The graph the Bank of England didn’t publish

Every 3 months, the Bank of England publishes its Inflation Report. This is packed with useful charts and commentary on just about every aspect of the world economy. It also normally includes the Bank’s own indicator of where UK house prices are headed. This is based on surveys by the Royal Institute of Chartered Surveyors, and figures from the main lenders. But this quarter, the chart did not appear.

So as housing is such an important component of chemical industry sales, I thought I would develop a replica of the missing chart, which is shown above. Based on the latest RICS survey, this suggests that UK house prices are heading for at least a 5% fall this year in real terms. Unsurprisingly, this figure is very similar to the official government forecast contained in the brief that the Housing Minister, Caroline Flint, inadvertently showed to the press this week.
So why was the Bank so coy? Surely its job is to maintain open communications in bad times as well as good? Presumably the government asked for it to be withheld. But why did the Bank agree?

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