‘General’ News
Bank cuts rate to 5%
Posted 2008-04-9
The Bank of England has cut the base rate of borrowing to five per cent, as widely expected.Analysts say the Monetary Policy Committee (MPC) that is tasked with setting the base rate is responding to concerns over the credit crunch, particularly in relation to the mortgage market.But inflation remains its number one concern and pundits have questioned whether another rate cut is viable in the short-term.Concerns have also been raised about whether or not lenders are planning to pass on the rate reduction to mortgage borrowers.Adrian Coles, director-general of the Building Societies Association, cautioned: "The MPCs rate decision may not be reflected by changes to the money market rates. Therefore the quarter point reduction will not necessarily be reflected in the fixed rates on offer straight away."He added that the rate cut would go some way to boosting consumer confidence, but said the bottleneck in global money markets would remain.According to the Council of Mortgage Lenders, repayments on a variable rate mortgage of £150,000 should fall by about £23 after a 0.25 per cent rate cut....
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Brits fork out to appear as wealthy as peers
Posted 2008-04-9
Britons are prepared to spend beyond their means in order to appear well-off, according to a new study. Research, conducted by CreditExpert.co.u...
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Consumer confidence heads south
Posted 2008-04-8
The latest Nationwide consumer confidence index has shown Brits are growing increasingly uneasy about the state of the economy.According to the figures released for March, consumer confidence has now reached its lowest level since the building society started keeping records some four years ago.Only 14 per cent of Brits expect the economy will improve over the coming six months, with a majority (62 per cent) saying future employment levels are not positive."The downturn in consumer confidence over the last six months is not surprising given developments in the financial markets and a weakening housing market," commented nationwide chief economist Fionnuala Earley."The effect of recent interest rate cuts has yet to trickle through to peoples pockets, particularly as food and energy costs are still high. "Consumers may begin to feel more comfortable following the expected cut to rates this week, but it is unlikely that confidence levels will increase in the short term."Further adding to the gloom, Halifax yesterday revealed that house prices have begun falling at their fastest rate in 16 years....
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SOS call from IMF over crunch
Posted 2008-04-6
The International Monetary Fund (IMF) has issued its harshest warning yet over the potential fallout of the global credit crunch.IMF chief Dominique Strauss-Kahn told the Financial Times that the need for public intervention was "becoming more evident" if governments wished to successfully weather the downturn.Aside from pumping liquidity into the markets, the head of the global body said authorities appeared to have done little to intervene in financial systems - offering assistance only in the extreme case of Northern Rock.Furthermore, Mr Strauss-Kahn expressed his disappointment that the securities and housing sector has received scant support.Justin Urquhart Stewart of Seven Investment Management backed up the assessment, arguing that more co-ordinated and effective work between governments was necessary to ensure the buoyancy of the markets."Weve gone from the idea of the banks just providing access to extra cash, to intervening on odd occasions, then to the final line when were actually saying were going to have to stand behind this and formally intervene overall in the market to support it," he told the BBC. "Rather than just waiting for individual banks to go wrong the weaker banks will need further help and its going to be more than just access to liquidity." ...
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MoneySupermarket trumps ISAs
Posted 2008-04-6
With the weekend ushering in a new era for Individual Savings Accounts (ISAs), MoneySupermarket.com has said there has never been a better time to open one of the accounts.The tax-free allowance on such accounts has now risen by up to 20 per cent - allowing annual Cash ISA savings of up to £3,600 each year.And with the top-paying ISA coming in at 6.5 per cent AER, Kevin Mountford, head of savings at price comparison website, said the traditional March rush for ISAs may be followed up by an April stampede as latecomers catch on to how much more they could be earning."Up to 80 per cent of ISAs are opened in the six weeks before the end of the tax year, but there are lucrative opportunities right now for early birds," he said. "Rates on cash ISAs are, on average, one per cent higher than this time last year and with market conditions being so strong for savers, there may have never been a better time to invest."Mr Mountford singled out the two top-earning ISAs as being the Barclays Tax Haven ISA (6.5 per cent AER) and the Scarborough BS Notice Mini Cash ISA (6.3 per cent AER). ...
