US vote may worsen credit crunch
The credit crunch has been predicted to continue and possibly worsen following the decision of the US Congress to vote against a federal government plan to bail out lenders who got into trouble in the sub-prime market.
A proposal to spend $700 billion (£380 billion) of taxpayer's money to buy up bad mortgages from US banks to protect against a meltdown in the industry was voted down by Congress last night.
By the end of the day the Dow Jones index of leading companies on the US stock exchange had plummeted 777 points as expectations grew of a further US economic downturn.
The knock-on effects of the crisis could harm other economies and banking sectors, including Britain's, something that could further restrict the availability of mortgages for anyone looking to buy in London.
As a result, now may be a good time to rent instead.
Prime Minister Gordon Brown said last night the Congress vote was "disappointing" and said he would do all he could with chancellor Alistair Darling and Bank of England governor Mervyn King to help the situation in Britain.
Published 30th September, 2008
© 2008 Estates IT Limited
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The credit crunch has been predicted to continue and possibly worsen following the decision of the US Congress to vote against a federal government plan to bail out lenders who got into trouble in the sub-prime market.