Australia at risk from US sub-prime fallout

Analysis of the effects of the US sub-prime mortgage sector problems by The Economist Intelligence Unit has found that there is a 30 per cent chance of the US falling into a recession, and that Australia is one of three countries most at risk of following the US into a recession. The research says that the most serious fallout from the crisis is the repricing of risk and, for any given level of risk, financing will be more expensive and will be rationed. The report also says that affordability in Australia could be strained for all house owners as a result of high interest charges, already among the highest in the world, and which may rise.

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