Confidence in housing market low despite potential rate cuts


Wed 7th May, 17:27:05 BST

House prices will continue to fall even with experts forecasting that the Bank of England will cut interest rates.

With the credit crunch contributing to slow economic growth, the Bank is expected to reduce rates to four per cent in order to stimulate the economy and encourage consumer confidence.

Financial experts believe that despite potential rate cuts house prices will continue to fall while property analysts believe the housing market will take a decade to recover from the effects of the credit crunch.

However, fears over inflation may rule out a rate cut with the nine members of the Monetary Policy Committee set to decide after a two-day meeting starting today.

Simon Ward from New Star said: "A cut is certainly possible but would be dangerous given current inflationary risks."

If the Bank decides to reduce interest rates it will be the first time in almost seven years it will have implemented successive rate cuts.
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