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Archive for August, 2007

Are We Heading Towards a Recession?

Thursday, August 16th, 2007

Stocks CrashThe big question bouncing around this week is “Will the UK’s debts drag the economy into a recession?”. The average household owes almost as much as their yearly earnings now, money has been too easy to borrow and naturally the UK has taken advantage of the situation allowing for bigger and better assets and more disposable incomes.

Huge crashes in the US stock market today have affected countries all around the world, banks are likely tighten their lending habits as the level of risk continues to increase. Will interest rates rise again to dampen consumer spending even more? Will US house prices continue to fall? I can’t help but wonder, “Is this the beginning of the end?” And by that I don’t mean the end of mankind (obviously) I mean the end of the housing boom!

Clearly a recession is a less that ideal situation for the economy, but unfortunately I personally think that’s where we’re heading.