Promoting Growth

As you have known, the credit crunch in the USA has affected the UK market by little. I am not saying that it has affected the UK market by a large margin but I think it has nontheless affected the UK by a little. We know that banks and building societies have stated that it will be tougher for consumers to buy houses due to the problems that we have in the USA.

We can see that as a result of that credit crunch, house prices are falling fast. It is like a domino effect on the housing market. I am sure that there are many people who would want to buy a house. Unfortunately they could not due to the stricter requirements of the credit facility. As a result, houses could not be sold. In order to sell any house, house prices would have to decrease so that people can take up loans to buy it. Oh well, it is definately a domino effect.

It was stated that the Federal Reserve is going to cut interest rates to promote growth. Question is whether the Bank of England is prepared to do the same to promote growth? Good question, right? We will have to wait and see then. I really hope that the current situation in the UK will improve. Fingers crossed.