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Research Team_blog  

viewmynewz looks at debt    

Posted by: viewmynewz     
Whilst there is still some uncertainty in world markets, there appear to be those legendary `green shoots` that are the first signs that things may be getting better rather than worse. There is no doubt that this recent recession was not only deep but also one of the fastest to impact in history. The speed of the decline aligned to the fact that it started in the financial services sector unsettled confidence and put the brakes on the lending and cash in circulation. This put a rapid halt on the previously strong consumer spending upon which much of the world economies depended. So what can we look to as signs that the recession has bottomed out and may be on the upward trend? Many of us are not financial experts or can claim to have `second sight` as to the outlook. But there are plenty of people who are paid to do just that on behalf of central banks, government departments and big business. The Bank of England recently published a cautious economic outlook citing a slow growth over the coming two years with inflation rising to more acceptable levels. With global markets now interlinked to a high degree, restoring confidence in the banking and financial services sector has been a key factor in getting cash moving again. Businesses, and many consumers, rely on borrowing for short term cash flow and to support growth. Whilst the price has been high in terms of public finances, stability has returned and the stock markets have now started to rise in anticipation of future outlooks. True, some businesses are still struggling, but in the main the finances to keep going are now being supplied and the pace of corporate closures is slowing. Most of us look to the housing market as an indicator of economic prospects. After a series of months of falling process, the indices used to measure average values on sold properties has stopped falling with one or two months showing small increases. Probably true to say that we have now `bottomed out` and that house prices have reached their nadir (on average) and prices should start to grow as pent up demand starts to drive interest. One key measure is the rental yield on houses which has fallen well below the long term average value ˆ a sign that house price falls have been overdone and should be ripe for a small correction over the coming year. Another welcome sign that things are getting better is that the value of sterling has appreciated against most major currencies. This is an indicator that global currency markets see the UK as a better bet than they did a few months ago when we were in the depths of the recession. This means that holidaying abroad is now back on the agenda but dies mean a slightly tougher time for manufacturing exporters. With political change in the US, there is fresh optimism around a new agenda for American life and business. This has helped to engender a period of sensible pause whilst President Obama sets out his plans for reform and the new direction in foreign and domestic policy. Although it is still early days, global reaction to his general announcements has been favourable; all helping to improve the general sense of optimism for the future. So, there is light at the end of the recession tunnel. A summer without major hiccups should see the UK getting back to small economic growth and being able to build even further into 2010. With an election to come and tough decisions to be made, the general appetite for finding the appropriate debt solution for public and personal finances has never been stronger.

Tags: debt, viewmynewz, news, newz, blog
  

News on the web    

Posted by: viewmynewz     

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