Sky News business presenter Emma Crosby
Warnings of a US recession, here in the UK house prices are falling, consumer confidence is hitting the rocks and our economy is looking decidedly soggy.
Oh dear.
Maybe now’s the time to pack a bag and head to sunnier climes to forget our woes for a week or two. Great idea, but rule out Europe.
A summer jaunt on a Mediterranean beach or chic city break in Barcelona may not give the much needed escape from the financial strains we’re all beginning to face.
That’s because the pound continues to fall against the euro. It’s been weakening all year and today hit a record all-time low.
So, now it’ll cost you around 80 pence for every euro you buy. One trader I spoke to today believes the exchange rate could hit parity by the end of the year. Less Sangria all round.
Why is this happening?
In a nut shell, the suits in the city believe that the UK economy is in a far more vulnerable position than that of France and Germany. In fact some would go as far as to say the UK has the same risk of following the US into a possible recession and severe housing market correction.
So the markets are now betting that the UK interest rate will need to be cut quite aggressively to get the economy, housing market and overall feelgood factor back on track. After all, we’re a nation of consumers.
That means the euro is looking an increasingly better investment than the pound.
This, unfortunately, means increasingly expensive holidays join the list of rising mortgage, council tax, gas and electricity bills.
Why not brush up your green credentials and stay at home? I hear Bognor Regis is lovely at this time of year…
Good idea a Bogner Beach Hut for the summer, you won't be able to buy one because you can't get a mortgage but you can rent them.
Cape Town South Africa is a great holiday destination, you will get lot's of "lolly" for your pounds in Cape Town, and there's lots to do, mountains, beaches, shopping, fantastic restuarants and the superb wine tasting.
Just heard on Sky that the UK will be hardest hit by this credit crunch, maybe a summer in your own back garden will be on the cards in Britain.
Another rate cut likely today by BOE, a great deal of good luck and belt tightening is going to be needed to come out on the other side of this crisis in one piece.
Posted by: Elizabeth Davies Cape Town 10 Apr 2008 06:17:11
we have booked up for bognor already cheer yourselfs up we cannot keep carrying scroungers immigrants without something giving welcome to butlins
Posted by: victor leach erith 9 Apr 2008 20:01:34
Sir
Insofar as the $ or the £ v the Euro the fact of the matter is that when house prices go down, local councils do not reduce council tax liability as they are leaglla obliged to by virtue of the Local Government Finance Act 1992.
So, whilst the EU zone plays by the books, it appears that the doom and glooom that has ben created within the vicinity of Bognor Regis has been created by further virtue of the fact that by the time the poor householder gets his act together, manipulation of the valuation tribunal would have taken place and hey presto, [Ace Of Base]. However, rest assured, you can get it back so long as you put in your claim before the expiration of 6 years. And there me thinking its gonna be a [Cruel Summer]
Holiday, here I come!
Posted by: Khalid 9 Apr 2008 15:45:15