Liquidity and other environmental problems

The Bank of England's interest rate hikes appear to be draining liquidity from the UK housing market. From Reuters:

House price inflation in England and Wales eased to 10.3 percent in July from 13.2 percent last month, property Web site Rightmove said on Monday.

The figures suggest the housing market is starting to come off the boil following five interest rate hikes since last August.

However, Britain is facing another form of excess liquidity at the moment: flooding.

Another country experiencing house price inflation is China. From Xinhua Online:

The housing prices in 70 large-and medium-sized cities in China continued to rise in June, up 7.1 percent over the same period last year.

Last month, the prices of newly-built commercial housing units were up 7.4 percent year-on-year, according to figures released Monday by the National Development and Reform Commission in cooperation with the National Bureau of Statistics (NBS).

Incidentally, China is also facing flooding problems.

For the longer term, though, China needs to address wider environmental issues. From AFP/CNA:

Local governments in China are continuing to invest in dirty, resource-intense industries, jeopardising Beijing's goals of saving energy and cutting pollution, state media reported Monday.

Some regions are encouraging steel, cement and other heavy industries to boost economic growth despite demands from Beijing to rein in those sectors, the China Daily newspaper said, quoting a top development official...

In another setback, the Beijing News said the introduction of a formula that would hold local officials responsible for environmental damage had been "indefinitely postponed."