As the government dithers over what to do to restart the mortgage market (which in turn underpins the housing market and the rest of the economy), the Bank of England stated that mortgage approvals fell by 68.4% to a record low in the year to June.
Mortgage approvals have fallen from 41,000 in May to 36,000 in June. The rate of mortgage approvals was the lowest since records began in 1993.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, is quoted in The Times:
"The latest numbers from the Bank of England demonstrate, in the clearest possible way, the consequences of the credit crunch for the residential property market.
Against this backdrop, it is not surprising that the high street appears under increasing pressure with consumers scaling back purchases of a range of household goods.
Unless the authorities take steps to restart the mortgage market, the likelihood is that there will be more bad news in store for the housing market and the retail sector during the latter part of the year."
The government is inextricably linked in the voters' minds to this meltdown, as Brown has for the last ten years promised "no more boom or bust". Surely that would be enough incentive for the government to try to do something?
Regrettably, the current dithering and inaction would indicate not!
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