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World credit crunch could bite harder, warn experts SAM FLEMING A trio of the world's leading financial and economic analysts yesterday sounded a grim warning about the effects of the global "credit crunch". Band of England deputy governor Sir John Gieve, former U.S. Federal Reserve chief Alan Greenspan and the Organisation for Economic Cooperation and Development all said that financial markets are deteriorating as the lending squeeze continues to bite. Sir John, who is responsible for UK financial stability, signalled he is increasingly worried that the credit crunch could have dire effects on the British economy, while Mr Greenspan said "progress has come to a halt". The blizzard of warnings came as shares in the stricken bank Northern Rock plunged 14 per cent to 84.8p.
The woes in the mortgage sector helped push the FTSE 100 index of blue-chip firms down 155.6 points to 6070.9, its lowest closing level in three months. At 10.45 this morning the FTSE-100 index was struggling and was down 25 points to 6045.9. Northern Rock has now lost more than 93 per cent of its value in the past year. Yesterday's slump came as the bank revealed it had received takeover proposals valuing its shares "materially below" their market price. The Government is trying to finalise a shortlist of potential bidders within days.
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