Allied Surveyors welcomes interest rate cut

They go on to say that this decisive action will have the following effect:

· House prices will stop sliding and by Q2 2009 prices generally will have stabilised at 20% less than the 2007 Q2 peak but provincial City Centre flats will be 35% off peak.

· 1 million more homes which would have been shown to be in negative equity during Q1 2009 will now be reprieved

· Repossessions will soon peak: abject misery to hundreds of thousands has been averted

· LIBOR will remain heavily weighted over Bank Base for another 6 months but we’ve seen the worst.

· The horrors of deflation have been avoided

The downside is

· The £ will plummet against the euro and the dollar (sub $1.50 and little better than Euro parity)

· Although inflation will fall to 3% in Q1 2009 it will increase to 6% by Q4.

· Because of inflationary pressures, this will be most damaging to retirees on fixed incomes but it will mean the next generation may be able to afford to retire.