Bank of England Warns of Increasing Loan Defaults

Fri, 03 Oct 2008

The Bank of England has warned that the worsening credit crunch is likely to lead to an increase in loan defaults. The central bank confirmed that house prices have fallen again recently, and a combination of reduced consumer spending power and a significant reduction in the availability of credit has contributed to grim predictions for the next quarter.

A report from Nationwide revealed that house prices fell by 1.7 per cent in September, becoming the eleventh consecutive month in which house prices have fallen. Unsurprisingly, the past year has seen the highest rate of decline – 12.4 per cent – since Nationwide began publishing its monthly figures in the early 1990s. Nationwide’s chief economist, Fionnuala Earley, said, ‘The higher cost and lower availability of finance resulting from the credit crunch were factors in triggering the slowdown’.

Suggestions of decreased consumer spending power were given credence by Marks and Spencer chairman Sir Stuart Rose, who revealed the company’s worst sales figures for three years. Rose said, ‘We want shoppers to have confidence, but they are worried about inflation, they are worried about interest rates, they are worried about their house price and they are worried about the safety of their money in their bank ’.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

Credit Crunch Savers
Amex Cash Back
Credit Card
Get 5% cash back on purchases with Amex
Virgin Credit Card
0% APR on balance transfers for 16 months
Tesco Insurance Sale
50% discount on car and home insurance.
Offer ends 7th Jan 09
Post Office Instant Saver
Protect your savings with the Post Office saver

Paying Too Much?

7 out of 10 people are paying too much for their mortgage. To find out if you're one of them click here or fill out a FREE no obligation enquiry form