Bank of England survey suggests more finance available in 2009
A survey by the Bank of England has suggested that while the first quarter of 2009 will be difficult, there would appear to be a significant improvement forecast for the second quarter. Many UK banks and mortgage companies have reduced liquidity levels for the first three months of 2009 although a less than expected reduction in mortgage demand surprised many.
As a consequence it looks as though finally we should start to see increase liquidity in many areas of the UK financial markets, which should in due course assist the recovery of the UK economy. Liquidity is the key to all aspects of an economic recovery in the UK because without additional finance available it would be difficult to kick-start the property market. Also , when you also consider the expected increase in liquidity for 2009, together with a rise in property prices for March, we may well be about to see the "green shoots" of recovery.
MPs have been very reluctant to forecast the bottom of the UK economy due to adverse criticism given to some rather upbeat, and ultimately wrong, comments towards the end of 2008. If we do manage to get the double whammy of increased liquidity in the mortgage market and rising property prices this would bode well for the rest of 2009 and 2010. However, we have had many false dawns before and it is advisable not "to count your chickens before they hatch".
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