Loan hikes have made millions for UK banks

According to a recent report banks in the UK have managed to make millions of pounds as a result of sneaky hikes on loans and other forms of borrowing. The claims have been made following an investigation by a finance group, which shows that since they started making huge losses during the credit crunch the banks have been merciless on their attack on consumers in order to try and shore up their own finances.

It is claimed that banks have been making up the losses on their books by slyly increasing the rates of interest charged on borrowing whilst at the same time reducing the rate of interest on savings accounts to the point where some savers are earning practically nothing on the money that they put into their savings.

Officials claim that banks are getting away with this because of the rock bottom base interest rate, which still stands at just 0.5 percent, which is the lowest it has ever been in the history of the Bank of England, and it has been at this level for well over a year now.

The low base interest rate has fooled many people into thinking that borrowing is cheap at the moment. However, what has in fact happened is that the gap between the base rate and the rates that lenders are charging has expanded resulting in what has been described as an eye watering margin. The fact that the base rate is so low, coupled with the fact that many of these banks have been bailed out by the taxpayer, appears to have provided no benefit to borrowers.

An official from the consumer campaign group Which? said: ‘We paid for the banks’ failures once when we bailed them out and now they are getting a double hit by taking more of our cash.’

Tags: interest rate, investigation, credit crunch, Economic history, Loans, banks, finance

Banking crisis easing according to central bank

It has been reported that the Bank of England in the UK has claimed that the crisis that has hit the banking industry has started to ease off, although it does not deny that the system remains highly vulnerable and could be easily hit by disruption again. Read more

Tags: bank of england, finance, banking crisis, figure, vast improvement, credit crunch, paul tucker, Central bank

Shake up of employment laws needed

It has recently been claimed that some employers in the UK are abusing employment legislation by ignoring regulations in order to get rid of employees without going through the property procedures. Read more

Tags: jobs, redundancy, employment legislation, credit crunch, fine, MPs, employments laws, Germany

Economic growth will be slow according to CBI

According to the Confederation of British Industry the growth of the UK economy still has a long way to go, and progress is likely to be slow. The comments from the CBI came amidst a variety of other industry reports that showed encouraging figures with regards to output and growth over April and May, and showed a rise in consumer confidence, as well as increased interest in the housing market from first time buyers. Read more

Tags: job losses, industry, economic growth. growth, May, first time buyers, bank of england, cbi officials, credit crunch

UK doing better than other European economies

It has been claimed in a recent report that the economy in the UK is faring much better than other European economies, and that the UK government deserved credit for its economic policies. Read more

Tags: Great Depression in the United Kingdom, credit crunch, labour government, economy, uk economy, Regional science, economic crisis, Pound sterling

Worst of recession could be over according to economist

One economist, who has recently become a member of the powerful Monetary Policy Committee, stated that the worst of the recession for Britain could be over. Read more

Tags: credit crunch, Macroeconomics, interests rates, way, certain time lag, recession over, economist, rate

Credit crunch leaves High Streets more deserted

It has been claimed that the ongoing global financial crisis and the recession have resulted in the High Streets of Britain being left more and more deserted, as a rising number of shoppers decide to cut back on their spending. A recent report showed that an increasing number of people deserted in the High Street in March, as the effects of the difficult financial climate continued to take their toll. Read more

Tags: recent report, Experian Footfall UK National, experian's senior uk, shopping, credit crunch, recession

Air travel plummets in popularity due to credit crunch

According to a recent report the popularity of air travel amongst UK consumers has taken a real hit as a result of the global credit crunch, with fewer and fewer people able to manage holidays abroad. Read more

Tags: weakening, credit crunch, result, overseas property ownership, recession

Credit crunch results in loss of sleep for many

A recent report has suggested that the effects of the ongoing global credit crunch is resulting in many of us losing sleep through worries over our finances and our futures. Read more

Tags: credit crunch, heating bills, worse nights, group, half, age, finanicial stress, credit

Credit crunch alters eating habits of Brits

A major credit card provider has recently carried out a study, and claims that the results of the research show that the global credit crunch, which continues to take a hold in the UK, has had a dramatic effect on the eating habits of Brits. Read more

Tags: british eating habits, eating out, uk, crunch, abbey credit cards, credit crunch, official, eating habits

Recession results in increase in liquidations

Officials from the Insolvency Service have recently reported that there was a sharp increase in the number of companies that went bust in the last three months of last year, as the recession and the global financial crisis continued to take a grip in the UK. Read more

Tags: industry, liquidations, sector, grip, credit crunch

The day Britain nearly went bust

For most of us Friday 10th October 2008 was just like any other day, and we all went about our business as usual, with no idea that government officials were working frantically behind the scenes to try and save the nation from a disaster. However, it has now been revealed that on that same date the nation was on the brink of financial collapse. Read more

