Speaking at today’s Building Societies Association annual conference in Birmingham, Parker said: “One area I think the game is frankly over is UK consumers using their houses as a cash machine.
“If you assume as I do that UK house prices are going to flat line for the next two to three years or longer and if you assume more prudent mortgage standards, I think this issue of equity withdrawal from the housing stock will probably remain very limited.”
Parker said he thought there would be a “sober” recovery and the economy overall would grow between 1-2% a year over the next couple of years as consumers paid down debt and increased their savings.
He said: “My overall theme on the consumer is one of modest growth. The consumer has already dramatically adjusted his debt burden...[which we can see] in savings which are being rebuilt. If I was working in your industry I would think intelligent and well thought out savings products are important as the savings ratio will remain high.
Incomes are going to be under some pressure with inflation at current levels and with real disposable incomes being negative, we’re not going to see a great deal of consumer income growth
