The outlook for both the UK housing market and high street trading are “bleak”, an influential panel of economists have warned.
Ernst & Young’s ITEM club said conditions in the retail and housing markets were set to get a “whole lot worse” as the international banking crisis started to bite on the wider economy.
The group has predicted house prices will fall by 10%, with the numbers of people moving home falling by 40% over the next two years. Their forecasts have been made despite the three interest rate cuts made during the past five months.
ITEM chief economic adviser Peter Spencer said: “Although the UK economy has remained relatively buoyant so far this year, our reliance upon international banking markets means it is only a matter of time before it slows.
“This is going to be a rapid, painful adjustment…
