mr Carney also defended the Bank’s new forward guidance policy.

“This is a policy for the UK as a whole and the point is that businesses and households understand that we are not going to look to raise interest rates until we see the economy really growing."

He reiterated the need for Britain’s banks to be stronger.

“You can’t lend unless you’re adequately capitalised and that’s been proven time and time again and getting the UK banks and building societies to that capital threshold has been incredibly important.” Mr Carney said.

AMAZON AND ARGOS ARE TO EMPLOY/10,00/15,00 MORE PEOPLE THIS XMAS

Badboy wrote:AMAZON AND ARGOS ARE TO EMPLOY/10,00/15,00 MORE PEOPLE THIS XMAS

They will be packers Badboy , altthough Argos has Stores as well /.

Google is celebrating it's 15th Birthday today. When it first started it's average number of searches per day was almost 10,000.....today it is 10 BILLION.

It,s share value is practicaly incalculable.!!!!!

ALDI TO OPEN 50 MORE STORES THIS YEAR

POUNDLAND ARE TO OPPEN MORE STORES.

Boomtime: Britain bounces back

Share prices, house prices, luxury cars... The recession is over and the country has started spending again







Plasterers and joiners are, he adds, also seeing a return to the glory days – echoes of a time when Harry Enfield, with his 'Loadsamoney' character, parodied the seemingly endless cash being earned by tradesmen Photo: REX









By Harry Wallop, and Theo Merz

8:48PM BST 11 Oct 2013



49 Comments





A mere 20 yards from the London Stock Exchange, workers on their lunch break are in buoyant mood. Oysters are being shucked in the Paternoster Chop House (£12.50 for half a dozen), while pints are being poured in the neighbouring pubs that shelter in the great shadow of St Paul’s Cathedral.


And no wonder. The Royal Mail share sell has been met with an enthusiasm not seen since the bonanza days of Thatcherite privatisations. Some 730,000 private investors tried to buy stock – with a minimum order size of £750 – pointing to an army of optimistic ordinary savers, desperate to invest their money. After manic trading, the shares closed up 38 per cent yesterday, presenting an immediate paper profit of £285 to those 690,000 retail investors who got their hands on an allocation.


Five years after the devastating collapse of Lehman Brothers, which almost overnight sucked hope out of the Square Mile, things are looking bright once again, as City workers relate over their lunch.


“I travel in from Luton, and by Harpenden people are really struggling to get a seat,” says Steve Victor, an IT services manager who works for an investment firm. “Just a few months ago that didn’t happen until St Albans [seven miles down the line]. That shows how many more people have got jobs.”


His colleague, Christopher, an IT consultant for a City recruitment company, has a similar story. “There was just no spending for two or three years. But apparently they’ve now been given a blank cheque – in the last few weeks, they suddenly have a big pot of dollars to spend.”



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A few steps down the road, Michal Marchwiany, manager of The Duke and Duchess pub, is pouring glasses of wine and explaining how he has already filled up his slots for the Christmas party season. “Three years ago the atmosphere was pretty sad and very quiet, but it is so much busier now. There’s money around.”

There is indeed money around. Boomtime Britain is back – if not with a cacophony of champagne corks, then certainly with a clink of prosecco glasses.

The Royal Mail shares frenzy has capped a slew of economic news that suggests the UK is enjoying a fully fledged recovery – and one that is not confined to the swankiest postcodes of the capital. Many ordinary Britons may not yet feel it, but the economy is officially warming up. Not only has the International Monetary Fund upgraded its forecasts, predicting a growth of 1.4 per cent this year (double the estimate it put out in April), but the Office for Budget Responsibility has said that the Government’s austerity programme – which the Labour Party said would stifle economic growth – has not affected the pace of recovery.

The most dramatic data come from the housing market. The Royal Institution of Chartered Surveyors (RICS) said this week that house prices rose at their fastest rate in 11 years in September, while the Council of Mortgage Lenders reported that banks and building societies had given out 15 per cent more mortgages than in the same month a year ago.

