The UK economy is facing slowing growth due to the credit crunch yet there is unlikely to be a property crash, so says a group of economic analysts.
The Ernst and Young Item Club predicts that growth in 2008 is likely to fall between 0.4% to 2.1%.
The credit crunch is an opportunity for the economy to rebalance. They economy has become too dependent on lax credit and monetary conditions.
Given the decline in growth of the economy, serious house price decreases are not anticipated.
In the wider economy, greater falls are not anticipated due to the tightening of lending on international markets, due to the UK economy's stability and strength.
The imminent threat of a major credit crunch is not likely .
Longer term effects are difficult to predict. There is however a very timely tightening of sectors of the financial services market that were growing too quickly or were too reliant upon cheap credit.
There is unlikely to be a major housing recession due to decreases in mortgage rates as well as the strong labour market
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Credit Crunch to Affect UK Economy
Mon, 22 Oct 2007
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