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Housing market to slow

UK house price rises could slow if last week&#39s attacks on the US knock consumer confidence there, mortgage lenders are warning.

Top economists at Halifax and Nationwide say the atrocity in New York could put the brakes on domestic house prices if US consumer confidence falls, despite interest rate cuts by the Federal Reserve.

The warning comes just weeks after Nationwide revised its prediction for house price inflation to 11 per cent from 7 per cent following higher than expected growth this year.

Nationwide group economist Alex Bannister says the combination of falls in the US stockmarket and rising oil prices could lead to a global slowdown which would be certain to stunt UK house price growth for several months.

Halifax group economist Martin Ellis says the impact will depend on the willingness of US consumers to continue spending despite the disaster.

He says: “If confidence – which has been propping up the US economy – is knocked badly, there will be a trickledown effect on the UK housing market. I think the Bank of England&#39s monetary policy committee will be forced to cut rates to try and counter this.”

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