This is before the Government’s Help to Buy scheme, the latest phase of which came into effect this week, kicks in fully. Estate agents report that gazumping has returned, and not just in London where a flat – or should that be broom cupboard – measuring 10ft by 11ft, in less than glamorous Camberwell, was sold for £85,000 last week. Paul Perriam, a chartered surveyor in Nottingham, calls his experience in the Midlands “comparable to the boom market of 2006”.

Indeed, whispers of a “bubble” have already begun. Howard Archer, economist at IHS Global Insight, is one of many experts concerned about the housing market overheating in London. “But talk of a bubble outside of London is not correct,” he notes. “If you look at the latest data from Nationwide, 11 of the 13 regions of the country are still below their 2007 peak levels.”

The key thing for Archer is not rising prices, but the increase in housing transactions we are seeing – more properties changing hands. “First of all, it helps tax receipts,” he says. “And it generates business for all the estate agents, surveyors and lawyers. And, if you move house, you may well buy yourself a new washing machine or carpet – increased housing transactions help boost retail sales.”

There are definite signs that this virtuous cycle is starting. The average number of homes sold per chartered surveyor in the three months to September reached 18.7, according to RICS. Although still historically low, this is the highest number since late 2009.

A booming housing market, and Government intervention, is also helping to drive a dramatic – and much-needed – pick-up in construction. Some of the biggest beneficiaries have been bricklayers, many of whom abandoned the industry when house-building ground to a halt four years ago.

Nick Hammond, managing director of Brick Baron, a bricklaying contractor based in Beverley, Yorkshire, says: “I’ve been in the industry for 28 years and this is the best I’ve ever seen it. In my experience there’s absolutely been a boom, we noticed the change in the last three or four months. We couldn’t have foreseen it.

“The labour prices have increased by nearly 100 per cent. It’s down to the upturn of work in the housing sector and the lack of bricklayers in the industry. They are able to drive the prices up themselves.” The rates are per thousand bricks, rather than hours, he explains. “Three or four months ago the average was £250 a thousand – it’s up to £380 now and it’s going to be £400 soon.”

In response to demand, he has doubled his workforce. Plasterers and joiners are, he adds, also seeing a return to the glory days – echoes of a time when Harry Enfield, with his “Loadsamoney” character, parodied the seemingly endless cash being earned by tradesmen.

As if to underline this suggestion that the Thatcher boom years may be back, Jaguar – one of the last great car manufacturers in Britain – has been reporting record profit growth. David Gidman, a senior car salesman in Stratstone, Manchester, says: “I’ve got 24 years’ experience of sales, and in the Jaguar world it’s probably the best I’ve ever seen it.”

It is, undoubtedly, hard to square this exuberance with the news that energy companies are putting up their prices again and that the Red Cross will be helping to run food banks in Britain, the first time it has operated in this country since the Second World War. Economists say that it is understandable that the majority of consumers – those not working in construction, housing or the City – will not feel any better off.

The most recent figures suggest consumer prices are rising at 2.7 per cent, but average wages are only going up by 1 per cent, a depressing phenomenon that has made most of us feel consistently worse off over the last five years.

Vicky Redwood, economist at Capital Economics, says: “Consumers’ budgets are still being squeezed. It will take time for inflation to dip below wages growth.

“But things are moving in the right direction. The return to normality is not far off.” By next summer, she believes, employees should finally see their pay packets increase by more than consumer prices. That, then, should further help growth.

Howard Archer, too, is cautiously upbeat. “The economy is still vulnerable to shocks, but my feeling is that there is an improvement and we should be able to carry on growing,” he says. “Consumer confidence has been moving up strongly in recent months. Obviously, that has been from a very low base and we’ve had a decent summer, with sporting success, a royal baby – that all helps matters.

“But what really fuels consumer confidence is people becoming more optimistic. Hopefully what you get is people spending a bit more, then that boosts the economy and helps employment, and if more people are employed then that pushes up wages.”

Back in the City, a mere 50 yards from the Bank of England, Simpson’s Tavern is heaving with lunchtime drinkers. Jean, the barmaid, has seen more City booms and busts than most of her customers, having worked in the restaurant since 1978.

