The credit crunch: how bad will it get?
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It seems that every morning another newspaper headline screams doom and gloom about the credit crunch. But just how serious is it – and how bad is the crunch likely to get? We asked some experts
“Drop in house prices gathering pace”; “City fears job losses from credit crunch”; “House price fall could push 1.2 million households into negative equity”. These headlines have all flashed out at us in the last few months.
Most recently it has been reported that the Bank of England (BoE) has been forced to go to “unprecedented” lengths in order to give the ailing housing market a much needed cash injection.
The effects of the credit crunch on the property market are already being compared to the housing downturn of 1988-1995, with some fearing the crisis could deepen further still.
cut home costs
Meanwhile, many of us are battling against rising mortgage costs and household bills, while credit becomes harder to come by.
The big questions
As Adrian Lowcock, senior investment adviser at IFA business Bestinvest says, the big questions now are, how much will the credit crunch affect the economy and consumer spending? And can the UK weather the storm?
Steve Willey, head of cards and payments at price comparison website Moneysupermarket.com, believes all the media coverage is doing little to help lift the credit crunch gloom.
However, he says consumers are already beginning to use credit cards for everyday spending as they battle increases in the cost of living, along with rising utilities, fuel and food costs and local taxes.
“The days of easy credit seem to have come to an end and consumers need to review their finances and household bills to ensure they have the best deals,” Mr Willey warns.
But just how bad are things likely to get? No one knows for sure, but we’ve tracked down some expert thoughts on the matter.
by Sonia Speedy, 29 April 2008
