Economy risks slipping into recession

It’s no secret that we could possibly be slipping into recession, although the Bank of England kept the benchmark interest rate at 5 percent this month, the Banks have all raised their mortgage rates, and make it much harder for people to borrow, the supply of credit is limited so we are faced with problems obtaining money.

The growth of Britain’s economy is matching the slowest pace since 2001 and a mere 0.2 percent in the second quarter. Homebuilders and banks have been forced to cut jumps resulting is the highest jump in unemployment in June since the aftermath of the last recession in 1992.

The subprime mortgage market has cost financial institutions $469 billion worldwide in write downs and losses, which has caused banks to curb their lending. Meanwhile British Bankers Association as reported the lowest slump of mortgage approvals in June for a decade.

The Royal Institution of Charted Surveyors said for the first time since 2005 there has been a decline for farmland, the gloomy economic outlook has affected the pound’s 12 percent decline against a currency basket of Britain’s main trading partners, making exports cheaper for overseas buyers.

Source: Bloomberg

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