GB: Crash in house prices"unlikely" - trotz steigender Zinsen (Brown statement)

verfasst von dottore, 26.04.2004, 10:29

-->Chancellor acts to quell house price fears

By Edmund Conway (Filed: 26/04/2004)

Gordon Brown this weekend sought to reassure homeowners that the chances of a crash in house prices were slim, despite the likelihood that interest rates will rise further.

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The International Monetary Fund's financial committee, chaired by Mr Brown, warned in its concluding statement this weekend that rising interest rates pose one of the greatest threats to the global economy.

It said the US economy was"expanding briskly", along with Japan's, but added that performance in the eurozone was"so far more subdued". Gaping current account imbalances - the most notable of which is in the US economy - posed a risk, as did"the eventual transition to a higher interest rate environment".

The Bank of England is expected to raise rates to 4.25pc next week and, in a newspaper interview this weekend, one of the MPC members, Paul Tucker, said he thought the cost of borrowing could peak at 5.5pc.

"I think it might be in the range 5pc to 5.5pc, although it could be a bit lower," he said, when asked where he thought the current cycle's peak would be."But that has to be heavily qualified. I don't think one can have a precise number that is right in all circumstances."

The Ernst & Young Item Club will today publish a report predicting that rates will have to rise to"significantly above 5pc" next year. The MPC has warned that if rates do rise as much as markets expect, levels of personal debt to income"would reach levels last seen in the early 1990s within two or three years".

The MPC and a number of City economists fear that this could set off a house price crash and lead to a severe downturn for the consumer sector. After the IMF meeting concluded on Saturday, the Chancellor made a rare statement about the prospects for property prices.

He said:"House prices have certainly risen, as everybody knows. What is also the case is that people's debt servicing payments - mortgage payments as a share of their income - are still far lower than they were 10 years ago." The IMF's report on the world economy last week said the biggest risk facing the UK economy was a"sharp correction" in house prices.

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gesamter Thread:

• GB: Crash in house prices"unlikely" - trotz steigender Zinsen (Brown statement) - dottore, 26.04.2004, 10:29
  • Glaube eine Geschichte erst, wenn sie offiziell dementiert wird... - Tofir, 26.04.2004, 10:48
  • Wait and see -BIS on Household Debt - Popeye, 26.04.2004, 11:30
    • Re: Wait and see -BIS on Household Debt - dottore, 26.04.2004, 13:01
      • Die UBS zum Thema Inflation - chiron, 26.04.2004, 14:31
        • Nix verstehn... - chiron, 26.04.2004, 14:49
          • Re: Nix verstehn... - CRASH_GURU, 26.04.2004, 18:06
            • Re: Das ist ja einmalig! Woher hast Du die Info? Danke! - Per_Jakobsson, 26.04.2004, 20:59