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UK government fears house prices slump

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UK government fears house prices slump

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House prices in Britain could fall at least 5% to 10% this year according to confidential government documents accidentally revealed to reporters by the UK housing minister Caroline Flint. As she was going into a cabinet meeting Flint carried her briefing notes in a transparent folder, which meant journalists could see them.

That came as the Bank of England warned that economic growth in the UK might grind to a halt dragged down by the housing-market slump and as inflation is likely to remain above 35 for “several quarters.”

The housing minister’s notes revealed that the British government “can’t know how bad it will get” raising the spectre of so-called ‘negative equity’ where people cannot sell their homes because they are worth less than they paid for them.