They spoke out at today’s Great Housing Market Debate, in London, hosted by economist John Wriglesworth.
Guests representing various sectors of the property and mortgage industry asked a series of questions to a panel of experts.
The panel was asked if the crisis engulfing the US economy could lead to a UK recession.
Evan Davis, economics editor for the BBC, says: “It would not be my expectation.”
He says the UK economy cycle does not need a recession, but he claims it needs a “significant slowdown” to bring inflation back within the Bank of England’s target of 2%.
He adds: “It’s a question of whether we can manage the slowdown, how people build up their savings and how we can avoid a vicious circle. But I would not want to rule out a recession.”
Fionnuala Earley, chief economist for Nationwide, says: “We don’t expect to see a recession. There are such vast differences to the economy we have now and the economy in the early 1990s.”
David Miles, chief economist at Morgan Stanley says: “The labour market remains strong and unemployment continues to fall. The number of total job vacancies in January was at a 10-year high.
“While I am pessimistic about house prices, that doesn’t mean a knock on effect for the economy in the form of a recession. We are in for a year of 1% or 2% GDP rather than the 2% or 3% that we’re used to.”
He adds: “A repeat of the early 1990s is clearly possible but not within most economists’ forecasts.”
Richard Donnell, director of research at Hometrack, says: “It’s all about consumers and what they spend their money on.”
He warns that if lending gets squeezed further, and consumers stop spending on various types of commodities, then the economy could fall into a vicious circle.