Prospects for the UK economy are likely to remain more uncertain than usual for the next few years as a consequence of Brexit, according to UK Finance, which has just released its Mortgage Market Forecast: 2018 and 2019.
According to the firm, data for the first nine months of 2017 shows that the economy has been growing at a slower pace than over the last few years and the UK’s current position is a little mixed, as the rate of inflation has risen while economic growth has been subdued. The jobs market on the other hand has continued to be strong, with the number of people in work close to the highest rate ever. Despite this, and record low unemployment, nominal wage growth has been weak and falling in real terms.
A re-cap of policy responses over the past 12 months
The government set out its plans for the housing market in its February’s Housing White Paper, with a shift towards tenure neutral housing. A key consideration is the plans for the future evolution of the Help to Buy equity loan scheme programme.
The Monetary Policy Committee (MPC) increased the Base rate by 25 basis points to 0.5% in its November meeting, reversing the rate cut seen back in August 2016.