“In the last few months customers have seemed happier. You certainly don’t see so many people coming in with their carrier bags of…” she trails off, referring to the tens of thousands of City workers who lost their jobs in the recession, usually escorted off the premises with their desk contents in a bin liner.

“I mean it’s not like the Eighties. Gosh, there was mega‑money then. But there’s a nice atmosphere.”

And, after five years of gloom, for most of us “a nice atmosphere” will do just fine.

I must remember that the economy is booming when and if my 1% pension increase gets paid...

malena stool wrote:I must remember that the economy is booming when and if my 1% pension increase gets paid...

Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Panda wrote:

malena stool wrote:I must remember that the economy is booming when and if my 1% pension increase gets paid...

Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Absolutely Panda, but we have no British owned industry worth speaking of anymore, the profits from our few remaining export facilities goes overseas to foreign business's who often resist or flatly refuse to pay British taxes.

malena stool wrote:

Panda wrote:

malena stool wrote:I must remember that the economy is booming when and if my 1% pension increase gets paid...

Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Absolutely Panda, but we have no British owned industry worth speaking of anymore, the profits from our few remaining export facilities goes overseas to foreign business's who often resist or flatly refuse to pay British taxes.

I don't think I have ever known such inept Politicians malena, not one department functioning well and at a time when we need strong ledership and bright ideas it's a void.

Panda wrote:

malena stool wrote:

Panda wrote:

malena stool wrote:I must remember that the economy is booming when and if my 1% pension increase gets paid...

Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Absolutely Panda, but we have no British owned industry worth speaking of anymore, the profits from our few remaining export facilities goes overseas to foreign business's who often resist or flatly refuse to pay British taxes.

I don't think I have ever known such inept Politicians malena, not one department functioning well and at a time when we need strong ledership and bright ideas it's a void.

Their only talents Panda, revolve around the telling of bare faced lies and filling their own and their friends pockets from the public purse and insider trading. The trouble is we allow them to do it. Almost anywhere else in the world the electorate would have been on the streets in revolt.

malena stool wrote:

Panda wrote:

malena stool wrote:

Panda wrote:

malena stool wrote:I must remember that the economy is booming when and if my 1% pension increase gets paid...

Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Absolutely Panda, but we have no British owned industry worth speaking of anymore, the profits from our few remaining export facilities goes overseas to foreign business's who often resist or flatly refuse to pay British taxes.

I don't think I have ever known such inept Politicians malena, not one department functioning well and at a time when we need strong ledership and bright ideas it's a void.

Their only talents Panda, revolve around the telling of bare faced lies and filling their own and their friends pockets from the public purse and insider trading. The trouble is we allow them to do it. Almost anywhere else in the world the electorate would have been on the streets in revolt.

I read somewhere that Britain has one of the lowest records of voting in Elections and this is why they moan, but don't do anything about it. Is there anything the Public have demonstrated against that has resulted in a U turn by the Government?

Panda wrote:

malena stool wrote:

Panda wrote:

malena stool wrote:

Panda wrote:Hi malena, I substantially overpaid my Gas and Electricity supplier , so much so that the refund I will get almost pays for my Christmas Holiday. I was asked if I wanted to reduce my direct debit but warned Prices would probably go up this Winter so I said it was O.K. to leave it as it is. When the Government says the economy is improving, it is House Building which is lifting the economy. The Banks are starting to lend money for House buying,
but the Government fails again to accept that House buying will result in another default on Mortgages ect. It is manufacturing and Exports which arre
needed.

Absolutely Panda, but we have no British owned industry worth speaking of anymore, the profits from our few remaining export facilities goes overseas to foreign business's who often resist or flatly refuse to pay British taxes.

I don't think I have ever known such inept Politicians malena, not one department functioning well and at a time when we need strong ledership and bright ideas it's a void.

Their only talents Panda, revolve around the telling of bare faced lies and filling their own and their friends pockets from the public purse and insider trading. The trouble is we allow them to do it. Almost anywhere else in the world the electorate would have been on the streets in revolt.

I read somewhere that Britain has one of the lowest records of voting in Elections and this is why they moan, but don't do anything about it. Is there anything the Public have demonstrated against that has resulted in a U turn by the Government?

