Credit crunch all set to get worse
London(online-unsecured-loan.co.uk) July 08, 2008:As more and more lenders gear up their policies to tackle rising defaults against the back-drop of economic slow-down, the conditions of credit squeeze are expected to further intensify.
The state of economy is placed very precariously, because an acute housing market correction is denting the already debilitated corporate and consumer confidence.
"Lenders reported that their expectations for the housing market, the changing economic outlook and changes in their appetite for risk had contributed to the decline in credit availability," the top bank's quarterly credit survey analysed, "Lenders expected these factors to contribute to the tightening in credit availability over the next three months."
According to a survey conducted between the time May 27 to June 18, secured lending to households went down the slippery path with the default rates growing beyond all expectations during the second quarter. Also the lenders expect a further escalation in the situation in the next few months.
"An end to the credit crunch does not seem to be in sight if the Bank's second quarter credit conditions survey is anything to go by," Mr. Vicky Redwood at Capital Economics told, adding further, "Overall, further evidence that the economy is heading for a nasty downturn."
For the present week's figures, manufacturing and services sector are slowing down at the biggest rates since 2001. The construction sector is also falling freely with the gravity. Also the lenders and commercial real estate sector had to suffer at the hands of huge fall in demands for merger credits, acquisition activity and capital investment.
