Pound bombs as credit crisis worsens
The pound is down to $1.9850 this morning after U.K. banks forecast that the credit market turmoil will last at least until the end of the year, twice as long as they predicted three months ago, according to a CBI survey.
Lending conditions will worsen in the next six months, leaving banks with "significantly'' higher borrowing costs, according to the quarterly survey of financial firms.
The rising cost of capital will herald a "prolonged period of slower growth,'' McCafferty said. Forty percent of companies surveyed said their difficulties in raising money will hold back development, up from 24 percent in the previous quarter.
Sterling slipped to a record low against the euro Monday, extending its losing streak after figures showed British house prices fell for the sixth consecutive month in March.
Housing market research company Hometrack on Monday said UK house prices fell by 0.2 percent this month to stand just 0.4 percent higher from a year ago, further denting sentiment on the UK economy.
Lending conditions will worsen in the next six months, leaving banks with "significantly'' higher borrowing costs, according to the quarterly survey of financial firms.
The rising cost of capital will herald a "prolonged period of slower growth,'' McCafferty said. Forty percent of companies surveyed said their difficulties in raising money will hold back development, up from 24 percent in the previous quarter.
Sterling slipped to a record low against the euro Monday, extending its losing streak after figures showed British house prices fell for the sixth consecutive month in March.
Housing market research company Hometrack on Monday said UK house prices fell by 0.2 percent this month to stand just 0.4 percent higher from a year ago, further denting sentiment on the UK economy.
