Friday 12 September 2008

Britain's Credit Crunch

Britain's economy is hit by the credit crunch. The stock market which had a great run in the past three years or so, is officially into its bear phase. FTSE 100 has fallen from its lofty heights of 6400 on May 19th this year to the current 5300. The same can be said of the housing market. There are more sellers than buyers and the situation just seems to get worse. The news is Barratt Homes (one of the biggest builders in Britain) is trying to attract buyers by paying stamp duty on houses worth up to £500,000 and protecting people selling their Barratt-bought homes from house price falls of up to 15% for the next three years. Such innovative ideas may attract the buyers, but the mortgage lenders are few and far between. Furthermore, London brokerage Savills expects house prices in the UK to fall by 25% over the course of 2008 and 2009. This would surely put off the first time buyers from stepping onto the property ladder.

I had an interesting incident that happened recently, which prompted me to come up with this post. In my earlier post I mentioned that I ordered a Seagate 1 TB Hard Disk from the BT shop. The original order was made on 20th August, scheduled to be delivered by the courier Amtrak on the 22nd. I called them up on 22nd afternoon saying that nobody would be at home and I would collect the parcel from their depot on 23rd, which happened to be a Saturday. On 23rd I was informed that due to some technical reasons they were asked not to give parcels to any customers. Only later did I come to know that Amtrak had gone into Administration on 22nd.

The latest news today is the holiday firm XL has gone into Administration. With the high fuel prices I expect a few of the low budget airlines could go into Administration.

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