Can Gordon fix it?

摘要

The budget deficit may be swelling at an alarming rate, but Gordon Brown can still point to an enviable record of economic stability. Since he became chancellor in 1997, the economy has grown without a break. But this gratifying picture of overall economic stability has been marred by the renewed volatility of the housing market. In the past six years, house prices have boomed. Now the spectre of a possible bust hangs over the economy. In June, Mr Brown identified the housing market as a principal reason why Britain was not ready yet to join the euro. A combination of features makes Britain's property market distinct: a lot of owner-occupiers, a high level of mortgage debt, a history of sharp house-price fluctuations and a system of mortgage finance unusually dominated by short-term, floating-rate loans. All this means that interest rates set by the European Central Bank would have a disproportionate effect on British home-buyers if Britain were to adopt the euro.