Agree to disagree

Do what you will, this world’s a fiction and is made up of contradiction

One of the problems with this whole downturn thingy is that there seems to be so much information flying about, information and statistics and figures, all of whom contradict each other.

Mortgage approvals are up, apparently, in February compared with January. That’s what the Council for Mortgage Lenders is saying, and they should know I suppose. But then, January isn’t exactly the prime month for house-hunting anyway. So wouldn’t we expect a rise then anyway?

The issue of house prices has also been contradictory. Nationwide and Halifax – the main providers of such information – have both been full of talk of the slide only for Halifax to report an actual rise in prices in January. Come the February figures though, and they’re back to announcing a fall again.

However, the most recent incidence of disagreements appeared in my inbox this morning. Yesterday, I found a news release from the Centre for Economics and Business Research (CEBR) which quite categorically says that the government’s much-criticised cut in VAT is working and has led to a big boost in consumer spending. The CEBR reckon that £2.1bn of extra retail sales can be directly attributed to Chancellor Darling’s generosity.

“Poppycock” (or something similar) say Verdict Research who are quite adamant that any rise in spending has very little to do with the VAT rate cut. In fact, they say that the CEBR research contains “several fundamental errors” and that “some of the points made are simply inaccurate”.

Far more likely is the fact that any recent rise in retail sales is down to huge discounts and that were everywhere in the run-up to Christmas and which continued long after the normal January sales period might be expected to have ended. We’ve now got Easter specials, mid-season sales and, of course, the odd closing down sale.

Where there does appear to be some agreement and good news is about the housing market. Estate agents are reporting that they are getting busier and busier with viewings and that those houses that are selling are doing so a tad more quickly than they had been.

What does all this mean for this industry? Well, something and nothing. It means that we have to be careful which of the reports about the downturn and recovery we believe, for starters. And it also means that there is no quick-fix solution. The speed and scale of the recession might have taken most people by surprise (including those who really should have seen it coming) but it had been a long time coming.

It means that if property transactions do pick up, there should in theory be a little more RMI work flowing around. It means that if the campaign to cut the VAT rate on R&M work is successful it will need to be well publicised to ensure that householders are aware of it and feel confident enough to take advantage.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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