Sir Keir Starmer has warned of possible “shocks” to house prices across the UK following sharp rises in mortgage rates.
The Labor leader said today AM City there is no “market confidence” in the government and that “we are going to see these shocks in mortgages and housing as a direct result of it”.
Starmer today met with a range of business leaders and mortgage brokers in the Midlands to discuss the reaction to Chancellor Kwasi Kwarteng’s mini-budget tabled two weeks ago.
Mortgage rates have soared after government bond yields soared post-budget, raising fears the UK could experience a housing market slump after years of rapid price growth.
Savills has said a recession could easily wipe out the estimated 13 percent growth over the past two years in the London property market.
Asked if he was worried about a possible housing collapse, Starmer said: “I can see more impacts on this unless the government changes course.
“The broadest thing is trust, because we talk about the reaction of the market as something abstract, it is not. It’s the people who spend huge amounts of money who don’t trust what the government did in that kamikaze mini-budget.”
It comes as Kwarteng met with banking and building society executives today to discuss how to stabilize mortgage rates, which have now averaged 6 percent, a 14-year high.
The Treasury said the chancellor will “work closely” with the industry on mortgage rates.
A series of polls over the past week and a half have shown Labor leading the Conservatives by between 25 and 33 points, which would give Starmer’s party an overwhelming victory in an election.
Prime Minister Liz Truss used her Tory party conference speech yesterday to say that Labor is part of an “anti-growth coalition” that opposes her tax cuts, along with “the Lib Dems, the SNP, the militant unions. [and] vested interests disguised as think tanks”.
Starmer said that the real anti-growth coalition was Truss and the Conservative Party.
“The prime minister two weeks ago took the economy like a car and crashed it into a wall, which is as anti-growth as it gets, it’s a growth destroyer,” he said.
“Even having the nerve to talk about an anti-growth coalition is enough. She has been at the helm of the Low or No Growth Coalition for 12 years.”
Labor has said it would roll back most of the government’s mini-budget, which includes canceling a corporate tax hike and a series of supply-side reforms.
Starmer indicated that he would also favor reinstating the bankers’ bonus cap if Labor wins the next election.
“We would take care of the bankers’ bonuses,” he said.
“In a sense, that’s symbolic of Liz Truss’s approach. In response to the workers’ question ‘how will you pay my bills this winter?’, she says I will uncap bankers’ bonuses. So we’ll deal with that.”
Kwarteng will outline a medium-term fiscal plan next month, which is expected to outline how the government will bring the budget back into surplus.
There has been widespread speculation that the government will consider breaking an earlier promise to raise benefits in line with inflation in a bid to cut future spending.
A number of Conservative MPs, including two cabinet members, have spoken out against this prospect and there have been rumors that Starmer has spoken to senior members of Truss’s backbench about a parliamentary rebellion.
Starmer said he “would work with anyone who is prepared to ensure that those most in need do not suffer the consequences of the budget kamikaze.”
“If I were to reveal to you all the discussions taking place in parliament, most of them would not be successful, but I think it is an open secret that many members of the Conservative Party do not agree with this course of action,” he said. he said she.
“Because they know it’s desperately unfair.”