Halifax has predicted that house prices will rise by a modest four per cent next year.

The comment comes as fresh evidence emerges of a slowdown in economic growth across the UK. The report comes as it is claimed that Labour MPs in the south have called on ministers to stop creating jobs in their constituencies in a bid to avert a "prosperity crisis" which is pushing up the cost of living and squeezing out traditional middle-earning families.

Fresh fears of a US recession are, however, leading some to suggest the UK economy is set to hit a sluggish patch.