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
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor