Credit crunch ‘to hit consumers severely’

19 September 2008

The ongoing credit crunch has “potentially severe implications” for consumers, a financial expert has said.

Financial Services Authority (FSA) Chief Executive, Hector Sants, said that although financial markets are not at their lowest, he felt they are not far off.

“Market confidence will only return when investors believe they know where the bottom is,” he said.

The credit crunch has been responsible for a serious shortage in funds for loans, mortgages and other forms of credit in the past year. Loans have become, in general, more difficult to obtain and more expensive.

A Think Money spokesperson said: “Consumer and lender confidence has played a large part in the credit crunch, and it will continue to do so. “The extension of the Bank of England’s Special Liquidity Scheme is aimed at increasing confidence amongst lenders, and we hope to see some improvement in the loan and mortgage markets as a result.”

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