There were fears by police leadership that there is a potential in the UK for civil unrest. http://www.telegraph.co.uk/news/politics/8001113/Cuts-will-bring-civil-unrest-says-police-leader.html David Icke, although a bit of an odd ball to say the least, agrees that there is a real fear that uncontrolled immigration and Islamic rantings will or could spread rioting and civil disturbances to our streets. https://www.youtube.com/watch?v=PrSDlruUS9c  
U.S. General Martin Dempsey, says he is concerned about "the potential for civil unrest" in Europe because of the financial crisis. http://www.bbc.co.uk/news/world-us-canada-16122887

The General strike in 1926 when UK armed forces were put on standby, tanks and armed infantry with bayoneted rifles patrolled the streets, artillery pieces were prepared on Hyde Park, armed forces escorted food lorries. Fighting between police and strikers occurred in many cities across the UK, police charged strikers with batons. The government recruited thousands of special police and actually sent a warship off the coast at Newcastle.

There was the Jarrow march, back in 1936, when the population peacefully protested against poverty and unemployment.

As for bringing about U turns by our 'Honourable Members' these 'protests' brought about negotiations which would not have occurred if they hadn't have been challenged.

MARKS AND SPARKSMETHINKS,ARE GOING TO EXPAND

Badboy wrote:MARKS AND SPARKSMETHINKS,ARE GOING TO EXPAND

So what is M & A Badboy....a store selling clothing and food. !!!!! We need to be exporting to help the economy.

By Philip Aldrick, Economics Editor

7:33PM BST 25 Oct 2013



Comments118 Comments





Stronger growth will boost tax revenues and lower spending, helping the Chancellor bring borrowing under control earlier than currently forecast.


Michael Saunders, UK economist at Citi, predicted that the Office for Budget Responsibility (OBR), the Government’s independent forecaster, will lower its deficit projections by £11bn this year, £19bn in 2014, and £25bn in 2015 when its latest UK outlook is published on December 4 to coincide with the Chancellor’s Autumn Statement.


He added that debt should be falling as a percentage of GDP in 2016, a year earlier than currently expected but still a year later than the Chancellor’s original target.


The promise of a sharp improvement in the public finances came after the Office for National Statistics (ONS) revealed that third-quarter GDP increased by 0.8pc, with all sectors expanding for the second quarter running.


Samuel Tombs, of Capital Economics, said this looked likely to be the best performance of the G7 nations. Over the six months to September, the UK grew at an annualised rate of about 3pc, the ONS said, above the 2.2pc trend.


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“Britain is booming again, with the economy showing the most sustainable and robust-looking upturn since the financial crisis,” Chris Williamson, chief economist at data providers Markit, said.

The bulk of the growth came from the UK’s dominant services sector, which accounts for three-quarters of national output, but there was also a sharp rise in construction and manufacturing. Both sectors suffered a deep recession in the past two years, but have now been growing strongly for six months. Construction expanded by 2.5pc in the quarter and manufacturing by 0.9pc.

The economy could have grown 0.9pc had it not been for the steepest fall in gas and electricity production since 1994, the ONS said. Despite the rebound, the UK remains 2.5pc smaller than its pre-crisis peak in early 2008. The services sector has finally recovered all the lost output, and is now 0.4pc larger, but the construction and manufacturing sectors are still 12.5pc and 8.9pc smaller respectively.

The Chancellor would welcome a boost to the public finances. He is projected to borrow £78bn more this year than expected when the Coalition came to power, as the recovery turned out to be the slowest in more than 100 years. However, he has signalled that there will not be a tax giveaway.

“The Chancellor is unlikely to change fiscal policy significantly in the Autumn Statement,” Mr Saunders said.

London’s astonishing boom can lift the whole of Britain




By Benedict Brogan Politics Last updated: October 28th, 2013

458 Comments Comment on this article




Wealth is flowing to the undisputed capital of the world – but with it comes a political test

Buy a plot of land. Conjure the image of a collection of sumptuous residences packed with the latest designer must-haves. Give it a view, something that will make it iconic and desirable. Persuade the rich and influential with money to burn to buy a share before a spadeful of clay has been turned. Then wait for the cash to roll in and use it to fund your next scheme. That’s how the developers racing to crowd London’s skyline with glass and steel towers operate. But it’s also how their predecessors worked in the 18th century to build the Georgian squares and terraces we celebrate as the capital’s architectural signatures.

