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Double-Dip Recession 'more Likely' As Uk Faces Two Years Of House Price Pain

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I don't know how many more bearish articles I can take!*

http://www.telegraph.co.uk/finance/economics/houseprices/8002827/Double-dip-recession-more-likely-as-UK-faces-two-years-of-house-price-pain.html

A combination of the Coalition's planned austerity measures, muted private sector demand, and credit constraint contributed to the gloomy assessment of the UK's prospects by Mr Woodford, Invesco Perpetual's head of investment.
"I think the chances that we will see [a double dip] in the UK next year have increased and, to some extent, the outcome will be dictated by the pace and scale of fiscal consolidation in the UK," he said in an Invesco webcast.
 
Mr Woodford said he had been surprised at how well house prices had held up, but added that weaknesses were beginning to emerge as more properties come onto the market.
"I think, in an era where mortgage availability remains very tight and there is more supply on the market as a result of unemployment, changing job circumstances or people really wanting to cash in on what appears to be relatively high prices, these put downward pressure on the market, and I expect house prices to continue to fall.
"I do not think that they are going to fall out of bed or that there is going to be a crash, but I do think that house prices will decline this year and next year, and maybe even beyond that." He said that falls in the region of 5pc to 10pc per year over the next two years were possible.
UK house prices rose in 2009 but have fallen in four out of eight months since the beginning of the year according to the Halifax measure. Most recently it reported that house prices rose by 0.2pc in August.
Mr Woodford said that inflation was not a problem for the UK, despite being persistently above target over recent months, because temporary factors like VAT increases would "wash through the system" to reveal an underlying lack of pricing pressure in the economy. He said interest rates would remain low for "a very long period of time".
He argued that parts of the economy reliant on discretionary consumer spending may find life difficult amid falling house prices, subdued wage growth, and rising unemployment.
He added however that there were many industries, including pharmaceuticals and tobacco, that were partly insulated and would continue to be able to increase revenues, profits, cash and dividends. Mr Woodford said "we are maybe halfway through the process of bank-crisis resolution".

* Lots! :lol:

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Nice to see a bit of bear food for brekkie again. :)

Mr Woodford said that inflation was not a problem for the UK, despite being persistently above target over recent months, because temporary factors like VAT increases would "wash through the system" to reveal an underlying lack of pricing pressure in the economy.

But, inflation is "not a problem for the UK", Mr Woodford says.

I think many would care to differ with him there.

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  • 144 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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