Research Briefing | Apr 1, 2021

UK | House price inflation may soon be running on empty

Why big fiscal deficits and low inflation can coexi (28)

The unexpected resilience of house prices last year sets 2021 up to be another year of rising values. But unsupportive macro factors and the end of the stamp duty holiday lead us to suspect some correction may not be long in coming.

What you will learn :

  • Base effects and government support mean we expect 2021 to be another year of house price inflation.
  • Measures announced in March’s Budget should boost housing demand in the short term.
  • But higher unemployment, falling household incomes, and inaction at the BoE present contrary forces.
Back to Resource Hub

Related Services

Post

Why an ageing population doesn’t mean soaring inflation

What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.

Find Out More

Post

Surging global food prices could drive eurozone core inflation higher

Along with energy prices, global food prices have emerged as a key driver of the eurozone's current inflationary surge. Like other advanced economies, eurozone countries tend to be less exposed to global food price fluctuations. But if persistent and combined with strong demand, high food prices could result in a higher pass-through to core inflation.

Find Out More