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- Lehman Brothers Fails and Merrill Lynch Is Taken Over
- Brown Under Pressure To Boost UK Mortgage Market
- Bail-out Of US Banks Boosts Markets
- Stamp Duty Benefits Questioned
- Stamp Duty Holiday Arrives
- Helping Hand For First-time Buyers And Struggling Home Owners
- Recession Looms Says Economist
- Help Urged For First-Time Buyers
- Inflation Below One Per Cent In 2009
- Recession Looms For Britain And Europe
Lehman Brothers has filed for bankruptcy in the US, and Merrill Lynch is being taken over by Bank of America after a weekend of upheaval in the US. Stock Markets suffered on Monday as a result.
The US Government’s action to bail out Freddie Mac and Fannie Mae banks has left the UK Government exposed to pressure to take action too. A scheme is being considered which could put mortgages on the books of the Bank of England, making the UK taxpayer responsible.
The announcement by the US Government that it is to effectively nationalise Fannie Mae and Freddie Mac has boosted stock markets around the world. Asian markets and London’s FTSE 100 have all seen more than 3% rises so far.
Doubt has been cast over the benefits of increasing the stamp duty bracket from £125,000 to £175,000, which was announced by Gordon Brown yesterday. Experts state that a massive increase in house purchases needs to occur in order for taxpayers to achieve the savings of £600 million that has been forecast.
The Government has announced that the starting threshold for stamp duty will be temporarily increased to £175,000. The measure comes into force on 4 September. It is said to be to help individual families in these difficult times.
Brown will attempt to win back opinion polls by unveiling a scheme that provides immediate action for those worst hit by the economic downturn. His positive outlook for the future is in stark contrast to Alistair Darling’s recent analysis of the British economy and is likely to divide the party even further.
With Britain’s GDP growth now at zero, Capital Economics is forecasting a recession this year and next. The Treasury takes a more optimistic viewpoint. Inflation is set to come down in 2009.
The New Homes Marketing Board has asked the government to initiate a tax-free savings scheme with bonuses to help first-time buyers cover deposits, stamp duty, legal and removal fees. Such a scheme, it says, will help boost the mortgage market, and encourage people back into savings habits.
It may seem unlikely now as inflation has just reached 4.4%, but leading economists are forecasting inflation of one per cent in 2009. This is because the current figures are influenced by rising oil prices, but next year they will be replaced by the now falling price of oil.
Both Britain and Europe are facing recession as Bank of England Governor and European economists warn of difficult times ahead. Projections are now for economies to shrink and many in the Euro zone are already doing so.
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