Directors who got it wrong

Just now, housing associations are complaining bitterly about next year’s £100 million rent reductions. The cuts, they say, will lead to fewer new homes, less stock investment and cuts in housing services.

But it’s the not the coming rent reductions that are the real cause of housing association discomfort. Rather, it’s their failure to hedge against the risk of deflation and falling rents by adopting flawed Treasury management policies throughout the past 20 years or so.

Far too little attention has been paid over the years to deciding which is worse: inflation or deflation.