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EC predicts UK recession

The European Commission has predicted the UK will be in recession by January 2009.

The analysis was conducted by the EC as part of its interim forecast for every country in the European Union.

Following zero growth in Q2 2008, the EC predicts the UK will see negative growth of -0.2% in Q3 and Q4. Two successive quarters of negative growth constitute a recession.

The eurozone saw economic growth of -0.2% in Q2 but the EC predicts this will rise to 0% growth in Q3 and 0.1% in Q4.

Germany, France and Italy experienced negative growth in Q2 but only Germany is predicted to go into recession.

Joaquin Almunia, economic and monetary affairs commissioner at the EC, says: “We must speed up the implementation of a road map to help restore financial confidence.”

The heads of HBOS and Nationwide offered gloomy forecasts for the domestic mortgage market last week.

Andy Hornby, chief executive of HBOS, predicted that liquidity will not return to the market until 2010.

He says: “It’s going to take 18 months before US house prices rise again, which is what’s required for banks to have the confidence to start lending.”

Graham Beale, chief executive of Nationwide, says UK house prices could fall by 25% before the market starts to improve in 2010.

And Savills Private Finance forecasts a 25% fall in house prices over the next 18 months.

Its Residential property focus report suggests that the devaluation will present opportunities for clients looking to buy property.

But it stresses that this could lead to a polarisation of the market, with the equity-rich at one end and borrowers in negative equity at the other.


Spare a though, no your pennies – save them

As Meltdown Monday drags into Trembling Tuesday there are a lot of
people very angry that Lehman Brothers’ collapse was allowed to happen in the manner it did.

CBI calls for rate cuts amidst weak growth

Businesses are calling for a 0.5% rate cut against a forecast of the weakest growth since 1992, reveals the Confederation of British Industry.

Brokers say no market recovery until 2010

Brokers and estate agents are in agreement that the property market will not fully recover until the end of 2010, reveals a poll from Easier2move.

Market shocks speed up evolution

And so it came to pass that Fannie Mae and Freddie Mac, the US’ two largest mortgage consolidators, were effectively nationalised as their weaknesses in the face of $14.9bn in net losses posed an unacceptable risk to the US economy and by extension, the world’s.

9 October thumbnail

Johnson Fleming set to host webinar on auditing auto-enrolment schemes

With 23 auto-enrolment compliance notices issued by the Pensions Regulator, and an evolving legislative landscape meaning previously compliant schemes may now be in breach of regulation, now is the time to think about auditing your auto-enrolment scheme. Johnson Fleming is hosting a webinar on 9 October at 11:00 on how to audit your scheme to ensure compliance, avoid breaches and fines and overcome data issues.


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