The IMF has warned that Britain's economy will suffer if the housing boom falters.

Its report said: "Uncertainties ahead may make for choppy waters. A less benign scenario may unfold if house price increases unwind rapidly and unemployment starts rising."

Forum Response: Institute of Directors

A spokesman for the IoD told ePolitix.com: "We have to concur with the IMF's assessment. The economy is certainly very difficult to read at the moment and the imbalances seem to be getting worse.

"Add to this the current public sector wage demands and the possibility of pay claims spilling over into the private sector - which would prove highly inflationary - and the situation could be very precarious. We do, however, expect the housing market to come off the boil gradually rather than crash and consumer spending to moderate in the New Year."

Forum Response: British Retail Consortium

Bill Moyes, director general for the BRC, said: "We expected November's figures to be low, and so they are. This is mainly because regular interest rate cuts generated especially strong retail sales growth in November 2001.

"However, the underlying trend of sales growth remains positive. Christmas is likely to be satisfactory, but perhaps not spectacular. If that proves true, the case for a further cut in interest rates will strengthen."