The Bank of England has downgraded its forecasts for Britain's economic growth.

While the chancellor is predicting growth of 3.25 per cent next year, the Bank is forecasting a more moderate rise of about two per cent.

Mervyn King, who takes over from Sir Edward George as the governor in June, also said the increase in house prices had "passed its peak".

Forum Response: Countryside Alliance

Richard Burge, chief executive of the Countryside Alliance, told ePolitix.com: "The high house prices of recent years have had a serious effect on rural communities.

"The 'second home' phenomenon has pushed prices so high that affordable housing has been a problem for many rural people trying to get onto the property ladder in their home town or village.

"We have welcomed the cuts in council tax relief on second homes and we are now relieved to see that prices may be coming down slightly - both of these factors could mean affordable housing is becoming more within the reach of rural people."