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From The Times : London Breaks Away From Britain

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Just browsing yesterday's (31 May 2007) 'Telegraph' and found this piece in the 'Comments' section from Edmund Conway:

http://www.telegraph.co.uk/opinion/main.jh...5/31/do3104.xml

Quoting from this to-begin-with rather bearish article :

Rates at six per cent may not seem like much of a hardship in comparison with the late 1980s and early 1990s, when the government lifted borrowing costs as high as 15.4 per cent - but don't be fooled. Because we are all now more indebted than ever before, we are much more sensitive to even the smallest twist of the screw.

And then a few lines further down :

But a word of reassurance: even if some parts of the country do see house prices fall, the impact on the economy as a whole will not be as severe as in the last crash. Back then, prices slumped dramatically and left one and a half million people facing negative equity.

This time around, banks have been more reluctant to let people over-extend themselves, and so aren't lending quite as generously as they were before. They, after all, are the ones who pick up the bills if people start defaulting.

This to me sounds as though he's contradicting himself, but what does everyone else think ?

(I haven't read the comments on the Telegraph's page)

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