Another house price slump could make Osborne's job much harder

The Office for Budget Responsibility is being overly optimistic in its outlook for house prices. And if their expectations aren't met, things will be tough for the Chancellor.

I've just read an interesting piece of research from Capital Economics.

The Office for Budget Responsibility (OBR) the newly-formed body which is meant to be a neutral observer of the British economy is nothing if not thorough. The OBR's forecasts include details of house price growth predictions. It expects prices to rise by 5.9% this year, 1.6% next, 3.9% in 2012, then 4.5% thereafter.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.