Financial Times FT.com

The Bank rethinks importance of house prices

By Norma Cohen, Economics Correspondent

Published: November 13 2008 03:31 | Last updated: November 13 2008 03:31

The Bank of England has often insisted that the relationship between house prices and consumer demand is tenuous.

At the airing of the quarterly inflation report six months ago, Charlie Bean, the Bank’s deputy governor, said there had been too much “commentary [that] sometimes rather blithely assumes that there is a very tight link between house price growth and consumer spending”. That relationship, he averred, was much weaker than was widely believed.

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