Be in no doubt, there is one overriding reason why food has shot up so high in price.  It’s down to food subsidies.    And perhaps even more seriously, biofuel subsidies. 
These subsidies are hugely damaging in so many ways.    The cost to the taxpayer is astronomical, they distort markets, but most seriously of all they put more-efficient […]

Gordon Brown and Alistair Darling need to remember to kiss more. No, not that type of kiss, this one: Keep It Simple, Stupid.

Yesterday, Alistair Darling did get the kiss in. By upping personal allowances by £600, and by reducing the threshold for paying 40 per cent tax, in one foul swoop he solved the problem. Well, not entirely solved, some will still be worse off, but at least it’s getting better.

It really is simple to explain.

You can’t lean against the wind – at least that’s been the wisdom in financial circles.

Famously Alan Greenspan once described the dotcom boom as irrational exuberance and he tried to talk shares down. Then he appeared to have a road to Damascus moment, and decided that central banks could not possibly second guess markets. So, he chose instead to sit it out.

And he continued to sit it out when house prices shot up in the US.

It was a policy Ben Bernanke agreed with and has long maintained that central banks can not be expected to monitor asset prices.

But of late

The wonders of modern technology, eh? Thanks to a 10 mega pixel camera we now know what the Government really thinks.

Housing Minister Caroline Flint got caught out. There she was off to Number Ten, with a wedge of papers in her hand, and some bright spark chose to take a picture with a powerful high res camera. And the words were revealed “Given present trends, they [house prices] will clearly show sizeable falls in prices later this year – at best down 5-10 per cent year-on-year.”

They went on: “House building is also stalling. New starts are already down 10% compared to a year ago. Housebuilders are predicting further falls. Having seen net additions reach roughly 200,000 in each of the last two years, the figure for 2008-09 is almost certain to be well down on that.”

Well the notes are not wrong. What is a little odd is that the Government has resolutely denied a big fall in house prices is under way.

Actually, a 10 per cent fall this year is beginning to look optimistic. Latest figures from the Council of Mortgage