Mervyn King, the Governor of the Bank of England, gave a stark warning yesterday that the financial excesses of recent years will lead to misery for homeowners, The Independent reports.
In his gloomiest assessment to date of the prospects for British homeowners, Mr King said the recent financial "party" of cheap credit and excessive risk-taking has left a situation where "when the party ends, some innocent bystanders may lose their homes altogether."
Mr King's gloomy comments are unlikely to be welcomed by ministers. The credit crisis, Mr King suggested, "is not yet over". He said: "We are passing through the most prolonged period of financial turmoil that most of us can remember. Whether, as the IMF has argued, it is the worst period of financial stress since the 1930s is too early to judge".
THE UK ECONOMY ground to a virtual halt in the past three months and now faces the prospect of higher interest rates, a leading economic think tank has warned, according to The Telegraph.
Gross domestic product expanded 0.2% in the three months to the end of May, according to the National Institute of Economic and Social Research (NIESR).
The body, which advises the Treasury and the Bank of England, added that 0.2% pace was slower than the 0.4% pace it believes the economy grew in the three months to April.
CHINA’S STOCK MARKET fell to its lowest level for 12 months this morning, after the country’s central bank ordered lenders to set aside more reserves and a report showed that producer price inflation jumped in May to the fastest pace in more than three years, The Times reports.
The People’s Bank of China told banks to set aside record reserves to curb credit growth and inflation, as the national statistics bureau reported factory-gate prices rose 8.2% from a year earlier, after gaining 8.1% in April.
China's CSI 300 Index tumbled as much as 3.4%, extending yesterday's 8.1% drop, to its lowest level since April 2007, with banks the biggest fallers.IFAonline
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