I think it’s better that I write this piece now lest I be misunderstood by some who have read my previous posting that I don’t share the view that the UK is now facing an imminent recession. It’s not me who is the bearer of this bad piece of news, everyone is saying it, the sentiment is all over the place. The politicians, the economic pundits, the administrators and the businessmen are all saying it. Even the Chancellor of the Exchequer has joined the ‘chorus’.
Indications are there for all to see, and they are expounded daily in the newspapers and in the television. Unless you don’t read the papers and and watch television or else you can’t mss it. It is a long list of woes, not pleasant to listen to at all. I would like to list them here so as to add a wee bit of weight to the warning.
Twelve million British households would be facing soaring fuel bills as the electricity and gas giants are hiking the prices of their commodities. These increases would meant the householders would be carrying a heavier burden as they are not expected to get any pay increase this year.
Homebuyers are facing an uphill battle to get mortgages to buy their homes. They now need an average of deposit of £40,000 to qualify for a best buy mortgage deal. This makes it very difficult for first-time homebuyers to purchase houses. Banks have tightened their lending policies, mortgage lending has gone down by 65 per cent.
Another indication of a recession is we are seeing borrowers falling behind in their repayments. Twenty-five per cent of borrowers in the sub-prime sector is already behind in their repayments.
Actual figures show the British economy has grind to halt between April and June of this year. This is the worst performance in 16 years.
A leading Liberal Democrat who had been the chief economist of Shell before warns that this protracted recession may even last for ten years. Frightening, isn’t it? A Bank of England rate-setter has called for a bigger cut in rates to avoid a protracted slump. He predicts two million people will be unemployed by this year end. He gives a very pessimistic view of the UK economy – he says the bank and construction sectors are cutting jobs and the job-cuts will get worse. He feels the prices of houses will fall by 30 per cent.
If some of you still harbor doubts, this piece of evidence should cast away all your doubts. If this doesn’t convince you nothing else will – this is the proof of all proofs – Divorcing couples are forced to live together by the credit crunch !!!
May all be saved from sufferings. May we prevent our own sufferings by being more frugal and less wasteful.
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