An unexpectedly sharp correction in house prices resulting from the global credit squeeze poses a significant risk to growth in Europe, according to the European Commission.The European Union’s executive arm forecast a gradual slowdown in growth from 2007 to 2008 but said continuing financial market turmoil meant the risks were “clearly tilted to the downside”.Among the threats it identifies is a worsening of the financial turmoil that could hit housing markets in Europe as well as the US “thereby deepening and prolonging the ongoing corrections”.So far, those European countries that saw the fastest growth in house prices, such as the UK, Spain, Ireland and France, have generally seen an orderly slowdown this year. Read more.
