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
ebooksNow available in paperback
Life and Style
The 67P/CG comet as seen from the Philae lander
scienceThe most important scientific breakthroughs of 2014
Arts and Entertainment
Ian McKellen as Gandalf in The Hobbit: The Battle Of The Five Armies
Arts and Entertainment
Sarah Koenig, creator of popular podcast Serial, which is to be broadcast by the BBC
tvReview: The secret to the programme's success is that it allows its audience to play detective
Ruby Wax has previously written about her mental health problems in her book Sane New World
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas