Thursday, Jun 21, 2007
Darling set to inherit a mess from Brown
Reuters: Next chancellor could face a tougher time
With financial markets now pricing in IRs of 6.25 percent by early next year, Brown's successor may be wondering if the job is all it's cracked up to be.
Posted by bricksnmortarhaha @ 03:15 PM (120 views) Add Comment
8 Comments
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1. Orwell said...
Financial markets now expect borrowing costs to hit 6.25 percent early next year...That would take them to their highest level since 1998 and potentially cause severe pain to hundreds of thousands of homeowners who have borrowed to the hilt in order to buy property in a market where prices have trebled in a decade...Warnings signs are already there. Personal bankruptcies have already hit record levels as the total stock of debt held by consumers approaches 1.5 trillion pounds....Home repossessions are also rising despite house prices still rising strongly in most of the country...While no one is predicting an outright crash, many experts are worried house prices will start falling and destabilise the wider economy by hitting consumer confidence and spending hard...Mervyn King, governor of the Bank of England, clearly appears worried by how relaxed credit conditions have become.Excessive leverage has been a major theme of financial crises of the past, he warned on Wednesday evening, urging both lenders and borrowers to exercise more caution.
"Are we really so much cleverer than financiers of the past?" King asked on Wednesday night.
[Darling's]...reputation as a "fixer" within government may be sorely tested if the housing market does indeed take a turn for the worse..
If?..If?......?
2. Orwell said...
Most of us have already resigned to IR's at 6.25%...Its strange that this has talen so long....
7.5% by next year...
Rich?
3. Northernlad said...
Good....but Brown should be made to clean up his dirty mess!
4. Northernlad said...
Labour and inflation are a perfect pair and always have been!
5. Davros said...
Where's david_2004? Weren't we told interest rates were going to be dropping by now?
6. Hurryupandwait said...
I have a measured amount of respect for G.Brown and his very way of manipulating figures to make everything seem hunky-dory which keeps his reputation as a chancellor right up there with the best. This, however, does wonders for the confidence of those in debt to think it is acceptable to continue to borrow beyond their means and that this is just the way of modern life. The result is everyone keeps on spending, thus keeping the economy looking very healthy as it continues to grow, but what happens when they are finally refused credit for paying off their added debt? (i.e. another re-mortgage or that third or fourth consolidation loan) How will they manage to stay afloat then? This will be the Dawn of Mass re-possession IMO, and is only 18 months - 2 years away, leading to the inevitable house price crash.
7. Orwell said...
So a poisened chalice then....
Amazing that this bunch of spivs have been allowed to play about with this economy so long... If I were the gulper I would be running for the polls now!!
8. Orwell said...
Hurry Up..
I always have respect anyone who can manipulate the figures like he has (or indeed any on New Labour)!