Loans and Finance

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Friday, August 17, 2007

Another Silver Lining

Further to my article yesterday, about lawyers benefiting from the current "credit crunch" caused by the US sub prime fiasco.

There is another silver lining, this time for those holding mortgages in the UK.

The "credit crunch" has left banks and other lenders unwilling to lend money to each other, as they are afraid that there may be hidden losses.

This has led to a squeeze on the availability of loans, and is threatening to cause total market "seizure".

As such, the Bank of England will eventually be forced to reduce interest rates. Most certainly in the short term it will not increase the rates, as had been widely predicted less than a month ago.

Therefore, ironically, those who hold debt may find themselves in a less worse position than those who have invested their money in funds, pensions and equity.

Funny old world, isn't it?

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