In a shocking admission here the government has admitted that they knew the housing market was in a bubble but did not act to correct the market.
Kitty defended the government by stating that the government should not interfere with rate setting. Not for the first time this misses the point. It is classic New Labour blame setting.
In this case she is blaming the BOE for keeping rates low and causing the bubble. As we all know Gordon Brown altered the BOE inflation target to a measure that excluded housing costs, therefore allowing the BOE to keep rates lower for longer
Maybe the government should have questioned the lending practices of many lenders which contributed to the bubble.
They cannot go on passing the blame buck forever.