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Back then it was aristocrats looking for somewhere fashionable to spend the season away from their remote estates. Now it’s Chinese, Russian and Arab billionaires who are seeking a place close to Sloane Street’s boutiques and far from the political uncertainty back home. For centuries, London has been both a magnet for wealth, and its generator. Yet the scale of today’s speculative property boom surpasses anything the capital has seen. Londoners are gripped by the idea of prices rising by 10 per cent a year or more. Politicians are worried by it. Churchmen cite it as evidence that something is morally wrong with the country. The world is piling in to London. Who benefits?

Anyone fortunate enough to live within sight of the centre will be familiar with the way, in every direction, that London is being altered before our eyes. To the east, the Shard, the tallest building in Europe, from where the mega-rich, able to spare £50 million for an apartment, will be able to gaze down at the teeming city beneath them. South, the turbines of Strata at Elephant and Castle announce what will eventually be a collection of towers in one of Europe’s biggest public regeneration projects. West, the Vauxhall tower marks out the entrance to the Nine Elms development, another vast effort claiming to be the biggest something somewhere. And north of the river, in the City, the Walkie Talkie and the Cheesegrater have crowded out the Gherkin and will soon be competing with the Heron tower and a lengthening list of architectural audacities.

The dome of St Paul’s gets smaller and smaller, and has long ceased to be the metropolis’s focal point. In every direction we see foreign money: the Shard is owned by Qataris; 40 per cent of new flats at Elephant are earmarked for overseas buyers – in a part of town most Londoners would otherwise avoid; the next mega tower at Vauxhall will be the tallest residential building in Europe, topped by the first five-star hotel built overseas by China’s Wanda group, who plan to take on the likes of the Dorchester. Take a river taxi from Westminster to Greenwich, and beyond Tower Bridge the Thames is a canyon of luxury apartments built into the wharfs where the wealth of empire was unloaded before the last war. Derelict warehouses have been turned into the lofts and studios of London’s gilded professionals. The development continues downstream, far past what were London’s old limits, towards the sea, boxes of flats built to answer an insatiable demand for property.

No wonder visitors to London express surprise at the Babel of the place. Listen out on a Tube ride across Zone 1 and the voices are usually not English. Interrogate a waiter at just about any restaurant or even fast-food outlet and most likely what English there is will be spoken as a second language. When the Archbishop of Canterbury mused recently that even for his family of Londoners, returning to their native city after a spell in Durham “was like moving to a different country… we almost needed a passport”, he was expressing surprise not just at London’s foreignness but also the stark disparities in wealth between the capital and the country beyond the M25.

Like the rest of us, he is no doubt mesmerised by the way London has become, in scarcely a decade, not an independent city-state as some would wish, but the undisputed capital of the world. There is now no city to rival its attraction as the place the hyper-wealthy and successful gravitate to. A weak pound, capital markets searching for a place to park their wealth, the uncertainties of the eurozone all contribute. More than that, though, London is the global sweet spot where legal certainty, tax efficiency, cultural attraction, social tolerance and educational potential come together in such an enticing formula.

That much was obvious in China a fortnight ago among the entrepreneurs George Osborne met on his trade mission. The Chinese government’s willingness to certify London as the first outside trading centre for their renminbi currency was a big moment (as in fact is this week’s World Islamic Economic Forum, also in London, also underscoring the City’s place as a market for finance in the Islamic world). But it goes beyond matters of bilateral trade. What we imagine – and market – as Britishness is in reality Londonness. To Chinese entrepreneurs the United Kingdom is a city that, despite visa restrictions, they know better and better. And it isn’t just the Chinese. Russians, Greeks, Syrians, Lebanese and Brazilians all flock to London with their suitcases of cash – an eye-watering £83 billion by one recent estimate – to buy up property and gain a foothold in a reliable place in an unreliable world.

