James Moore: It's not just the weather that's making homebuyers batten down the hatches

Outlook. Plus: Hiscox quits with a storming success; Pearson boss vows to stick with the FT

It snowed a bit in January, which was bound to have an impact on the housing market. A lot of people will have understandably put off their viewings, offers and mortgage applications. But that isn't the only reason behind yesterday's poor figures from the British Bankers' Association on mortgage approvals.

The market is in a very bad place because confidence remains desperately low, even with the Bank of England spraying cheap money around and at least two banks (Barclays and HSBC) seeming to be quite keen to lend as a result.

Faced with declining real incomes, rising taxes, and a general feeling of a country mired in economic malaise, homebuyers aren't biting. Instead, they are battening down the hatches and putting off big decisions, such as buying a new house, for the long term, not just the time it takes for the snow to melt.

That's not good for the economy, which apparently took another knock yesterday from Moody's, the credit ratings agency and an organisation which enjoys almost zero credibility with anyone with an ounce of sense.

It does, apparently, have credibility with both the Chancellor, George Osborne, and Ed Balls, his shadow, however.

Mr Osborne made great play of the AAA credit rating which Britain used to have from Moody's in formulating his economic policy. And Mr Balls made great play of the downgrade's impact and Moody's apparent humiliation of the Chancellor.

So they shouted at each other, debating the decision of an anonymous pen pusher in Canary Wharf and virtually ignoring the plight of our prospective home buyers, whose situation ought to worry them. And the plight of their friends and families who already have homes and mortgages. Their situation is really scary.

In far too many cases, even a modest rise in interest rates will do more than hit the disposable incomes of these people. It will obliterate them, and then call into question their ability to repay their home loans. All of a sudden we might find out just how effective the regulators' measures to strengthen the banks have been.

Mark Carney's £600,000 hot seat as the Bank of England's new Governor might be at boiling point when he sits down for his first meeting. No wonder he's been hinting at the abandonment of Britain's inflation target.

With no room for fiscal stimulus under this Chancellor, he'll be under pressure to produce another round of monetary stimulus. That will put the pound under far more pressure than Moody's erasing Britain's As.

Devalue, though, and you do at least inflate debts away. But it's a dangerous game to play. More dangerous than Mr Balls' prescription of borrowing even more until growth returns (if it returns)? We might be about to find out.

Hiscox quits with a storming success

Superstorm Sandy? A drop in the ocean for Hiscox, the Lloyd's of London insurer which has quietly become a City success story.

A lot of that is down to its incorrigible chairman, Robert Hiscox, who is signing off with something rather better than the traditional gold watch in the form of a £200m return of capital to shareholders. As a major investor he will be a big beneficiary, and a more than comfortable retirement beckons.

Mr Hiscox has been one of the more colourful and entertaining characters in what is, generally, a rather dull industry. There's something of the old City about him. But there's nothing old-fashioned about the way he has run the board at Hiscox and the people he has brought in. He has always had a good eye for those who understand how to underwrite insurance profitably, as yesterday's results showed.

Despite the storm, Hiscox made £14.50 on every £100 of premium taken in before any return on investing those premiums is taken into consideration.

So should we all cheer him off? Well, up to a point. There is a sting in the tail, you see. Like so many "British" success stories, Hiscox isn't quite as British as it once was. In common with most of London's insurance industry the company is now incorporated and headquartered in the sunny and virtually tax-free haven of Bermuda. So it's Bermuda's residents that should really be cheering Hiscox's success.

Pearson boss vows to stick with the FT

The City wasn't much impressed with John Fallon's plan for what ails Pearson, the world's largest educational publisher and the owner of the FT, at least if the performance of the shares is anything to go by.

The company is faced with significant challenges, not least declining education spending in its key North American market, and the continuing impact of the internet on its business.

Mr Fallon's plan for dealing with this conundrum hardly smacks of original thinking: he's going to slash costs. A target of £100m or so annually has been set. The money saved will be invested in refining Pearson's digital offering, particularly in faster-growing "emerging" markets.

Things should be just peachy by, erm, 2015.

Mr Fallon was dealt a poor hand when he stepped up to replace Dame Marjorie Scardino, who timed her departure to perfection. If he wanted to really put his stamp on the business and do something radical he could have looked at options for the pink paper, sorry, the pink web pages. It really doesn't sit all that well alongside an educational publishing business, and has serious challenges of its own to deal with when it comes to the digital revolution.

But unlike, say, Pearson's 50 per cent stake in FTSE International, he remains adamant that the FT is going nowhere. Did someone say "trophy asset"?

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most