The Economy Gathering Storm Clouds...
- Increasing levels of consumer debt --> Personal debt higher than GDP in UK 2004, debt rising as proportion of income, mortgage accounts for 80% of debt.
But this debt was loosely regulated...
- Increased availability of credit, internationalisation and competitiveness in credit markets, social acceptance of high levels of debt
House Price Explosion
House prices have risen in the UK since records began (with falls, followed by recovery)...Various coutnries have had diffrent patterns but most had a significant rise in the 80/90s - a fall then rising steadily until the 2008 recession.
- Different areas in the UK have different prices, such as NE vs London.
House Price Inflation -
- Mortgages as a proportion of income and personal debt have also risen
- Enabled by less strict lending practices, this has included loans to 'sub-prime' borrowers
- Increasing concerns about the value of this debt and the long-term security of repayments
- Concerns over sub prime loans (high risk)
- Much has been sold into international markets
- Lack of information on the location of this debt and exposure of financial institutions
- Leading to a restriction in levels of inter-bank lending
- How did we not see the 2008 crisis coming? Who can we trust? The role of the state in the economy? Has the economy recovered?
All economic activity is inherently spatial …
… even the placeless, fluid and international world of global finance is produced in places and impacts in our everyday lives
Geography offers a strong interpretive lens …
- Understanding spatial variability and challenging ‘global’ interpretations of events
The economy as an ‘out there’, global process …
- But one that has strong links to ‘in here’ – localities and individuals as economic actors and subjects