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House prices 'will plummet
by 10pc over the next year', says banking chief economist
SAM FLEMING
UK
Daily Mail
Tuesday December 4, 2007
The housing market is on the brink of a record slump,
one of the country's leading experts warned.
Morgan Stanley's chief UK economist David Miles warned that prices
will drop 10 per cent next year.
That would be the biggest full-year decline since records began
in 1969.
A drop on that scale could plunge thousands of people into negative
equity and recall the worst days of the recession of the 1990s.
Mr Miles, who has advised Gordon Brown on mortgages, said the
pain would not end there, as prices could continue to fall in
2009.
Such a slump would come as yet another blow to the Prime Minister,
who has founded his claim to office on his record for economic
stability and rising prosperity.
(Article continues below)
The predicted drop will be caused by a combination of five Bank
of England interest rate rises and the turmoil in the banking
system which is leading to sharp increases in the cost of borrowing.
Only last week Bank of England governor Mervyn King warned that
strains in the finances of major banks will force them to reduce
the supply of credit, hammering property values.
Full
article here.
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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