Credit gloom could go on for another eighteen months

Dubbed the Golden Boy of Banking, the HBOS Chief Executive Andrew Hornby has recently spoken out about the ongoing credit problems facing the UK, and has stated that due to the housing slump in the United States the gloom could continue in the UK for another eighteen months or longer.

The forty one year old said that there is not much that the government can do to boost the economy when the housing market in the United States remains so subdued. He added that confidence levels could remain low until 2010, and lenders may feel wary about lending money for another eighteen months or so.

In the recent interview Hornby stated: ‘It is going to be 18 months before US house prices have started to rise again, which is what is required for banks to have the confidence to start lending again. It will take a long time to play out.’

Further gloomy predictions have been made by a number of industry agencies recently, with many now predicting that by the end of this year the UK’s economy will have fallen into recession having already experienced a quarter of zero growth. It is likely that the next two quarters will show negative growth, which technically means that the country will have gone into recession.