Measures to revive the dormant housing market by increasing the supply of mortgage lending are being planned by ministers, The Times has learnt.
Alistair Darling is poised to intervene to help banks and building societies to secure more finance to grant new mortgages. The likely move comes after the virtual drying-up last year of the mortgage-backed securities market, which had become a crucial source of mortgage lending.
New figures yesterday indicated that house prices were continuing to tumble, with homebuying activity having sunk to the lowest levels for four decades.
The Chancellor is expected to order an extension of the Bank of England's emergency £50bn special liquidity scheme introduced this year to help to ease intense funding strains on banks triggered by the credit crisis.
A RAPIDLY COOLING global economy and an increase in supply from OPEC nations will see the price of oil ease next year, according to The Independent.
In its latest monthly market report, the International Energy Agency looks to a "potential easing in fundamentals for the second half of 2008 and into 2009, before a renewed tightening thereafter", a trend that seemed to be foreshadowed in oil trading yesterday.
The price of a barrel of crude dropped again – US crude settled down $1.44 at $113.01 a barrel, almost $35 a barrel below the record high of $147.27 recorded in July. For now at least, fears of a $250 barrel can be set aside.
A SHUDDER PASSED through the banking industry yesterday when JP Morgan revealed that the credit crunch had forced it to take fresh write-downs of $1.5bn (£790m) on mortgage-backed securities, The Guardian reports.
The disclosure caused a sell-off in investment banking shares on Wall Street as investors were reminded that the crisis gripping credit markets is far from over.
JP Morgan's shares slumped by 7.5%, Merrill Lynch slipped by almost 5% and Goldman Sachs, which was downgraded by an influential analyst, dropped 5.6%.
In a regulatory filing, JP Morgan said trading conditions in the mortgage market "substantially deteriorated" in July. It admitted: "The investment bank continues to be negatively affected by the disruption in the credit and mortgage markets, as well as by overall lower levels of liquidity and wider credit spreads."IFAonline
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