Credit crunch is easing off, says expert

The credit crunch is starting to ease off as more funding becomes available, an economist has said.

Melissa Kidd of economic forecasting body Lombard Street Research observed that there has “definitely” been an improvement in conditions since the crisis reached its worst point last autumn, when the financial system nearly collapsed.

At the same time, there is a “long way to go” before conditions in the financial sector are back to normal, she warned.

“That will take quite a while and require the continued policy intervention for the next few quarters,” Ms Kidd concluded.

Such a situation may make it easier for borrowers to get better products to help with their debt management.

The start of the credit crunch has been traced to the decision on August 9th 2007 by French Bank BNP Paribas to block access to three investment funds that were linked to the US subprime market.

Shortly after this the first signs of the crunch in Britain emerged as the Bank of England intervened to rescue Northern Rock.

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