Last chance saloon as House Prices fall

If you agree with Peter Riddell's comments in this morning's Times that the last hope for Gordon Brown is an economic recovery,then perhaps his days are numbered?

Moods matter in politics and the present one is gloomy across the board.

and the mood is not got.

Sometimes the government can be powerless as Joseph Stiglitz points out

We should be clear, however, that monetary policy and these last-minute rescues can only prevent a meltdown of the economy; it can't resuscitate it. As Keynes pointed out, it's like pushing on a string - and even more so in this era of globalisation. With housing prices falling, new liquidity won't make homeowners borrow more - or banks lend more. The money will look for safer and higher returns elsewhere

So the news that house prices are falling again will not help Brown pne bit.Let's be clear,their rise since the mid 90's have covered holes in government policy they have enabled consumers to continue spending based on expanding liquidity in credit markets.Once this has gone then very quickly people will start tightening their belts.

Gordon has tried to calm fears

Gordon Brown has said the UK is well placed to deal with global economic crises, after figures showed a sharp decline in house prices.
The prime minister said a 2.5% fall in March, recorded by the Halifax, should be seen in the context of 10 years of big increases and low interest rates.

But on the other hand as Fraser Nelson points out

Today he offers a £1,500 incentive for certain groups of people to enter a shared equity scheme to buy a house. But today the Halifax shows (Word doc) that the average house price fell by £4,870 last month alone - that's 2.5%, the worst drop since 1992. Who on a low income and in their right mind would buy into such a market? Events are overtaking Brown at a bewildering speed

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