The Organisation for Economic Cooperation and Development (OECD) warned on Wednesday that ther UK's economic growth rate will slow in the next two years as a result of a drop of about 10% in property prices. The organisation said in its half-yearly outlook that the downturn in the real estate sector will make the country's economy more vulnerable to the global credit crisis, reducing economic growth to 1.8% this year and around 1.4% in 2009.
The Organisation for Economic Cooperation and Development (OECD) warned on Wednesday that ther UK's economic growth rate will slow in the next two years as a result of a drop of about 10% in property prices. The organisation said in its half-yearly outlook that the downturn in the real estate sector will make the country's economy more vulnerable to the global credit crisis, reducing economic growth to 1.8% this year and around 1.4% in 2009.
'The economic expansion is being slowed by tighter financial conditions, higher inflation and weaker housing market activity,' the organisation said, adding that 'at present it appears appropriate to maintain interest rates at their current level.' The statement by the OECD is likely to prompt the Bank of England to resist calls by house builders for a further cut in interest rates.
