Pendragon, the UK car dealership, has reported used car sales are up 2% on this time last year, although new car sales are down 4%. The 2% increase means that Pendragon expects full year results to come in towards the top end of analysts expectations. The credit crunch and falling house prices have not yet had a knock on effect to the care market, however it is unclear whether this will carry through the rest of the year. Therefore future trading conditions are said to be uncertain.

The Bank of England (BoE) has today cut interest rates by o.25% to 5%, the third 25 basis point cut since December 2007. The move comes as the Bank looks to mitigate the impact of the credit crunch and the slowndown in the property sector.

Many of the big lenders have already stated that they will pass on the rate cut in full by reducing their standard variable rates (SVR). Whilst this is great news for those with mortgages linked to the SVR or the Bank of England base rate, it does not paint the full picture. (more…)

HSBC has written-down £8.7bn due to the size of its exposure to US markets and the decline in the US housing markets and hence the value of its loans. The credit crunch leaves HSBC cautious in its outlook for 2008 and believes the situation could get worse before it gets better.

 Despite the level of write-downs HSBC, the UK’s largest bank saw its profits rise by 10% to £12.2bn. The fundamentals of HSBC remain strong and to send a positive message to the market it has increased dividend payments to shareholders by 11%.

The G7 group of nations has warned of a further downturn in the global economy following on from the credit crunch. Each country believes they will be affected by the slowdown to some degree however, are urging that they all work together to overcome the crisis.

The continuing risks are borne from further problems for the US housing market and possible recession, tighter credit control by lenders, higher energy prices and rising inflation.

“Going forward, we will continue to watch developments closely and continue to take appropriate actions, individually and collectively, in order to secure stability and growth in our economies,” they said.

The Council of Mortgage Lenders has reported that the number of repossessions has risen by 27,100 (27%) during 2007, the highest since 1999, although much lower than figures seen in the early nineties which peaked at around 80,000.

The credit crunch is seen as a reason for the increase as lenders tighten their acceptance criteria, particularly for those already in the higher risk category. Increased utility, food and petrol bills will have added to the woes. The quarter point interest rate cut yesterday was too little, too late for these people.