Housing shortage poses threat to strong GDP growth
24 July 2023
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In the Media
Housing and Planning
Housing and Planning
Julian Jessop quoted in the Telegraph
IEA Economics Fellow Julian Jessop has been quoted by the Telegraph on how the slowdown in UK housebuilding will hurt the economy.
The Telegraph wrote:
“Julian Jessop, a fellow at the Institute for Economic Affairs, said that the OBR had already been ‘quite bearish’ on the housing market and house building in the spring, predicting that the ‘residential investment’ component of GDP would fall by more than 7 per cent this year.
“He pointed out that only 37,750 house builds were started in England in the first quarter of 2023, which was 15 per cent lower than the quarterly average for 2022. While new housing work is only about 2 per cent of total GDP, Mr Jessop said that when predicted growth is ‘close to zero, an additional 10 per cent fall in housebuilding, knocking 0.2 per cent off GDP, could make the difference between expansion and recession.’
“‘And that’s without taking account of the knock-on effects on the wider economy, from lower tax revenues to reduced mobility of labour,’ he added.”
You can read the full article here.
The Telegraph wrote:
“Julian Jessop, a fellow at the Institute for Economic Affairs, said that the OBR had already been ‘quite bearish’ on the housing market and house building in the spring, predicting that the ‘residential investment’ component of GDP would fall by more than 7 per cent this year.
“He pointed out that only 37,750 house builds were started in England in the first quarter of 2023, which was 15 per cent lower than the quarterly average for 2022. While new housing work is only about 2 per cent of total GDP, Mr Jessop said that when predicted growth is ‘close to zero, an additional 10 per cent fall in housebuilding, knocking 0.2 per cent off GDP, could make the difference between expansion and recession.’
“‘And that’s without taking account of the knock-on effects on the wider economy, from lower tax revenues to reduced mobility of labour,’ he added.”
You can read the full article here.
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