Electionomics - could future housing woes prompt an early poll?

No straight answer from anybody in BoMo, including the political cognoscenti, as to the timing of an election. Only the PM knows his own mind on this. But I do wonder whether a large part of the calculation will be conditioned on a delicate analysis of economic risks.

On C4 News we've regularly pointed out how the Treasury tendency, now running Number 10 sees the world through the lens of economics. The electionomics would surely push for a poll earlier rather than later. Yes there's been the Northern Rock crisis, but thanks to tomorrow's Bank of England £10bn injection (in return for Bank mortgage assets, some of which is in arrears), we should get at least a couple of months of relative stability. Its a known known, as Donald Rumsfeld might say.

The housing market more generally is a known unknown. The relentless growth in house prices that formed the backdrop of Tony Blair's electoral success. Over the past decade, the great majority of the swingvoting electorate have got used to their home quadrupling up as a pension, a surrogate paypacket, and general source of the feelgood wealth effect. But thanks to the run on the Rock and the credit crunch more generally, the long range forecast is as awful as it has been for some time. It wouldn't even take a crash, perhaps just a widespread change to the perception that the housing market only goes up, for the electoral mood music to change.

Mortgage lenders are talking of a 'mortgage famine' - a tightening of credit conditions, a rationing of funding for house purchases. This coupled with a rapid reduction of city bonuses augur badly for the ability of next year's generation of homebuyers to be able to afford price rises. Falls in some city centre buy-to-lets have already started.

So here's the point - is it not far easier to go to the country before the housing market starts to bite? On this score at least, Mr Brown may see a small window of opportunity in the next couple of months.

Channel 4 musings

Hello, I'm Faisal Islam, economics correspondent of Channel 4 News.

This is my weblog, and expect regular snippets on economics, business and a sprinkling of politics here.

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