Tags: Financial crises, bank of england, stock market, recent report, britain bust, Baron Myners, credit crunch, financial collapse

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

Many jobs to be affected by credit crunch

Most people are sick of hearing the term ‘global credit crunch‘, but sadly this is s term that many of us have had to get used to over the past year. Read more

Tags: negative equity, loss, job losses, job sectors, Credit card

2008 saw 30 percent drop in mortgages

Over the past twelve months mortgage lending has fallen by around 30 percent according to officials from the Council of Mortgage Lenders. This drop in mortgage lending has apparently resulted in lending falling to its lowest levels since 2002. Total mortgage lending last year fell to £256.4 billion, whereas the previous year mortgage lending levels came to £363.7 billion. Read more

Tags: number, thing, percent, credit crunch, interest, percent drop, mortgage drop, Credit (finance)

How much will taxpayers end up paying to bail out banks?

We all know that over the past year the UK’s banks have got themselves into a right financial pickle, and many have had to scale back on their lending operations enormously because they didn’t have the finances to continue as they had been before the global credit crunch swept across the nation. Read more

Tags: scheme, ploughing, credit crunch, finance, bank bailout

Global financial job losses to be huge

According to recently released figures the number of jobs that are set to go within the global financial sector will be far greater than originally anticipated, and it is thought that around 350,000 jobs could be lost as a result of the turmoil that has wreaked havoc in the financial sector since the onset of the global credit crunch. Read more

Tags: finance jobs, seismic shift, Global, economics, Brian Sullivan, credit crunch

Were we already spending less on luxuries before the credit crunch?

Every week there seems to be some report or another stating how spending levels on luxuries such as holidays has plummeted since the onset of the global credit crunch, and indeed the financial situation and turmoil over the past year has made things very difficult for many households and has severely restricted spending levels, leading to a downturn in the economy. However, one recent report has suggested that families in the UK had already started spending less on things like holidays and clothes before the effects of the global credit crunch took full effect. Read more

Tags: credit crunch, luxury goods, fuel, Office for National Statistics, time, housing, Northern Ireland

Credit crunch really affecting 18-34s

According to a recent report one of the groups that is most suffering as a result of the ongoing global credit crunch is the 18034s age group, which some industry officials have referred to as the Ipod Generation. Over half of this group is thought to have debts of over £10,000, not including mortgages, and nearly a third have no form of savings whatsoever, putting them at increased risk of really feeling the pinch. Read more

Tags: credit crunch, financial services practitioners, Hardware, broke britain, half, chartered accountant

Credit crunch affect charities

According to recent reports around 25% of charities in the UK have seen the level of money coming in from consumers drop over the past twelve months, as cash strapped households rein in their spending in a bid to try and weather the effects of the global credit crunch. Many people are apparently unable to give to charities in the same way as before because money is so tight due to higher living costs, tighter credit conditions, and soaring inflation. Read more

Tags: meeting, homeless charity, bid, credit crunch, uk, charity

Financial downturn could last another eighteen months

According to an industry official the financial downturn that the nation is experiencing at the moment could last for another eighteen months until the property slump in the United States sorts itself out. Andrew Hornby, the chief executive of HBOS, said that it could take until 2010 for house prices in the United States to start rising again, and this could mean that the financial problems in the UK will persist for some time to come. Read more

Tags: sixty, uk government, interview, Economy of the United Kingdom, house, credit crunch, meantime reports claim, long time

UK economy in worse shape than imagined

According to the largest manufacturer’s association in the UK, the CBI, the state of the economy in the UK is in worse shape than most actually thought. The CBI has said that the economy is deteriorating far faster than was originally thought, with the association’s director stating that there was “no doubt that the mood has darkened in the last two or three months.” He gave the stark warning to members in a letter. Read more

Tags: director stating, Additions, credit crunch, Association, Mervyn King, economy, inflation, Lambert

Supermarket giants try to entice customers back

With food prices having soared out of control, in addition to the range of other hikes in bills and living costs, many people have been struggling to make ends meet when it comes to the household budget. Consumers have tried to make a range of cutbacks in order to try and make their money stretch further, and for many this has meant switching from the more expensive supermarket giants such as Tesco, Sainsbury’s, Asda, and Morrison’s, and turning to discount grocery stores such as Aldi, Netto, and Lidl. Read more

Tags: price, official, recent additions, tesco, Retailing, supermarkets, credit crunch, Asda

Richest and poorest Brits hit by credit crunch

People at extreme ends of the wealth scale are being affected the most by the current economic turmoil, according to MGM Advantage.

The richest and poorest people in the UK are feeling the pinch from the credit crunch the most, the retirement income specialist has said.

