October 23, 2007 (LPAC)--The Daily Telegraph's Ambrose Evans-Pritchard writes a report entitled "More Mirage than Miracle," published by the free-market think tank Policy Exchange, which shows the so-called British economic miracle is based on a housing boom that created a false sense of wealth and ever greater debt burden.

"From 2001 to 2006, a total of £256 billion pounds in equity was extracted from UK property values in this way. Dependent as it is on rising house prices, housing equity withdrawal cannot continue to prop up our consumer spending at its current level," said the report. "As a result, the UK savings rate has plummeted from 8.3% of disposable income fifteen years ago to around zero. Personal debt has risen by 137% since June 1993 to £1.343bn, greater that annual GDP for the first time."

Now the Bank of England's leading property expert, Kate Barker, who also sits on the Monetary Policy Committee and is an advisor to Gordan Brown, warned also, that, the so called "buy to let" housing market, where idiots purchased houses just to resell them at a higher price, could be headed for a trouble because of high interest rates and "reduced expectations of price appreciation." This sector accounts for 12% of all mortgage lending.

This being the first time the Bank of England has commented on this sector, is, therefore, guaranteed to set alarm bells off.