Economists take stock on credit crunch anniversary

Economists predicting recession to hit later this year or early next, with next instalment of crunch involving downward adjustment to living standards

One year on from the start of the credit crunch, analysts are convinced the UK will be hit by a recession this year or early next. According to RLAM economist Ian Kernohan, the next instalment involves a downward adjustment to living standards that will accompany consumer de-leveraging. He said total worldwide corporate write-downs and credit losses have surpassed the $500bn mark, but the full extent of sub-prime losses is still unknown. "We expect more losses to emerge in the financial system as a result of the collapse of the US sub-prime mortgage market," Kernohan added. "I belie...