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Fool.co.uk: Think hard before taking out a loan
Posted 2008-04-2
The current economic climate means that now is probably not the best time to take out a loan, Fool.co.uk has stated.According to the head of personal finance at the website, interest rates have increased "across the board" and borrowers of all loans - big or small - can expect to feel the pinch."There are no immediate signs of easing in the credit market," asserted David Kuo, head of personal finance at the website."Apart from the withdrawal of loan products, average interest rates on personal loans have increased across the board too. This has affected the cost of small, medium and large loans with the cost of smaller loans being disproportionately affected."He noted that the on average an individual who borrowed £1,000 over the course of three years could expect to pay £80 more on their loan then they would have one year ago.According to recent research by Moneyfacts, personal rate loans have increased by 1.7 per cent over the past year....
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Kids get taste of economic downturn
Posted 2008-04-1
The economic downturn has left the majority of British parents planning to spend less on their children, new research has suggested.Fears of a recession have reportedly left 56 per cent of parents saying they will be cutting back on holidays, day trips, toys and other luxuries that their kids might normally hope to enjoy.Furthermore, a whopping 44 per cent of parents with children under 18 say they are already struggling to make ends meet.Karl Elliott, 3GB spokesperson for engage Mutual Assurance, said that a multitude of economic factors were combining to bear down on personal finances and that everyone in the pecking order would feel the pinch."With the increased cost of food, fuel and mortgages taking effect, our research shows that many parents anticipate finding it increasingly difficult to make ends meet in the year ahead," he said."However, we encourage parents to continue saving little and often for their childrens future even if it is just £5 each month."...
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Debt tops list of young people’s anxieties
Posted 2008-04-1
You might think fears about the environment and terrorism are weighing heavy on the minds of the nations youth - but according to one new survey young Brits are more worried about debt.The Youth Future Fears UK survey, conducted by Ipsos MORI and commissioned by UK volunteering charity CSV and Tesco, found that 48 per cent of all 16 to 25-year-olds rate debt as one of their biggest fears.That compares with 40 per cent worrying about unemployment, 38 per cent losing sleep over violence crime, and a green 30 per cent placing the global warming top of their list of concerns.Commenting on the findings, Sue Farrington from the CSV-backed youth volunteering campaign Agents4Change said: "Young people have genuine fears for the future but they are not powerless to overcome them."They can help keep our streets safer by mentoring young people at risk of offending, give advice on managing debt by volunteering to teach budgeting and financial skills and help combat global warming by taking part in recycling or conservation projects."Recent statistics from the Student Loans Company have shown that average student debts more than doubled between 1999 and 2007....
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Lenders ‘running scared’ of credit crunch
Posted 2008-03-31
Consumers are facing higher interest rates on small, unsecured personal loans due to market jitters over the credit crunch, it has been suggested.Financial website needanadviser.com said that lenders were responding to the bottleneck in global money markets by jacking up interest rates on some of their riskier products, such as unsecured loans."The trend is for lenders to put their rates up so it makes it worth while for them," said needanadviser.com director Jo Roberts. "This is all the result of the credit problems going on in the world at the moment."The US sub-prime crash which ushered in the current credit crunch had its roots in irresponsible lending and Mr Roberts explained that lenders were now much warier about allowing people to overextend themselves.She added, however, that not all financial products have been equally affected, emphasising: "We have not seen such a large [rate] rise in secured loans because lenders are now looking to get their money back."Assessing the wider market, Ms Roberts concluded: "There is a lot of knee jerk reaction going on - but it will settle down. It always does."...
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Budgeting the ‘obvious’ solution to debt woes
Posted 2008-03-30
Spending within your means by calculating and adhering to a realistic budget is the simple way to avoid falling foul of debt, one industry expert has said. James Falla, director of debt counselling service Thomas Charles & Co, said that learning how to budget "isnt rocket science" and he urged more Brits to take responsibility for their own actions. ...