Thursday, July 3, 2008

Risk of Recession In UK

A series of bad economic data suggests that the UK is at risk of its first recession since 1991.

The stream of bad news includes:
  • Falling house prices (an important barameter of economic well being for homeowners in UK)
  • Rising mortgage costs due to credit crunch and record low levels of mortgage approvals
  • Slumping high street sales, such as Marks & Spencers.
  • Falling consumer and business confidence
  • Falling living standards as consumers struggle with rising food and energy prices.
  • Lower growth forecasts.
  • No prospect of interest rate cuts as the MPC worries over inflation exceeding target
  • Rising government debt, leaving little room for expansionary fiscal policy
Further Reading

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