Is The UK Economy About To Take Another Nosedive?

Britain has been on something of an economic roller coaster in recent years. The UK’s economy has been turbulent at best. And it’s been responsible for the demise of many well-known and high-profile brands.

In general, things seem to be looking up for the economy. Despite the negative press, there is economic growth in many areas such as properties. But, some fear the apple is about to fall from the tree, as it were. Plenty of people predict that the UK is about to have another economic nosedive quite soon.

If that’s the case, what are the warning signs? In today’s article, I will explain some of the reasons given by some financial experts.

People aren’t getting told the whole truth

Quite often we base our investment decisions on market research and news. Although that’s a wise way of investing, it can sometimes be a deceiving one too. That’s because the mainstream news sometimes doesn’t report on significant financial downturns.

One of the reasons for last decade’s global economic downturn was secrecy. The movers and shakers of the financial world kept a lot of information secret. As a result, this spelt disaster for thousands of investors and others.

The http://www.davidicke.com/ website is just one of many Web outlets that hypothesize on that. Most people know the “powers that be” tend not to disclose certain information to the public. That’s because they want to manipulate trading conditions in their favour first. As you can imagine, that seldom ends well for all concerned.

There is too much reliance on China

China Economy

It’s plain to see that people in the UK rely on Chinese imports. Electronics, components, even cars all get made in the region. Recent financial events in China had a bad impact on Britain’s stock markets last month.

Some financial analysts say the Chinese are deliberately lowering the value of the Yuan. They claim this is to encourage more spending in the country. If Brits spend too much money in China, this could become a catastrophe for many domestic firms.

A rise in interest rates could cause a property crash

The Bank of England, or rather the Chancellor, is considering a rise in interest rates. Believe it or not, this could trigger a property market crash in the United Kingdom.

Many people remortgage their homes. If a lot of homes get put up for sale, it’s likely sale prices won’t cover mortgage debts. That is because mortgages will cost more to have because of higher interest rates. Also, the value of properties is likely to drop at the same time.

To put it another way, think of the laws of supply and demand. If there is more supply than demand, prices will go down. The opposite won’t happen if interest rates get put up. Check out http://www.investopedia.com/ for more details on these basic economic facts.

Conclusion

Many financial analysts worry about the impending economic crash in the UK. But, how likely is it that it will happen soon? Only time will tell. Sadly, no-one has a crystal ball that can predict the future!

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