Mortgage lender Nationwide is predicting that interest rates in the UK will now peak at 5.75pc as the threat from a slowdown in the US economy increases and inflation eases, The Telegraph reports.
The forecast came despite the lender's latest survey revealing that house prices climbed an average of 0.6pc across the UK this month, up from 0.1pc last month.
However, the annual rate of inflation slowed to 9.6pc from 9.9pc.
The Bank of England, which has said very little publicly during the past month's financial turmoil, indicated in its quarterly inflation report at the start of August that interest rates would need to rise to 6pc to keep inflation in check over the next two years.
CHEYNE CAPITAL MANAGEMENT is pleading with investors for a stay of execution for its structured investment vehicle (SIV) after the crisis in the commercial paper market pushed the SIV close to meltdown, according to The Independent.
The hedge fund is asking investors in its $6.6bn (£3.3bn) Cheyne Finance SIV to agree to a refinancing to prevent an enforced sale of assets. The investment vehicle's credit rating was cut by Standard & Poor's on Tuesday because of the falling value of its assets, which it has been forced to sell.
Cheyne Finance has drawn on three funding facilities totalling nearly $300m, giving it enough funds to pay off commercial paper liabilities until the end of November. The funding facilities were arranged with Bank of New York, Merrill Lynch and Danske Bank.
ROYAL BANK OF Scotland became the latest bank to admit discomfort from the credit crunch as it parted company with the head of its once-booming collateralised debt obligations unit, The Times reports.
Rick Caplan, managing director and co-head of CDOs at RBS Greenwich Capital in the US, has left the bank, along with six of his colleagues.
RBS aggressively and profitably marketed CDOs - packages of sub-prime mortgages and other asset-backed securities - both originating deals and then selling them on.
The sudden loss of appetite for these products and resultant collapse in business has forced RBS to trim the department from 24 people to 17.
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