Interest rates unlikely to increase this year

A recent poll has suggested that the base interest rate is unlikely to be increased over the course of this year, which is something that will bring relief to many homeowners and borrowers who are already struggling to make ends meet due to soaring costs and bills. The data comes from the latest Reuters poll of economists, which reveal that there is now only a 30 percent chance that the Monetary Policy Committee will increase the base rate from its current record low of just 0.5 percent where it has been for well over two years.

However, economists are predicting that there will be a base rate increase in the first quarter of next year although some believe that the next rate hike could be at least one year away, perhaps even longer. One industry official welcomed the news of the unlikelihood of a rate rise, stating that there were many households and individuals that would not be able to cope with a rate increase in the current climate due to overstretched finances, soaring living costs and rocketing bills.

He said: “Given that many people in the UK are currently struggling to make ends meet, an interest rate rise which will push up mortgage payments will cause a huge increase in families facing financial difficulty. The longer that interest rates are left unchanged the better from a personal debt point of view.”

The MPC has faced a difficult decision over recent months when it comes to increase interest rates, as members have been under pressure to vote for an increase due to soaring inflation levels but have also been under pressure to keep the rate on hold because of the concerns about the economy and affordability.

Tags: committee, quarter, reuters poll, something, mortgage

Officials say mortgage interest rates must stay low

Earlier this month the Bank of England announced once again that the base interest rate was to stay at its all time low level of just 0.5 percent, where it has stood since the first quarter of 2008. This is the lowest level in the history of the central bank, which spans over three centuries. For many borrowers and homeowners this low rate has come as a relief, as it has kept down their repayments.

Economist from the Ernst & Young ITEM Club have now said that it is important that interest rates remain at this low level over the course of this year, despite the fact that inflation is spiralling out of control. Officials said that there is a very tough year ahead, but although many believe that interest rate will and should increase economist from Ernst & Young said that they needed to stay on hold.

The report that was released by the economists indicated that this year was going to be a gloomy, tough, and very challenging one, with inflation possibly rising to 4 percent as early as February. House prices are set to fall by 5 percent over the course of this year, according to the report, and only slight improvement is expected in 2012.

One economist from the Ernst & Young ITEM Club said: ‘It’s going to be a tense start to 2011. The fiscal retrenchment will keep GDP subdued while commodity price rises and the VAT hike will push inflation close to 4% and leave the MPC agonising over whether to increase the Bank base rate. However, it’s vital that the MPC stands firm. A premature rate rise would boost the pound, weakening the UK’s ability to increase its exports – particularly into the emerging markets – which we have long maintained hold the key to the UK’s economic recovery.’

Tags: relief, improvement, gdp, lowest level, slight improvement, mortgage, course

Will the mortgage market ease next year?

Over recent months there have been mixed reports and opinions with regards to whether the mortgage market in the UK is likely to ease up next year, and whether people will stand a greater chance of being able to get a mortgage having experienced difficulties for the past couple of years since the global financial crisis and recession swept across the UK.

Some believe that the worst is over when it comes to the property and mortgage markets, and that whilst the market remains challenging after the chaos that the financial meltdown has caused lenders are starting become less stringent and are more relaxed over their lending rules. This comes after several years of severe restrictions that caused a mortgage drought in the UK and in other countries around the world.

However, despite the optimism of some industry officials there are many others that believe that the market will become even more challenging, with the coalition government cutbacks and concerns over jobs likely to affect the market. Many experts believe that people will find it increasingly difficult to get mortgage finance over the course of next year, and that it could be some time before things start to ease off and mortgage lending becomes more relaxed.

One industry expert said: “I don’t believe things will get any easier when it comes to mortgage finance in 2011, and if anything first time buyers could find things have become even more difficult as the banks struggle to cope with having to repay bailout money to the government.” She added: “First time buyers also still have the added pressure of having to raise larger deposits in order to get affordable mortgage deals, as well as the threat of interest rate increases next year that could make repayments less affordable.”

Tags: industry expert, mortgage lending, finance, course, Many experts, mortgage finance, world, bailout money

Jail for crash for cash insurance scammer

Insurance fraud has been soaring over recent years, and one of the scams that some fraudsters have developed is to have accidents on purpose, making them the fault of the other driver, and then claiming tens of thousands of pounds in insurance money. Read more

Tags: crash, Mohammed Patel, crime, driver's insurance company, car insurance claims, course, car insurance fraud, car insurance scams

Economic recovery depends partly on continued lending

The deputy governor of the Bank of England, Paul Tucker, has recently spoken out about the future of the UK’s economy, and has stated that in his opinion the future of the economy partly depends on continued credit being extended by lenders. Read more

Tags: course, economic recovery, lenders, News, availability, credit

Is chancellor too optimistic about recovery of the nation?

