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UK GUARDIAN: WHO SAYS INFLATION MAKES PEOPLE RICHER

UK GUARDIAN: WHO SAYS INFLATION MAKES PEOPLE RICHER

Interesting article on England's continuing housing crisis.

www.guardian.co.uk/commentisfree/2010/ja...


An Englishman's home is his castle, if he can get one
Our housing situation, both private and public, is a shambles. Homes must be built, and prices slashed

Rafael Behr
The Observer,     Sunday 3 January 2010
As is typical of a boom, much of the decade just passed will be remembered for fashionable delusions: the artistic credibility of Damien Hirst; the idea that Land Rovers are suitable for cities; skinny jeans; the assumption that rising house prices indicate rising prosperity. That last belief was exceptionally silly. Since when did inflation make people richer? But soaring house prices didn't count as inflation. Literally. They were excluded from the measure that the newly independent Bank of England was supposed to watch when setting interest rates after 1997.

Over the next 10 years, the average cost of a house for a first-time buyer rose by 200 per cent.

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Of course we KNOW that average income in England DID NOT rise 200% over the ten years, 1997-2007.