Home truths

Will Hutton’s remark about falling house prices and their “resulting downward pressure on consumer spending and growth” (Comment, 5 December) is a good example of the fallacy that house-price inflation is somehow good for the economy. This fails to pick up on the evidence that young households, whose purchases of furniture, white goods, toys and children’s clothing should support local industries, are saddled with such huge mortgages or rents that the net beneficiaries are older people, who lack a broad enough range of spending needs to make up for the purchases foregone by the younger group.

To maintain this imbalance in spending, we have to go without Keynesian low interest rates because they would go straight into housing inflation, which the Economist sees as a global problem awaiting a 1929-style bust.

David Reed
Labour Land Campaign