The UK housing prices have been plunging for the last year or so, and the latest monthly data shows no sign of recovery. With more and more people losing their Jobs every month, the problem is only expected to get compounded in coming months. The UK Central Bank has already cut its interest rates aggressively in the past couple of months, and more cuts are likely in the near future.

Experts tracking the housing prices, say that further housing price erosion will be hitting the base confidence of millions of people, and even genuine buyers might stay away from buying their houses. That can have a cascading effect on host of industries and the economy as a whole.

So, expect the UK government to take further drastic measures in the coming months, which might include taking the interest rates to almost zero levels like the US FED. As it has already used all the tax related tools, it might take the final step of going in for fresh currency printing in order to boost the economy and put fresh life into the banking system.

Let us all hope that the UK economy revives at least by the end of 2009, because continued downturn in UK and US would mean more pain for the rest of the world, which is not acceptable.