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On Wednesday the Bank of England's financial policy committee

and what remedial measures

discuss the possibility of a property bubble

can be taken

The Royal Institution of Chartered Surveyors (Rics)

has called on the committee to cap annual house price growth at 5% a year.

Vince Cable, the business secretary, has warned of the risks of "returning to the problems of the last decade when housing got out of control,"

and said the chancellor should consider halting the second phase of his Help to Buy scheme.

The controversial mechanism, which

will allow people to buy homes worth up to £600,000 with a 5% deposit.

The Liberal Democrat president, Tim Farron, also attacked George Osborne's flagship scheme

The Rightmove report said the average asking price reached £245,495 in September, a 4.5% increase on the same month a year earlier.

Prices are rising fastest in greater London, up 8.2% over the past year to £493,748, and the West Midlands, up 6.8% to £195,429.

In London, prices are up in all boroughs except Barking & Dagenham (down 0.8% to £218,242). Prices in Croydon and Tower Hamlets rose by more than 2% in September alone.The most expensive homes are in Kensington and Chelsea, where the average home is priced at £2.16m – a 6.5% increase on last year.

“People are now happier than ever to pay the premium price for the property they want. But now even the ordinary homes, if you want to call them that, are ­inviting extraordinary prices.”

“Sydney’s average appreciation for property has gone up by 14 per cent in the last 15 months. That’s enormous and if it continues, there’s room for worry,” he said. “But at the moment the market just appears excited.”Yellow Brick Road founder Mark Bouris was cautious not to hype the property price hikes.“You’d have to be careful in the investor market ­because when aggregate ­demand is so high you have to start considering that their pricing is potentially above where it should be,” he said.

Last month, a three-bedroom apartment in Kirribilli sold for $4.325 million, shattering the $3 million reserve.

This is the highest rate forecast among advanced economies, although the IMF has trimmed global forecasts amid fears over a “weak and uneven” recovery in Europe and parts of Asia.

The body, led by Christine Lagarde, said the “US and the UK in particular are leaving the financial crisis behind”

The Bank of England has identified the housing market as a “blinking warning light” on the economy’s dashboard following the introduction of the Help to Buy scheme last year

In June it introduced limits on high loan-to-income home loans to prevent borrowers over-extending themselves, while tighter mortgage lending criteria are slowing runaway prices.

The Bank’s latest credit conditions survey found a “significant” fall in the availability of home loans in the past three months after eight successive quarters of expansion.

The IMF also warned that more measures such as tax incentives and freeing up land were necessary to improve the rate of housebuilding and keep a lid on runaway house prices.

“Supply-side measures are crucial to safeguard housing affordability and mitigate financial stability risks,” it added.

Household debt levels remain high at 140% of GDP and, if the Bank’s limits on the lending market fail to gain traction, it may be forced to raise interest rates instead

Surprisingly, a carbon tax would operate much like a diamond tax, for reasons both of demand and supply.

Demand: The wealthy actually consume a disproportionate amount of carbon. Discussions of a carbon tax usually focus on the price of gasoline. One gallon of gas produces about 17 pounds of CO2. One metric ton is 2,204 pounds. So a $100 tax on a ton of CO2 comes to $0.77 per gallon -- a significant cost to low-income commuters and small truckers.

But the very poor don't drive or travel or occupy much space; the rich fly planes, including private jets; drive to low-density suburbs; occupy and heat multiple houses and hotels; and buy lots of stuff. Clearly the rich consume much more carbon per capita than the poor.

Demand elasticity for oil is low, about 0.5; so a 1 percent increase in oil price would cause a 0.5 percent decrease in consumption. That makes sense, since in the short run, it's hard for people to cut energy consumption, especially if they must drive to work. But, though numbers are hard to come by, elasticity of supply is much, much lower, for two reasons. First, oil production takes decades and billions in capital investment; producers cannot quickly increase or decrease supply. Second, oil producers form an international cartel, an organized mega-monopoly, which holds down production to drive up prices. Since they're already charging what the traffic will bear, they can't much raise prices to cover a tax.

As economists long ago figured out, buyers and sellers share a tax in inverse proportion to elasticity. Therefore, if supply elasticity of carbon is, say, 0.1, while demand elasticity is 0.5, the suppliers will pay five times as much of the tax as consumers. That reduces that $0.77 per gallon gas tax to only $0.13. Moreover, precisely because most of the tax falls on suppliers, it will generate plenty of revenue to help those unfortunate long-distance commuters and small truckers, to build more public transportation, to invest in renewable energy, and even to cut super-regressive taxes like the payroll tax.

According to Edward Wolff, in 2007, the top 1 percent in the U.S. owned 43 percent of non-home wealth, mostly securities, including of course energy company stocks and bonds. The top 10 percent of wealth holders owned 83 percent.

A May 2013 federal study of the Social Cost of Carbon estimated costs of additional CO2 emissions for 2010 to 2050 ranging from $27 to $221 per metric ton in 2050, depending on assumptions.

So we have good news and bad news. Good news: The cost of reducing carbon emissions will fall hardest on the 1 percent, who consume the most energy and own the energy companies. Bad news: Ditto. Expect a fight!