Credit crunch (part 4?) hits United Kingdom.

The financial bigwigs are not sure when the credit crunch will be over but there are fears concerning the British consumer if the tap of easy credit is turned off.
The Daily Telegraph's Jeff Randall had a programme last night on ITV, which he plugged in yesterday's article "Debt juggernaut rolls us into madhouse". Randall
said there could be serious problems for house buyers, who used 100 per cent
mortgages.

The journalist said the banks were partially to blame, showering cheap money on customers, when interest rates hit very low levels between 2003 and 2004.
He noted the increase in credit card bad debts, which rose from the 2002 figure of
£1.1bn to £2.8bn in 2006 (with the assumption of worse to come). However, the
customers have to take the blame, when they abandoned personal responsibility.

Credit crunch?

In the UK the banks have been racking up bad debts on credit card lending. Easy credit was extended because it was so profitable. The banks have called for borrowers to
be responsible and actually pay the money back. It is surprising how difficult this
has been given the levels of record employment in the UK economy. For instance,
HSBC lifted its British unsecured bad debt charge by 5 pct to £380m
for its 2007 interim results. Obviously, future growth in the British economy will be
affected if the banks cut down their lending in this area.