The International Monetary Fund has warned that the UK may be heading for a housing market crash that could hit the entire economy.
In its World Economic Outlook report published last week, the IMF warned that while the UK economy has performed better than most, a shortage of housing, booming prices and rising debt could lead to a sharp correction.
The report says: “The dramatic rise in residential property prices in recent years, especially in Australia, Ireland, the Netherlands, Spain and the United Kingdom, has heightened concerns of an asset price bubble.”
But economist John Wriglesworth has dismissed the report as “claptrap”.
He adds: “The IMF is covering itself from every angle. The only thing that could cause what the IMF predicts is a terrorist attack, a doubling of interest rates or a doubling of unemployment – none of which the IMF is predicting for the UK.”