An interesting comment in the Independent today, in a story that kicks off with Marks & Spencers'
dreadful Christmas sales;

David Kern, economic adviser to the British Chambers of Commerce, said: "Given the threats to the banking system and to the smooth flow of credit, we believe waiting would be a mistake."

Now let's think this through from another perspective.

The interest rest rewards risk. You would naturally charge a sub-prime lender a higher rate than a prime lender; the difference is your reward for taking the risk.

There is vastly increased risk in the market. The threats to the banking system, sub prime fallout, and projected reductions in collateral (if property prices fall) are all increased risks. Never mind the possibility of recession.

So as a lender, why on earth would I be reducing rates? Wouldn't I rather be putting them up?

And indeed we have seen banks tending to cut the rates they pay savers while keeping their interest rates for mortgage lenders stable. On one level that's just another of the banks' ploys for grabbing money off the consumer - taking back what they've lost on unfair charging for overdrafts - but on another level, that's the banks recognising the risk and taking their own decisions about what risk/reward ratio they're willing to accept.

So - interest rates to go down? I'm not so sure.

Estate agents start to crack

LSL isn't waiting for the housing market to crash before closing branches and laying off staff. It's doing it now - after just a couple of months of small decreases in the house price index.

Of course it's volume rather than prices that makes estate agents money. And the volume of transactions does seem to have been drying up.

The last couple of years have seen estate agents investing in new branches and equally in setting up new divisions. I've just been researching the sector for one of the trade publications and it's interesting to see how many estate agents have set up a new homes business in the last couple of years, or moved into lettings agency - obviously driven by demand from buy to let landlords. New branches in property 'hot spots' will be the first to go - particularly those, I'd guess, with a lot of one bedroom city centre flats on the books.

But I wonder whether any of these branches will ever re-open? The other trend I noticed was for agents to move off the High Street. New breeds of agency are phone based or internet based,and even 'traditional' agencies like Keith Pattinson are advertising for home-based agents to telework besides the existing branch structure. I wouldn't mind betting that the more innovative agents are going to establish themselves very nicely with their low cost structures by the time we see a pick-up - and if they've done well out of fleeing the High Street, will they ever want to come back?