credit crunch

AS FAR as the French housing market is concerned, this article in today's UK Guardian very nicely summarises a lot of the news on the french property market and economic factors that influence it that we've been telling our readers about in recent weeks.

The article also takes a look at the the markets in Germany, Italy, Spain and Ireland.

More and more people are now looking towards France and particulary investment in French property as a way of spreading their assets and minimising financial risk.

In a recent blog post we talked about the Bank of England's gloomy forecast for the British economy over the coming 18 months.

But entrerprising Brits have come up with a solution and, at the same time, coined a new acronym.

THE Governor of the Bank of England, Mervyn King, yesterday announced that UK inflation is set to worsen. He almost seemed shocked by the gravity of his words in admitting that the outlook for UK inflation has "deteriorated markedly."

Consumer inflation is at its highest in 13 months as a result of higher food and energy prices.

These external factors, of course, affect economies globally but Mr. King says, about the UK specifically, that "the central projection is for growth to slow sharply in the near term".

Sterling sank to new lows against the euro this morning, hitting a record low further beyond the 80p mark as investors weighed expectations for a UK interest rate cut against steadier euro zone monetary policy.
Surrounded by poor economic data and fallout from the well documented global credit crunch, the B of E is expected to put rising inflation pressures to one side at 12:00pm and opt for a 25 basis point
rate cut from 5.25%.

THERE are several articles in the press today reporting that France has managed to avoid the credit crunch. French banks have not changed their lending behaviour compared with recent overhauls in the UK, Spanish and Irish institutions.

Other reasons given are that french property prices start much lower than the UK. But people have the same purchasing power in France as the UK.

And finally, President Sarkozy's new tax breaks offer interest relief on morgages  in an effort to make ownership more attractive to the french.