The centre for economics and business research says despite gloomy lending data for November a full scale recession is still unlikely.
It says the data - which shows a drops in mortgage applications from 131,000 in november 2006 to 83,000 in November 2007 - confirms the view from the housing market and the latest trading data from the stores over Christmas and into January sales that th UK economy is slowing down.
Douglas McWilliams, Chief Executive of the CEBR, says: "The housing market is facing a sharp reverse, though all this will do is take prices back to their levels in 2005 - when they were already qiute high.
"The Knock on effect on consumer spwnding is likely to be tough, with spending growth this year the lowest since the eaarly 1990s."
But he adds: " A recession still seems unliikely, provided the Bank continues to cut interest rates. We now have raised our estimate of the chances of a January cut to 40%/"
Source: Mortgage strategy |
