That was Mervyn King talking at a press conference for the Inflation Report, yesterday. He pointed to what is surely any intelligent person's preferred option... static house prices gently shifting price to earnings ratios over the next five years. Interestingly, he also tackled the decoupling of lenders' rates and base rates, suggesting surprise only at people's surprise. Naturally, he said, lenders will want to rebuild margins. More here.

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