Labour's loss of Glasgow East to the SNP should surely be seen as marking the end of the New Labour project? It is probably too late for the party to save itself before the next election. Even if Brown was replaced, the party has become too homogeneous to give room for another way of thinking to emerge. It will need to be out of office for at least a decade for that to happen. What happens next?

It seems as if the United Kingdom is slowly heading for break-up. This is not inevitable but the pressures are there and the loss to a Scottish National just adds a bit more. But if one looks at the SNP's policies, it is evident that they do next to nothing to address the real economic problems that affect Scotland; they are grounded on the same inadequate economic theories as Labour's are. The same applies to the Conservatives. The only difference is that the the other parties are putting a slightly different spin on what are again, essentially the same economic policies based on the same understandings of how the economy functions.

Henry, what's your take on house price movements through to the end of this year ?

I received a questionaire yesterday from a Brighton estate agent asking what I expected would happen to house prices in the next year.

I do not have a crystal ball but if there was no expection of inflation I would say that prices are 20% too high. The house two doors away from me in a street like the one in the picture is let for £1500 a month which is about £15,000 a year net. Others in the street, which is near the main line station, with frequent trains to London taking under an hour for the journey, are on sale at about £380,000 which is about £10,000 less than what they were at the peak 12 months ago. But there have been no takers yet.

My hunch - it is no more than that - is that inflation will run to 4% in the next 12 months and 7% in the 12 months after that. It might have been higher but the Monetary Policy Committee seems to be able and willing to resist calls to reduce interest rates.

If you work out how much you would need to leave in an account to get that amount in interest, and add on a bit for the expectation of future growth and allow for inflation, the right figure for a house such as those in the picture figure is in the region of £340,000. I think that is where the prices will settle in due course - a drop of just over 10% in money terms. But trading will be at reduced levels while present uncertainties and lack of confidence continue. There is a lot of fear around.

I would also expect the rental market to be fairly stable or possibly buoyant and rentals to rise roughly with inflation, in accordance with the normal pattern.