Housing market set to boom this summer
Monday 03 May 1999
The latest report from the Ernst & Young ITEM Club, the only independent forecasting group to use the Treasury's economic model, forecasts an 8.5 per cent increase in house prices this year.
Housing turnover is set to rise modestly, and the ITEM club warns that Gordon Brown may have to take steps to dampen activity if a 1980s-style boom-and-bust is to be avoided.
With mortgage interest tax relief due to be abolished next year and interest rates determined by the Bank of England, the Chancellor could be forced to increase stamp duty or council tax to slow the housing market.
Peter Spencer, ITEM economic adviser, said: "It's a nationwide expansion. If you go back to the reasons why the housing market has been held back - high interest rates, job insecurity, worries about a market crash - these factors are now being reversed."
According to ITEM, the buoyant property market and the recent bounce- back in retail spending should ensure the economy steers clear of recession this year.
The economy is predicted to grow by just over 0.5 per cent in 1999 - significantly less than the government's official forecast of 1 to 1.5 per cent growth - and by 1.5 per cent in 2000. Post 2000, the economy should pick-up rapidly, ITEM says, with growth rates of 3.3 per cent in 2001 and 3.5 per cent in 2002.
The ITEM study holds little good news for industry. Manufacturers are forecast to face another painful 12 months amid rising raw material prices and slow economic growth throughout much of mainland Europe.
However, a surging services economy means the Monetary Policy Committee is likely to hold fire on rates throughout much of the summer.
Merrill Lynch's "Survey of surveys", also out yesterday, highlights the continued recovery in UK business confidence and the benign outlook for inflation.
Diving in at the deep end is no excuse for shirking the style stakes
- 2 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
- 3 Why I'm on the brink of burning my Israeli passport
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Gaza-Israel conflict: The terrible price Palestinian children are paying for Israel’s war with Hamas
Rotten egg smell could help battle heart disease and Alzheimer's
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...