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Fiscal package will not prevent house price falls

PM Liz Truss’ fiscal package will limit the size of the forthcoming recession, but that may force the Bank of England to raise rates further to get inflation back to target in the medium term. As a result, it increases the likelihood that mortgage rates rise by more than we currently project which means that our current forecast that prices will fall by 7% over the next two years is now a best-case scenario.

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