Gordon Brown has dismissed fears of a housing market meltdown, following warnings from the International Monetary Fund that it was the biggest risk economic stability in the UK.
Last week the IMF forecast growth of 3.5% in the UK, but warned that it was concerned about the possible effect of rising interest rates on the housing market.
But speaking at the spring meetings of the IMF and the World Bank in Washington over the weekend, Brown challenged the funds' findings, countering that “while house prices have certainly risen, people's mortgage payments as a share of their income, particularly for new owners, are still far below what they were 10 years ago.
“The reason that this is the case is that the UK has achieved a greater degree of stability as an economy; the UK has not had the interest rates that were at 10% during the last world downturn, under the Conservatives. It was in these situations that people suffered a great deal.
“I expect that while consumer spending will continue to grow, it will not grow at so fast a rate as in previous years.”