The latest round of bombings in London is expected to sour the falling property market in Britain in the short term but may prompt the central bank to introduce interest rate cuts sooner than expected to revive consumer activity, according to analysts.
Last week, four small bombs failed to detonate properly on three London Underground trains and a bus, in a repeat of an attack that hit London two weeks earlier, in which 56 people died.
Althought last week's attack resulted in only one casualty, confidence has been shaken.
Milan Khatri, chief economist at the Royal Institution of Chareterd Surveyors, said the attacks would exert pressure on falling prices in London.
He added that the terrorist attacks might force Britons to further tighten their purse strings.
People were increasingly worried about the country's economic prospects, spiralling debt and the health of the housing market this year, he said.