Housing market points to recession
British financial experts warn of a more than 10 percent decline in residential property values amid the faltering credit market and recessionary speculation.
Forecasts for average home prices in England dipped below $360,000, down from early 2007 forecasts of nearly $400,000.
The lower forecast came despite a quarter-point interest rate cut from the Bank of England, the Independent reported Sunday.
Analysts said the overall outlook for the market continued to be bearish as housing prices declined at their fastest rate since mid-2005.
The faltering economic outlook may pressure the Bank of England to offer further rate cuts in the beginning of 2008, the newspaper said.
Some analysts predict the wider economy will suffer from the declining credit market, high oil prices and decreases in consumer spending.
"There is every possibility that the housing market... will deliver a shock to consumer confidence and spending. In this situation, it is likely we will flirt with recession," said one analyst. // Copyright 2007 by United Press International
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