Are we poised is to see the third leg of the credit crunch crisis?
After the initial credit crunch hit the US and began to spread around the world there was a period when many observers believed concerns had been overdone and the markets and economies around the world would return to "normal". However, we then saw a second leg which impacted upon the worldwide financial sector, stock markets, government budgets and other vital elements of "everyday life". However, there are growing concerns that we could be poised to see the third leg of the credit crunch hit the worldwide economy!
Earlier this week we saw concerns appear regarding the Greek economy, which has struggled due to the downturn, with a massive increase in the Greek government budget deficit. There is also the ongoing situation in Dubai which, despite government claims that it is "under control", still has some way to go before it is totally resolved. As a consequence, there is growing fear in the money markets that more governments around the world will struggle to raise funds needed to see them through the short to medium term, a time when the worldwide economy and local economies should start to turn the corner.
The danger is that if economies are starved of potential financial investment in the short term we could see a sharp U-turn and a further lurch downwards. This could literally push the worldwide economy into a depression, never mind a recession!
UK services sector showing signs of recovery
The UK economy is basically centred round the services sector which has been hammered over the last 18 months. However, today we saw further evidence of a recovery with the fourth consecutive month of expansion revealed by the latest Purchasing Managers Index. The index rose from 53.2 in July to 54.1 last month with anything above 50% indicating that those in the sector believe growth is on the wa...Read More
First-time buyers returning to the market
In yet another sign that the UK property market may be on the verge of turning, the Council of Mortgage Lenders confirmed that there was a 2% increase in the number of loans approved for house purchases between August and September, leading to 50,600 deals going through during the period. While the month on month increase may seem fairly small, this is a 43% rise on the corresponding period last y...Read More
Bank of England sticks at 5.25%
The Bank of England has kept interest rates at 5.25 per cent, despite slowing consumer spending.Several reports have suggested that the UK might be moving towards recession due to the ongoing credit crunch.Ordinarily, this would lead to interest rate cuts in order to provide an economic stimulus.However, concerns over increasing food and fuel costs appear to have prevented the Bank from making the...Read More
General Motors in last-minute turnaround on European division
General Motors has stunned the market with news that GM Europe will be sold to Canadian car parts company Magna, which will be part financed by Russian money. This goes against the earlier rumours which General Motors had introduced to the market with a strong suggestion that the operation be retained by its US parent company unless European governments were willing to invest money into the operat...Read More
FSA warns banks about remuneration packages
Just 24 hours after the potential £9.6 million remuneration package for Royal bank of Scotland chief executive Stephen Hester was announced, the Financial Services Authority (FSA) has warned banks not to slip into the "business as usual" mode. Without specifically mentioning the Stephen Hester situation it would appear that a number of UK banks have moved into the staff recruitment sector in a ve...Read More