U.K. House Prices Decline, Worst Streak Since 1995 (Update2): “U.K. house prices fell for a third month in November, the worst performance in more than a decade, and services growth slowed, increasing speculation the Bank of England will cut interest rates tomorrow.
The average cost of a home in Britain declined 1.1 percent to 194,895 pounds ($400,000) from a month earlier, a report by HBOS Plc showed today. Prices last fell for three months in a row in 1995. Services from banking to travel grew at the slowest pace in four years last month, according to an index by the Chartered Institute of Purchasing and Supply.
The pound fell to a four-year low against the euro as banks including Barclays Capital switched their forecasts to predict the Bank of England will reduce its benchmark rate. While Governor Mervyn King says he's still concerned about inflation, rising credit costs are threatening to drag down the housing market and hobble growth in Europe's second-largest economy.”
Again… There can be no doubt. The real estate bubble is bursting in the UK. The same mess that is currently causing so much misery in the US will occur in the UK.
“The U.K. economy is slowing from its fastest pace in three years as the financial services industry reels from the subprime slump and rising credit costs discourage consumers with record debt.”
The credit crunch is definitely causing casuallities…
U.K. Consumer Confidence Falls Most Since 2004, Nationwide Says: “U.K. consumer confidence fell the most in at least three years in November as higher borrowing costs and rising prices discouraged spending, Nationwide Building Society said.
An index of sentiment taken from a survey of 1,001 people declined 12 points to 86, the largest drop since the gauge was introduced in May 2004, Britain's fourth-biggest mortgage lender said today in an e-mailed statement. A measure showing willingness to spend fell 14 points to 63, the lowest recorded.
The report is the second to suggest pessimism among consumers deepened in November after contagion from the U.S. subprime slump raised credit costs for Britons with record debt, and oil prices rose close to $100 a barrel.”
There you have it. People are finally waking up to the fact that they’ve fucked themselves into a nasty little debt corner. Most baby boomers probably did not envision their retirement to be indefinitely postponed… The sudden realization that they are nothing more than debt slaves has noticeably dampened their moods.
U.K. Rate Forecasts Change to `Cut' on Signs of Slowing Growth: “U.K. economists at Barclays Capital, Lloyds TSB Group Plc and Royal Bank of Canada changed their predictions for the Bank of England rate decision tomorrow and forecast a cut after reports signaled the economy is weakening.
Simon Hayes at Barclays, Kenneth Broux at Lloyds TSB and Richard McGuire at Royal Bank of Canada said the central bank will lower its benchmark interest rate by a quarter point to 5.5 percent. All three previously forecast no change. Global Insight Inc., RIA Ltd., Wachovia Corp. and Ideaglobal also altered their predictions, saying the bank will reduce the rate.
U.K. services from banks to airlines expanded at the slowest pace in four years last month, house prices declined in their worst streak since 1995 and consumer confidence fell the most since 2004, separate reports showed today. The new forecasts widen the split among economists, who are the most divided on the central bank's decision since June 2004.”
Bank of Canada cut. The UK will probably cut. Slowly rates the world over will go down in an attempt to ease the credit crunch.