According to research commissioned by the company, 20 per cent of people who are in debt and 25 per cent of those who have assets worth more than £1 million prefer to stash their cash at home rather than putting it in a savings account.

In the survey of more than 3,000 people round the country, it was found that women tend to be more likely to put their hard-earned cash in a savings account than men – 60 per cent of women said they used savings accounts compared to 48 per cent of men.

The Post Office recently reported that people who leave their money in accounts that pay a low level of interest are losing a total of about £8 billion every year.

Tags: GBP, money, poorest people, post office, cent, post, uk

‘Holidays abroad to drop under credit crunch’

The current economic turmoil means that more people will be unable to afford a holiday overseas this year, the Family Holiday Association (FHA) has said.

A recent study by Abbey Credit Cards found that parents who planned to take their families abroad for the half-term break were hit with prices up to 80 per cent higher than usual.

John McDonald, the director of the FHA, commented: “I think holidays are really important for the well being of both the children and the parents…it is a disappointment that perhaps more people will miss out this year than perhaps did last year.”

Last week, insurance company Axa warned holidaymakers that if they arrange the different parts of their holiday separately, such as flights, hotel and cars, they could be leaving themselves open to unnecessary risks.

According to the company, travel insurance does not always cover people who book their holidays independently rather than through a travel company.

Tags: credit crunch, AXA, Academic term, usual.john mcdonald, flights, John McDonald, holiday

Bradford & Bingley: Arrears on the up

UK lender Bradford & Bingley has said that mortgage arrears are continuing to rise as more borrowers are facing difficulties in repaying their loans.

Britain’s ninth-biggest listed bank said that it expect increased payment strain and falling house prices to result in higher impairment provisions, according to Reuters.

Hours after meeting with Alistair Darling, the mortgage lender, which makes over 50 per cent of its home loans to buy-to-let landlords, said its margins were under pressure and it is starting to pass the higher costs on to customers.

Yet the bank also said that the buy-to-let area of its business is performing well, suggesting that it is homeowners who are being hit hardest by the credit crunch.

Those faced with arrears will be pleased with Abbey National’s announcement earlier this week that it will cut rates on its two-year tracker and flexible mortgages by 0.1 per cent.

“We will continue to review the cost of funding and will look to reflect further changes in our mortgage range going forward,” said a spokesman for the bank, adding that it hopes other lenders will follow suit and take action to stimulate the mortgage market.

Tags: credit crunch, house, range, loan, Alistair Darling, announcement, crunch, funding

Credit crunch makes it ‘harder’ for UK consumers to get cards at low-rates

UK consumers are “finding it harder” to get credit cards with low rates of interest due to the credit crunch, one financial expert has claimed.

Credit Action said that credit is not as widely available as it was 12 months ago and in those places where credit can be found, it is often more expensive.

Chris Tapp, director of Credit Action, said: “So credit cards and all kinds of credit have become a less widely available and a more expensive option for borrowing than they were in the recent past.”

However, he added that the popularity of credit cards is still enduring and they are not about to go away as they are now a “very normalised part” of the way that people manage and borrow their money.

Recent research from MoneyExpert.com released at the beginning of the month shows that 3.2 million of us own five or more credit cards and 28 per cent of us applied for more plastic last year.

The news comes despite mounting concern about debt problems as the credit crunch hits home.

Tags: director of Credit Action, credit crunch, Credit score, plastic, past

Green mortgage sales to remain ’static’ in the wake of the credit crunch

It is unlikely that lenders will begin to offer green mortgage products in the near future following the effects of the credit crunch, one financial expert has claimed.

Moneyfacts said that there has been no big change in the number of lenders offering the products over the past four or five months.

However, Darren Cook, head of mortgages for Moneyfacts, said that there is still a demand for the products in the marketplace.

“But the lenders that are in [that market] are generally motivated by social responsibility; it’s due to their company ethics that they supply these products,” he said.

Because of this the firm say that lenders who are already dealing in this sector will have a tendency to stay.

At present only five lenders offer green mortgage products: the Co-operative Bank, Ecology Building Society, Norwich and Peterborough, Giraffe and The Hanley Economic Building Society.

The criteria of these products range from planting 40 trees for every green mortgage taken out to donations to carbon offsetting charities.

Tags: big change, Darren Cook, Co-operative, tendency, The Co-operative Bank, charities, Norwich and Peterborough Building Society

70 working days needed to pay off average debt interest, survey claims

People who borrow money using personal loans and credit cards need to work for an average of 70 days per year just to pay off the interest their borrowing accrues.

That is according to Unbiased.co.uk, which has proclaimed March 10 “Debt Freedom Day” to draw attention to amount of money consumers are having to pay just to service their debts – let alone pay them off.

