Equity markets fluctuated violently on Friday, with Europe and London experiencing their worst fall in four years - as the US federal reserve and other central banks scrambled to avert a liquidity crunch.
Put simply this all boils down to over lending in the US market, where usually mortgages and high value loans aren’t lent to people of adverse credit risk, however of recent this simply hasn’t been the case, the same has been true in the UK. When repayments can’t be met the lenders effectively sell their debt, the debt has now spiralled to such a level it is being propped up by Federal reserves and central banks as mentioned above.
Now I don’t want to panic people in the UK and warn them that we are about to hit a recession but these are very shocking signals, so don’t overspend or overborrow as you could find yourself needing to find an extra part time job in order to make ends meet!
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