Ernst & Young has claimed that despite rising interest rates and the prospect of a slowing housing market, the UK's economy will grow by 3.25% during 2004 and 2005.
Our View
Everyone has their view on what the economy is doing. The safest view to take is that nothing is certain.
If you are a borrower, you need to assume that interest rates will continue to rise, even if house prices slow. Be prepared to pay more in mortgage payments and do not expect the value of your house to keep rising.
The best advice we can give is to be prepared. If interest rates stay the same or fall, you will have some extra cash to save or spend.