Brits Panic Over Credit Crisis

UK is extra vulnerable to the credit crunch
By Sam Gale Rosen,  Newser Staff
Posted Sep 16, 2007 11:17 AM CDT
Hundreds of Northern Rock bank customers queue outside the Leeds Branch, England, Saturday, Sept. 15, 2007. Customers lined up outside branches of the British mortgage bank for a second day on Saturday...   (Associated Press)
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(Newser) – The US credit crisis is sending Britain's buy-now-pay-later economy into apoplexy, with Brits lining up by the thousands outside branches of troubled bank Northern Rock to withdraw their savings in spite of an unprecedented government bailout. Analysts say that the nation's borrowing habits leave the economy vulnerable. "I think we are at tipping point," one consultant tells the Guardian.

A researcher says that the subprime fallout is likely to affect many areas of the British economy, including housing. As the Fed prepares to cut US interest rates by up to .5%, Britain also is likely to have to make two rate cuts before year's end. "It's taken a good year for the impact of higher rates to reach London but, finally, the whole market's feeling the pain," says the researcher.