UK property prices are likely to fall, inflation is likely to be above 3% and interest rates may go into double figures, so warns Alan Greenspan, the previous chief of the US Federal Reserve.
Talking to the Telegraph, he expounded that the UK property market is about to get a rehaul. He stated that there are likely to be some difficulties experienced by the property market.
Mortgage rates are already moving with a great number of two-year fixes beginning to unwind, with teaser rates disapprearing.
Mr Greenspan, presently personal advisor to Gordon Brown, stated that consumer households are going to be more subject to interest rate changes than properties in the US.
He also added in his interview that inflation is likely to pick up and go above 3% and interest rates could reach double figures to hold back increasing prices.
Britain is more likely to experience a credit crunch than the USA according to him.
However, Seven Investment Management stated that Mr Greenspan's remarks are "irresponsible" and that he is doing nothing more than disturbing the market's confidence .
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Trouble Ahead for UK Economy
Wed, 19 Sep 2007
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