Credit Crunch: 'Worst Yet To Come'

Sky News
Thursday, July 10, 2008

In the last six months, the Sky News Money Panel has become much gloomier about our economic prospects.Right now almost every statistic is pointing in the wrong direction - the cost of living is rising, house prices are falling sharply, companies are laying off staff.

And then there is the ongoing credit crunch.

The portents are looking bleak, the whisper is of recession. The Bank of England's Monetary Policy Committee has a lot to ponder.

We asked the 10 financial experts who sit on the Sky panel when they expect the UK housing market to recover.

If the Nationwide has got its sums right, house prices have been falling for the last eight months.

First-time buyers seems to be waiting to see how far prices will fall and those who do want to buy are finding mortgages have become more expensive.

The panel feel this is the beginning of a long correction and it will be 2010 at the earliest before prices start rising again.

Angela Beech, Head of the Personal Tax Department at Blick Rothenburg told Sky: "It is doubtful whether we have ridden the worst of this yet given that redundancies are in the main being deferred for the time being - more families will be forced into debt to keep a roof over their heads."

We asked the panel if they think the UK economy is headed for a recession. Half said yes and all felt the UK economy is set for several years of very weak growth.

Full article here.

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