Tees stays optimistic
IS the end of the credit crunch in sight or is Teesside in the middle of a prolonged economic slump?
Last week the Governor of the Bank of England, Mervyn King, warned that the era of “nice” era of non-inflationary consistent expansion is over, while chairman of the European Central Bank (ECB), Jean-Claude Trichet, said Europe was in the middle of “a very serious, ongoing market correction”.
But is the outlook more optimistic on Teesside, which has been protected better than other areas from the worst effects of the US financial crises? Tees house prices, for example, were more sensibly valued at the peak than those in the south and have not been subject to the same fluctuations.
Anthony Platts, divisional director at accountant Brewin Dolphin’s Teesside office, said the worst of the credit crunch appeared to be over.
He said: “Credit markets are opening up again and the spread between low risk and high risk credit has been falling”.
John Wright, Tees Valley-based chairman of the Federation of Small Businesses (FSB), warned that Teesside was “not quite over” the effects of the credit crunch but was reasonably optimistic about the future.
He said: “We can easily talk ourselves into a crisis. During the next six months we will come out of it”.
Consumers and businesses have been hit badly in recent months by spiraling food, fuel and energy prices and many are calling for the Bank of England to reduce interest rates further to ease the pressure. But the Bank faces a delicate balancing act of keeping the lid on inflation and ensuring rates are low enough to boost confidence and stimulate activity in the markets.
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