13
Feb
House prices 'could fall'
UK house prices are likely to fall in 2008, as overall spending
decreases, the governor of the Bank of England Mervyn King has
said.
During the press conference to announce the latest inflation
report, Mr King noted that the rates of people's savings will have
to increase as the British economy slows down, reports
Forbes.
And the official claimed that he is not surprised mortgage lenders
have dropped their rates to the same extent that the bank has
because rates were not increased when the base rate went up.
He also argued that affordability could be improved for homeowners
in the coming months, despite the fact that prices will
stabilise.
In its report, the bank claimed that further cuts to the interest
rate may not be possible because inflation could be about to
rise.
Mr King remarked that this may lead to a "tough balancing act" on
behalf of the bank.