People in Britain are being warned to expect a worsening credit squeeze this year.
Despite government efforts to try to free up the credit market, a Bank of England survey shows that lenders reduced the availability of loans in the fourth quarter of last year. They also warn they are expecting to cut back even further over the next three months. Another survey out today shows that UK house prices fell a record 16.2 percent last month, and mortgage approvals dropped off to a record low in November. British interest rates have been cut to two percent, their lowest level since 1951, and commentators say they expect a further significant cut next week. This comes at a time when the pound continues to slide on the foreign exchanges.