The US sub-prime crisis and ensuing credit crunch will cause economic growth in the UK to slow in the next year, according to Ernst and Young’s Item Club forecasts. Earlier this month, the government lowered its own growth forecast for next year from between 2.5%-3.0% to 2.0%-2.5%. Similarly, the Ernst and Young Item Club report cut growth forecast from 2.5% down to 2.1%.
Interest rates are set to rise as a result of the credit crunch, with property buyers and private equity businesses two of the groups set to feel the effects most poignantly. With mortgage rates set to increase, banks have already set the tone by increasing personal loans rates in the last month. Nine major lenders increased their rates in the wake of the sub-prime crisis, including Bradford and Bingley who increased their rates on loans of between £2,000 and £2,950 by 4% to 17.9%. Barclays, however, bucked the trend, reducing rates on the Barclayloan Plus from 7.4% to 6.8%.
Credit Crunch to Slow UK Growth as Banks Increase Rates
Credit Crunch to Slow UK Growth as Banks Increase Rates
Wed, 31 Oct 2007
Recommended links
The Essential Banking GuideLeading Mortgage Lenders
The Best Savings Accounts
Debt Solutions
Bad Credit Loan Deals
Bank of England Borrowings Swell Further
Online Banking Fraud Down
| Banking news |
|---|
| UBS to Make Banking Job Cuts - Wed, 07 May 2008 |
| Online Banking Increasingly Popular - Fri, 02 May 2008 |
| Britains Banks Lose Overdraft Charge Test Case - Mon, 28 Apr 2008 |
| More News |
