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!
Bank lending rates continue to fall but investors are nervous
The rate at which UK banks will lend to each other has fallen for fourth day in a row and now stands at 2.19% on a three-month basis. This rate very much suggests that UK base rates will fall further in the short term and the indication from the Bank of England seems to confirm that situation. The concern is that even though finance costs have fallen sharply since the highs just a few months ago t...Read More
Is Ofgem just a figurehead with no power?
As we covered yesterday, the various energy companies in the UK have come out fighting against accusations from energy regulator Ofgem that customers are being overcharged. Despite the fact that Ofgem has quoted figures from the last three years which show the average profit per dual fuel deal is now £170, against an average of £110 over the last three years, the sector still refuses to budge.
Toyota Motor registers first loss since 1941
Japanese car manufacturer Toyota Motor has this evening announced its first loss since 1941 amid the carnage of the car manufacturing industry. This is the latest setback for an industry which has literally falling to its knees over the last few months with thousands and thousands of cars waiting to be delivered to forecourts never mind being sold.
The news from Toyota Motor is expe...
UK pound falls to 28 year low
The UK pound has today fallen to a 28 year low against a basket of leading currencies including the dollar and the euro. As further concerns are expressed towards the health of the UK economy and the ever-increasing national debt, which now stands at approaching £1 trillion, there appears little reason for traders to switch into sterling at this moment in time. The fact that interest rates are se...Read More
Scottish construction industry under pressure
The Scottish construction industry is still under pressure with workloads in the public and the private sector falling marginally in the final quarter of 2009. However, while there are signs of increased activity in the early part of 2010 it is believed that the vast majority of this is from publicly funded projects introduced by the Scottish parliament. Many analysts and economists have accept...Read More