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23 Oct 07 - Housing Market 'To Avoid Recession'
The UK housing market has suffered from the recent credit crunch, but will
not be hit by a major recession, a report claims.
The Ernst & Young Item Club forecast shows that price growth may grind to a
halt in 2008, but housing will remain resilient thanks to
a strong labour market and hopes of lower interest rates.
But the group's economists believe the UK economy will slow
dramatically next year due to the tightening in credit conditions,
and have cut their predictions for growth from 2.5% to 2.1%.
The report on the housing market comes despite an International
Monetary Fund warning last week that prices may be in line
for a sharp fall. Peter Spencer, chief economic adviser
to the Item Club, said: "Activity is likely to fall and
prices may stall through 2008. But as interest rates come
down and new supply remains restricted, the foundations
will be laid for renewed real price growth in the long-run"
Source: Ernst & Young
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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