Countrywide - why is it rising?

Economy has 14th year of growth
David Smith, Economics Editor



THE economy is heading for its 14th successive year of growth, forecasters say, but the housing market faces a prolonged period of stagnation.
Britain’s expected expansion of between 2.5% and 3%, just below the Treasury’s forecast of 3% to 3.5%, will mark the continuation of a growth run that began as long ago as 1992. On Friday Britain completed a record 50 successive quarters of continuous growth.



This will also be the 12th year in a row in which Britain has outstripped euroland in economic growth, according to Citigroup. It attributes Britain’s superior performance to a higher proportion of people employed in so-called knowledge-intensive industries.

One test for the economy during 2005 will be whether consumer spending is maintained in the face of a weak housing market. New quarterly housing forecasts, to be released by the Centre for Economics and Business Research this week, predict house-price inflation of just 1% this year, followed by a 6% drop in prices in 2006 and a further 2% fall in 2007. House prices in 2010 will be no higher than in 2005, it says.


Remainder of article: