2003 growth rates less than 2%

An expected slow-down in the housing market will reflect on consumer spending, and mean that growth rates will be at least 0.5% below the revised estimates predicted by Gordon Brown in his pre-Budget report.

Roger Bootle, UK economic advisor at Deloitte and Touche said: 'The catalyst for a sharp slowdown in spending growth will be the bursting of the [housing market] bubble.'

Although he predicts house prices to increase by around 20% this year, it will be transformed into a fall of 5% next year and 10% in 2005.

He went on to add that sharp reductions in house prices had traditionally been followed by recession.