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"?
Lammily: Barbie-like doll hits Kickstarter fundraising target in a day
Belle Knox: How the porn star student from Duke University became bigger than Justin Bieber
Top 10 most expensive cities in the world: Singapore named costliest place to live – but what about London?
Oscar Pistorius trial: Neighbour feared athlete would use gun that killed his girlfriend Reeva Steenkamp to shoot himself
Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
- 4 Man stabbed with Legend of Zelda Master Sword in serious condition
- 5 Study suggests that 'gaydars' are real - at least for women
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...