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Pastimes : The Hot Button Questions:- Money, Banks, & the Economy
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To: maceng2 who wrote (642)9/25/2004 12:26:44 PM
From: maceng2  Read Replies (1) of 1417
 
'Debt Chickens' Come Home To Roost

ananova.com

Consumers' confidence in the economy has fallen as their "debt chickens" come home to roost, financial services group Ernst & Young said.

The two hikes in interest rates during the second quarter of the year has created a dip in people's confidence as the housing market begins to slow.

The group's Retail Financial Services Monitor said there were signs that people were beginning to retrench and reduce their spending.

It said homeowners no longer felt so confident that rising house prices would offset their unsecured debts.

However, it stressed that it was not predicting a property price crash.

Iinstead expected a gradual deceleration in growth and a rebalancing of house prices relative to incomes.

The report said: "For much of this year we have been bearish on prospects for consumer debt markets and now the air resounds with the fluttering wings of roosting chickens.

"It is becoming clear that the booms in the housing market and the consumer credit market are over and with it the feel good factor for the majority of consumers.

"The good news is that... we do not anticipate a market crash, rather a steady deceleration in house prices."
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