Financial Advice UK - UK economy News - RBS Chief Warns That UK Slump Could Last For 15 Months

While today’s decision by the Bank of England MPC was literally a no brainer it does not help the thousands of home owners who are struggling to make ends meet. As we read another report from the...
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UK economy News - Last Updated Wednesday 11th June 2008

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RBS Chief Warns That UK Slump Could Last For 15 Months

Wednesday 11th June 2008

Sir Fred Goodwin, the chief executive of Royal Bank of Scotland (RBS), has suggested that the UK economy may suffer for at least another 15 months before we see any sign of improvement. Sir Goodwin’s comments have not gone down particularly well in the City, just days after the Group secured a £12 billion rights issue to increase the financial strength of the bank.

There are many analysts that believe he should have been a little more forthright in his opinion of the economy prior to the rights issue offer closing, rather than waiting until the funds had been secured before giving his opinion on the economy. While in all honesty his comments are not out of line with those of many economists, some feel this rather downbeat assessment is a little more damming than that contained within the fund raising literature.

Sir Goodwin also confirmed that RBS will be tightening the criteria which it uses to confirm and approve customer loans, suggesting that this new regime may last between 12 and 15 months. While there is no doubt the assessment by Sir Goodwin is honest and inline with many experts, it does not help those who took up their rights issue shares in the short term.