The waiter’s arrived with the bill, again.

I'm writing this off line as the hotel we are staying doesn't have broadband access for the guests, which is fine because it is meant to be a break from everyday life. (I'm writing this as the Great Wiseone is still asleep). SO that means no references and I will be too busy to dig them out when I get back.

In Friday's Telegraph Jeff Randall makes the point that for the past few years much of the apparent prosperity (in Essex but that goes for everywhere) was underpinned by cheap money. He fears, quite rightly IMHO, that this is going to cost people more than they have in their budgets because the true price of debt is simply deferred – in effect pay less then, pay more now. As he says "pop goes the weasel".

This is then underpinned by the headline story in the main front page story which highlights the effect of expensive mortgages which mean that those with fixed rate mortgages coming to an end, around 1.4m people this year (is that1.4m people or 1.4m mortgages? it isn't quite clear) and they face a rise of £206 per month on a typical £150k mortgage. Then on Saturday on the front page we are told that "soaring bills leave families with just £50 per week" after they have paid essential household bills.

It looks like history is repeating itself and I am reminded me of a comment in the early 80's – in the 70's we all thought there was such a thing as a free lunch, in the 80's the waiter arrived with the bill. This time in the 90's and early 2000's many thought that there was a free lunch, last year the waiter arrived with the bill in the form a credit crunch, and it is starting to look like many had a very expensive dinner which the rest of us will be paying for over the next few years.

All this going on when we had a chancellor who was supposed to be the "Golden Chancellor", one who understood the subject and was a student of economic history. Let's hope the good people of Crewe pass a very swift and telling comment on him.

PS Mark Wadsworth has a good post on this subject "Housing crisis: Mortgage rates at 8-year high" in which I comment that I don't feel sorry for people who used equity release to fund expensive lifestyles i.e. cars and holidays.