British house prices were unchanged in January, Halifax reports, but annual growth slowed to a three-year low of 1.9%
Danny Blanchflower, a former Bank of England policy maker, has predicted that “collapsing” house prices will push the UK central bank into a rapid pivot toward interest rate cuts.
Blanchflower, who is now a professor of economics at Dartmouth College, told Bloomberg Radio that economic data will deteriorate as the sharp increase in interest rates hit activity.
“We are seeing house prices tumbling.
You’re going to start to see really bad stuff appearing as these economies slow fast and the central bank and the markets are then going to respond to that.
As I sat at the Bank of England, my job was to think about what inflation was going to be at about 18 months to two years down the road. And you change rates now because it takes time to have an effect.
“What people should see is a collapsing housing market, a slowing economy and the reason is that these interest rate hikes that have been going crazily haven’t actually impacted the economy yet.”
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