Ooooooh. Difficult one to call this. Obviously it would be comforting to believe the former, but the latter is also a possibility. One problem could be (1992 style) if the backdraft also produced a run on sterling, then it might be very difficult for the BoE to bring interest rates down low enough to compensate. Very tricky. We’ll really only know when it happens.

I don’t have the data you asked for I’m afraid.

The housing boom was one of the worrying signs that Britain is moving towards a credit-based consumption driven economy. Could a levelling-off stop that, or only the inevitable crash sometime in the future?

It’s now out:

“U.K. house price growth slowed on an annual basis for a second month in September as higher borrowing costs curb consumer confidence, Nationwide Building Society said….

“House prices gained 3.1 percent in the third quarter, compared with a 5.3 percent increase in the second, Nationwide said. The lender predicts monthly price growth will accelerate to a seasonally adjusted average of 0.8 percent for the final three months of the year to meet its forecast of a 15 percent increase in prices in 2004″

Bang on target I would say. But anyway one to watch going forward.

Ok, thanks for this. This would be another dimension of the situation, the inevitable fiscal tightening to bring the deficit under control I imagine.

“You probably shouldn’t read too much into one month’s data, but the Halifax’s (or is it that Nationwide’s) September survey is out Thursday.”

I agree. But I’ve been watching this since the early summer and while there is some variability in the data being collected there does seem to be a slowdown on the way. My guess is that the interest tightening is working.