Most people in the UK are now well aware that the UK is going through a very rocky period, with the global financial crisis still taking effect and the recession further impacting on the economy. Read more

Tags: chancellor, credit crunch, course, couple, opposition party members, chancellor of the exchequer, uk, growth

Gas bills set to rocket

According to a recent warning from energyhelpline.com gas bills are set to soar over the coming months for UK families, with annual bills set to rocket from an average of £600 a year to £1000 a year. Gas and electricity prices soared earlier this year after wholesale energy prices went up, so families have already been hit hard by energy bill hikes, in addition to rises in the cost of food, petrol, and other bills such as water and council tax. However, officials warn that things are set to get much worse.
Read more

Tags: petrol, course, Wholesale, electricity, average electricity bill, gas bills

Car insurance premiums rise by 5%

Car insurance premiums have risen by five per cent over the course of the past year, according to new research.

Findings from Sainsbury’s Bank revealed that the average premium was £497.26 in December 2007, compared with £472.52 in December 2006 which saw an increase of 5.24 per cent.

Joanne Mallon, Sainsbury’s Car insurance manager, said: “Car insurance premiums continue to rise which makes it all the more important for motorists to shop around for competitive insurance.”

She added that “the trick” is cutting your costs without cutting your cover.

Those motorists aged between 40 and 50 saw an average rise of seven per cent, which was the highest of any age group, higher even than the under 25s who had rises of just 6.59 per cent.

According to bank’s figures, men continue to pay more for their car insurance than women on average – £525.35 compared with £453.38.

Meanwhile, the bank has also warned drivers to be wary of ‘frosting’, a technique thieves use to take advantage of drivers who leave their cars unattended while warming up the engine.

Tags: car insurance premiums, course, trick, car, age, Insurance, Sainsbury, sainsburys

Christmas spending goes on credit cards

The effects of the credit crunch failed to deter Christmas shoppers with a seasonal increase in the average outstanding balance recorded, according to new research.

Findings from Moneyextra.com shows that many spenders put their festive spending on their credit cards as the average balance jumped 17 per cent in January to £2,168.

Robin Amlot of Moneyextra.com, said: “There is a clear trend of falling outstanding credit card balances over the course of the last three years. The question is whether this actually reflects consumers clearing debts or merely a rescheduling of them.”

He adds that there is now a rise in other forms of borrowing, notably secured lending as consumers look to re-schedule expensive high-interest rate short-term credit card debt.

However, although credit card balances are up from the £1,842 recorded in December, they have not increased as much compared with previous years.

January 2008’s figure is down 25 per cent when compared with an average balance of £2,901 at the same time in 2007.

Meanwhile, Moneyextra.com said that consumers could save more than £4,500 by shopping around for financial products.

Tags: card, moneyextra, Robin Amlot, average balance, course

Mortgage lending may be easing

Mortgage lending has continued to grow, with figures for May breaking records for the month.

The Council of Mortgage Lenders (CML) says that May lending figures reached £30.6 billion, a 12 per cent increase on the £27.4 billion that was lent in April.

The figure was also a five per cent increase on the £29 billion that was lent in May 2006 but the CML says that this shows that the market is easing.

Despite breaking records, the year-on-year growth of five per cent is well below the typical 12-15 per cent increase we are used to seeing.

Although this is a clear sign of the market easing up, the CML says that May’s figures remain very strong.

“While today’s lending figure is a new record for the month of May, it does indicate that the market is slowing down following the rapid and sustained growth we saw last year,” said Michael Coogan, director general of the CML.

“Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape.

“Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360 billion of lending during 2007,” he added.

Some experts are expecting the introduction of Home Information Packs into the property market from August of this year to help boost house prices.

Tags: progress, month, course, home, good shape, council of mortgage lenders

What Are Offshore Bank Accounts?

When someone mentions offshore banking or investments often people immediately think of shady dealings from James Bond films where the rich billionaire baddy stashes his cash overseas to avoid paying UK tax. Are offshore accounts really like that? Read more

Tags: course, Withholding tax, Channel Islands, account, information, monthly account charge, offshore bank accounts, tax haven