The night-walkers of Uganda

Key words and phrases
2
Credit crunch:
A shortage of available loans. This could simply mean a rise in interest rates, but 
it often means that some borrowers cannot get loans at all.
328

---

The week the crisis hit home
Graeme Wearden
April 3, 2008 
Introduction
Mortgage rates increase as banks remove their 
deals! Millions face nightmare of negative equity! 
US recession a possibility, says top banker!
Recently, the British people have been hearing 
and reading a lot of bad news about the current 
financial crisis; and the financial future does not 
look good. 
People are borrowing more and more money. 
Economists warn that many of them could be 
heading for financial disaster.
Federal Reserve chairman Ben Bernanke also 
warned that the US could fall into a recession, 
which is bad news for the world economy.
Credit 
The Bank of England has reported that consumer 
borrowing is growing at its fastest rate for five 
years. The amount of money lent via loans, 
overdrafts and credit cards jumped by £2.35 
billion in February.
Economists worry that many people are 
borrowing money to pay for essential costs such 
as the monthly mortgage bill. A similar situation 
happened across the Atlantic last year when the 
US economy began to have problems.
Mortgages
The news about mortgages is getting worse day 
by day, and banks are pulling hundreds of deals 
every week. One of the reasons for the problem 
is the credit crunch, which has forced banks to 
keep their cash and not lend money to everyone.
Bank of England figures show that the amount of 
new mortgages has dropped to 73,000 a month; 
half as many as a year ago. 
The average rate on a two-year fixed-rate 
mortgage has increased from 6.15% to 6.29% 
over the last two weeks. This means that people 
who have a £150,000 mortgage now have to pay 
£160 more a year.