As it intensifies, so the London boom intrudes into politics. Some want it tamed. The growing challenge for the Chancellor is to use London’s foreign appeal for Britain’s benefit. For far from being a problem, the capital’s runaway success is one of the country’s greatest weapons in the global race David Cameron keeps mentioning. Anything that puts us on the map and attracts the attention of rootless capital is to be nurtured and developed. Mr Osborne has said plenty about what he is doing to ensure London’s success benefits the rest of the UK. Increasingly he has evidence.

At some point, the Government will publish figures for tax revenues, specifically stamp duty, which show levels surpassing all expectations. Not only did introducing a swingeing 15 per cent recurring levy on properties held by off-shore companies drive plenty of buyers to switch to pay high levels of stamp duty, but it appears a good number of wealthy foreigners are more than happy to pay the charge, enriching the Exchequer still further. Indeed, it is tempting for the Treasury to conclude that there is more to be plucked from this golden goose than initially realised. First non-doms, then company-held property, next the foreigners queuing at property fairs in Singapore and the Gulf to buy a little piece of London off-plan, with no intention of ever living there: the political case for monetising this wealth looks increasingly attractive.

As London grows, so must the rest of the UK. No doubt with an eye on his friend and rival Boris Johnson, Mr Osborne is set against a politics that would handicap London to the advantage of the rest of the country. A rising tide should lift all cities. Everything from major science investments in Manchester to new schools across England to HS2 is designed to rebalance the economy to help the areas beyond the City to benefit. But his task now is to tell a story of London that celebrates its uniqueness once again as the centre of the world, while resisting those who, as Cobbett once did, are coming to loathe “the great wen… the metropolis of the empire”.

The Economist, 8 November 2013
Britain is at a crossroads, warns The Economist. The weekly identifies three major political hazards on the horizon: the probability that voters will send “a posse” from the populist UK Independence Party to Brussels in 2014 European elections, a Scottish independence vote in September of the same year, and a referendum on Britain’s membership of the EU, supposed to take place by the end of 2017, which could split the ruling Conservative Party.

Voicing its support for a “Great Britain”, i.e. one that includes Scotland and remains in Europe, the weekly notes that the kingdom —

… could emerge from all this smaller, more inward-looking and with less clout in the world (and, possibly, with its politics fractured). Or it could become more efficient, surer of its identity and its place in Europe and more outward-looking. [...] Mr Cameron has lurched alarmingly, sometimes saying Britain is committed to reforming the EU for the good of all, at other times threatening to leave if unspecified demands are not met. The first course is the astute one — both less likely to lead to a calamitous British exit and more likely to succeed in making the union more liberal.

Panda wrote:http://www.telegraph.co.uk/finance/economics/10440062/Fresh-signs-of-recovery-spur-hopes-for-growth.html

Ah, wonderful... the economy is on the up...again.

Strangely none of these perpetual 'new' forecasts of 'booms' ever percolate down to benefit the working population who, for one reason or another are continually being evicted from their homes, forced out of their jobs and replaced by cheap migrant labour from across the world.

The titled, the rich and their rent boy lovers have created a 3rd world country just off the coast of Europe.

malena, when the unemployment rate decreases I will have some faith. The latest article on the EU I posted looks as if they have their problems as well.

One bit of News... Saudi Arabia is throwing out ALL Foreign workers. Obviously because of what happened in Syria and other middle east Countries.
One Guy , don't know where he came from, brandished his Passport and said he has been working in Saudi for over 3 years.

Pity Britain hasn't done the same , except for Professional people like Doctors, Nurses etc.

Panda wrote:malena, when the unemployment rate decreases I will have some faith. The latest article on the EU I posted looks as if they have their problems as well.

One bit of News... Saudi Arabia is throwing out ALL Foreign workers. Obviously because of what happened in Syria and other middle east Countries.
One Guy , don't know where he came from, brandished his Passport and said he has been working in Saudi for over 3 years.

Pity Britain hasn't done the same , except for Professional people like Doctors, Nurses etc.

The good ones anyway