Signs of a cooling market to gather pace in 2007H2

The upside risks to the interest rate outlook we highlighted in the previous edition of the Housing Market Analyst appear to be materialising. Firms have begun to rediscover a degree of pricing power and CPI inflation hit a 14-year high in March. As the Monetary Policy Committee tries to choke off inflation we think base rates to will reach 5.75% this year; our previous forecast peak was 5.25%.

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