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Green Shoots May Be Trampled On As House Prices Fall

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Green shoots may be trampled on as house prices fall

The UK's initial green shots could fail to prove to be a false dawn, a former member of the bank of England's monetary policy committee (MPC) has warned.

Writing in the Guardian, David Blanchflower, who stepped down from the MPC this month, stated house prices will still fall and the economy is far from out of the woods.

He wrote: "There are some small signs of green shoots but they can be easily killed off.

"There has been some positive evidence from the housing market, but house prices still have a long way to fall."

The economist pointed out during the house price falls of the early 1990w, in almost one month in three house prices increased.

He added unemployment is set to rise by an average of 100,000 a month for at least a year.

Mr Blanchflower, who is based in the US, added the MPC ignored his warning of a recession and that interest rates had to fall.

"I was pretty sure the UK was headed into deep recession by spring 2008 and convinced of it by the summer, but still nobody was listening," he wrote in the Guardian.

"Eventually, the MPC started to cut rates, and fast."

Interest rates are now at a record low of 0.5 per cent and the MPC has started creating funds through the process of quantitative easing in a bid to hold off deflation and aid the economy.

Mr Blanchflower hit out at the MPC for being behind the movements in the economy in recent years – holding interest rates too high for too long as house prices started to fall in 2007.

He concluded: "The hope is that the mistakes that were made by the MPC on the downside will not be repeated on the upside."

I am sure the usual rampers will disagree, but who's going to take the economic advice of some anonymous internet poster over a respected and revered economist?

I say we are in for a decade of tough love.

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...who's going to take the economic advice of some anonymous internet poster over a respected and revered economist?

I sincerely hope you're being sarcastic, considering the record of the anonymous internet posters here compared to the respected and revered economists in predicting the events of 2007.

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Guest theboltonfury
Green shoots may be trampled on as house prices fall

I am sure the usual rampers will disagree, but who's going to take the economic advice of some anonymous internet poster over a respected and revered economist?

I say we are in for a decade of tough love.

Haven't we spent 2 years on here saying that Blanchflower is a muppet? He can't be declared an oracle now

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Respected and revered economists have been saying different things for the last 10 years. Which one do I believe?

http://www.housepricecrash.co.uk/indices-h...ax-national.php

why have you supplied a link to some charts?

i don't know of any respected commentator [other than those affiliated to estate agents and so on] who doesn't believe that house prices will fall further. can you find an example of one who does?

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