Wednesday, September 12, 2007

Risk of credit crunch reported by BoE last summer

Bank: House prices could fall 25%

"If the UK's debt bubble bursts, house prices could fall by as much as 25% over three years, the Bank of England warned in its Financial Stability Review. The Bank said a sudden jump in borrowing rates - potentially caused by a further surge in the oil price - could cause a 2% fall in economic output and wipe out a year's worth of bank profits, this year estimated to be £40bn. A sharp fall in credit conditions worldwide could cause a 1.5% contraction of the UK economy, a 25% fall in house prices and a 35% drop in commercial property prices over three years, according to the scenarios mapped out by the Bank."

Posted by steve g @ 12:47 PM (908 views)
Please complete the required fields.



6 thoughts on “Risk of credit crunch reported by BoE last summer

  • planning4acrash says:

    Wow, those general economic bits are extreme and worse that I thought. But the house price bits are interesting, because you start saying, and the rest, because house prices will fall anyway in response to what has already happened, so this 25% fall is likely to be in addition to the problems we are having already, and falls are likely to last way more than 3yrs.

    Reply
    Please complete the required fields.



  • ontheotherhand says:

    Published 13th Jul 2006

    Reply
    Please complete the required fields.



  • only 25%, i reckon 40%+

    Reply
    Please complete the required fields.



  • Yep, Jul 2006 is “last summer” alright. And now it’s happening too. Was too late to do anything about it by Jul 2006 though, talk about insight after the event.

    Reply
    Please complete the required fields.



  • Hang on a cotton pickin’ minute!
    So the BOE is warning of oil price problems, a contraction in the economy, a jump in interest rates and a credit crisis. As if they are simply interested bystanders warning the uneducated masses to be careful !!!!!
    Fast Eddie, the previous BOE ‘leader’ told the Treasury sub-committee that he and Gordy knew in advance that when they reduced interest rates to the extent that they did, this current fiasco would result, but that it was a problem that their successors would need to deal with. I suppose that ‘swervin’ could say “it wasn’t me, it was broke when I got here” but it was the bank what done it not the individual govenor. This is therefore a case of being wise before the event not afterwards.

    Reply
    Please complete the required fields.



  • Nobody has an interest in the truth of how this will play out. We are all brainwashed fools. What are we doing hoping for a crash so the unpleasant small flat in some part of the UK comes down to 150K !?
    If you actually had the money to buy I don’t think anybody would, just a mental trick because borrowed money isn’t real. If I had enough money to buy a shabby flat in London, i.e. 200K, and I really had that money, I wouldn’t buy and nobody would. You can live out your life in luxury somewhere else for that much. Did you think of Spain ?
    !
    I think that house prices in the UK are going to get the most massive hammering possible, and I also think that the UK is basically done. I live in London and I suppose that many people don’t, but would you really want your children to grow up in London in ten years from now? No you wouldn’t. The UK is facing (no point saying we anymore) a catastrophe.
    This is a failure of our society. Labour voters still think that they are abused by the rich and that money grows on trees, but they miss the irony of re-introducing the 1920s on themselves.
    Doff your cap or get a kick.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>