UK mortgages up, consumer confidence down

The UK economy is seemingly struggling in a period where the housing market is fragile and consumer confidence at its lowest rate in eight years.

Alan Clarke, an economist at BNP Paribas in London, described the situation as “doom and gloom” as the UK is flirting with recession.

The Bank of England said yesterday that the rate on a home loan fixed for two years rose to 6.63 percent in June, which is the highest rate since the beginning of 2000.

According to the Nationwide Building Society’s index of consumer sentiment, consumer confidence dropped to the lowest level since the survey began as well as the highest percentage point increase since 2003.

The fact that the sterling has fallen against the euro is a further sign of how the UK economy is struggling.

With tumbling house prices, running oil prices, strict lending rules, mortgage fees and rates are not reflecting the Bank of England’s three interest-rate cuts. It seems as though an increase in rates may be on the cards as inflation has now accelerated to 3.3 percent which is the fastest pace for nearly ten years.

Furthermore, a survey from the British Chambers of Commerce has revealed a sharp deterioration in business conditions, with business confidence, employment and activity in the services sector falling to their lowest level for nearly 20 years.

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