A month ago, the Bank of England's Cunliffe dismissed UK realtors' fears of a central bank-driven bubble in housing [4], by stating confidently that "it is not a boom or a bubble. It is a market correction, albeit a fairly quick one." [5] But now, the man really in charge of the liquidity pedal, the BoE head Mark Carney has proclaimed:
- BOE'S CARNEY SAYS CONCERNED ABOUT POTENTIAL DEVELOPMENTS IN UK HOUSING MARKET
- BOE'S CARNEY: WANTS TO AVOID HOUSING MARKET MOVING TO 'WARP SPEED'
In the speech at the New York Economic Club, Carney went on note that this BoE-created bubble could be popped by raising capital requirements against the housing sector if need be; but we suspect the faster way to pop the momentum-chasing hot-money frenzy will be to pass the foreign homebuyers' capital gains tax [6].
So, it would appear, that unlike his brethren in the US, Carney is able to see bubbles - and it seems is capable and ready to react to them...