Housing market starts to nose-dive

The news on the housing market over the last month has simply been dire. The Nationwide recorded its eighth consecutive fall in house prices in June, leaving prices some 8% below their autumn peak. And the collapse in the number of mortgage approvals to well below the levels reached in the early 1990s suggests that, by the end of the year, prices will have fallen by 15-20%. But the further deterioration in the inflation news means that, while the MPC is unlikely to raise interest rates, it is unlikely to cut them again until late this year at the earliest.