The scale of the losses and the economic knock-on effects of the global credit crunch may not be as heavy as first feared, according to the Bank of England. The central bank claims it is still concerned by the instability, but believes conditions could stabilise soon. The crisis has hit money markets and consumers round the world, pushing the global economy to the edge of a sharp slowdown.
Current market estimates as to the actual cost of the credit crunch vary with the International Monetary fund claiming its around 645 billion euro, the OECD estimate around 245 billion euro, while the Bank of England reckons its about 103 billion.
Such huge sums appear abstract compared to the reality of those individuals and families who are in real danger of losing their homes.
Adam Sampson is Chief Executive Officer of UK-based housing and homeless charity Shelter, he said, “We are increasingly seeing thousands of people coming to us who are falling behind with their mortgages and are really in danger of being repossessed.Overall, we are expecting to see 45, maybe 60-thousand households losing their homes this year.”
The Bank of England has been criticised for its unsympathetic line on the lending squeeze. The US Federal Reserve, on the other hand, has drastically cut interest rates and along with the European Central Bank, made money easier for banks to get hold of.