Spirit Report post Posted August 7, 2005 http://politics.guardian.co.uk/economics/s...1544019,00.html Roger Bootle, economic adviser to Deloitte and Touche, has long predicted that rates could be at 3.5 per cent by the middle of 2006, with another reduction before the end of this year. He said that with demand falling away, the Bank could safely continue cutting rates, and allowing the pound to depreciate, without fear of sparking inflation or reigniting the housing market boom.'Reductions in rates will not cause house price inflation to re-accelerate, because excessively high interest rates were not the problem in the first place,' he said. 'The problem is that house prices are too high in relation to earnings. This means that investors face unfavourable prospects for immediate capital gains while first time buyers face difficulty in amassing the necessary deposit. Lower interest rates will make little difference to these two problems.' Quote Share this post Link to post Share on other sites
