Has the economy turned?

Has the economy turned?
One swallow does not make a summer. But we have now had a veritable flight of the passerine birds, writes Harry Wallop.

By Harry Wallop, Consumer Affairs Editor
Last Updated: 3:11PM BST 02 Apr 2009

After 18 months of relentlessly falling house prices, the most severe financial crisis since the 1930s and the start of what is shaping up to be a brutal recession, a few green shoots have poked their heads out of the ground.

A blip? Probably, but the figures come just a few days after the Bank of England said mortgage approvals had jumped during February.

Estate Agents have been saying for months that buyers have started to come back through their doors. It's just that they don't have any funding to buy a property.

Well, maybe it's the spring weather – or maybe it's the billions of pounds of taxpayer money pumped into the system finally filtering through to consumers – but mortgage companies have started to trim their rates.

There are now a number of deals for under 3 per cent. Okay, this is six times the Bank Rate, and you will still need a big deposit to get the loan, but money is available for many people who need it, and at far cheaper rates than six months ago.

To cap it all, the FTSE 100 has climbed back above 4,000 for the first time since February.

The problem is it is sometimes difficult to tell, at this time of year, whether the shoots are your first spring peas, or a new, virulent weed.

Decisions made by consumers last year are only now hitting businesses. Job losses will continue to mount, which in turn will lead to repossessions and lower house prices.

And the tens of thousands of jobs that have been announced every week this year – even if they stopped today – will continue to cause repercussions for a good 12 months to come.

Yes, the bad news has become less relentless, but the best that can really be hoped for is that we have hit the bottom. Not that things are improving.

http://www.telegraph.co.uk/comment/5094693/Has-the-economy-turned.html

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