Last year’s Debt Freedom Day fell on February 1, and this year’s date reflects the dramatically increased amount of unsecured borrowing British consumers are taking out.

Although credit card borrowing has fallen slightly from last year £55.6 billion to £54.9 billion from 2006 to 2007, the value of personal loans taken out has risen to £9.8 billion from £2.6 billion last year.

Combined with the effect of the credit crunch – which has pushed up the rates of interest charged on personal loans by an average of 0.5 per cent in the last year – debt and interest have soared.

Unbiased chief executive David Elms warned: “While Debt Freedom Day is of course a hypothetical point in the financial calendar, people should pay attention to it. In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.”

Tags: Unbiased, GBP, cent, economics, point, taken out, credit crunch, Credit Cards

Green mortgages ‘not affected by the credit crunch’

Green mortgages have not been affected by the credit crunch, due to the “type of person” who takes one out claims one lender.

Norwich and Peterborough Building Society said that, despite concern over interest rates, there has been no change in the numbers of people taking out green mortgages.

“The reason they’re interested in a green mortgage is because of their personal ethics, so we’ve seen no difference at all,” said Alison Rolls, a spokesperson for the business.

She adds that green mortgages are still very much a “niche product” with growth being much slower than would be good for the environment.

Overall more consumers still need to “put the environment more on their shopping list” and think less about interest rates.

According to Mortgages.co.uk, green mortgages aim to reduce negative impact on our environment.

Lenders that offer this package will often make contributions to charities that support the environment or the welfare of the less fortunate.

Tags: economics, credit crunch, Peterborough Building Society, support, Super jumbo mortgage, Financial crisis of 2007–2009, crunch, Alison Rolls

Buy-to-let sector remains upbeat

The optimism in the buy-to-let sector has not been deterred by predictions of a moderating property market, according to industry experts.

Research from the Association of Residential Letting Agents (ARLA) has revealed that only one in ten of landlords are considering selling their property.

A further 40 per cent of investors are looking to expand their property portfolios over the next year.

Ian Potter, head of operations at ARLA, said: “This is good news for the whole of the private rented sector and for the housing market, particularly as it comes from surveys carried out well after the credit crunch had begun to bite.”

The findings also show that 90 per cent of buy-to-let landlords also have no intention of selling up in the last quarter of 2007 within the next 17 years.

Meanwhile, house prices in the UK increased by just one per cent in the final quarter of 2007, according to research released today by the Nationwide building society.

Tags: investors, today, nationwide, 17 years, last quarter, quarter

Balance transfers make Christmas debt manageable

Balance transfers and consolidation loans are a “manageable way” of tackling post-Christmas debt, according to industry experts.

Thomas Charles, a financial firm that offers a free confidential debt counselling service, has advised that consumers who overspend in the festive season should explore all the options available to them.

James Falla, director of Thomas Charles, said: “If you do find that you have overspent, there is nothing wrong with doing a balance transfer and transferring the balance onto a new credit card.

“But the key piece of information which is not discussed after doing that is that you must make sure that you cancel the previous card and cut it up so you don’t have the temptation to use it again.”

He added that it is the consumers who have done balance transfers and explored the consolidation loan route but not changed their attitude to spending that will “get themselves into trouble”.

Recent research published by Thompson found that consumers were still intending to spend more money this Christmas than they did in 2006, regardless of the credit crunch.

Tags: temptation, christmas, overspend, credit crunch, overspent, them.james falla, money

Effects of credit squeeze ‘hard to predict’

How long the impact of the global credit squeeze on the mortgage markets will last is not easy to forecast.

According to the Council of Mortgage Lenders (CML), it is not yet clear how long the credit problems will continue to affect the number of mortgage products on the market.

Bernard Clarke, a spokesperson for the CML that there is uncertainty over when the credit market will return to “normality” and if that “normality” will be the same as before credit crunch.

“There are implications within that for lenders operating in wholesale funding markets. The problems persist for now, and in the longer term we expect the wholesale funding market to improve and become more liquid, but perhaps it will not be as liquid as it was before,” he said.

Commenting on whether the credit squeeze will affect the types of products on the market, Mr Clarke added that time will tell how the government will set out to promote people taking on fixed-rate, long-term mortgages.

Tags: credit crunch, market, Subprime mortgage crisis, Mortgage loan, Super jumbo mortgage, cml, market.bernard clarke, term

Credit crunch will hit ‘less well off’ worst

Mortgage-seekers who are less well off will be hardest hit by the implications of global credit squeeze.

According to a representative for money education charity Credit Action, the sub-prime mortgage crisis that hit the US with its repercussions reaching UK financial markets, has meant that those with the least will now find it hardest to be successful in mortgage applications.

The mortgage market has seen a widespread tightening up of specifications for people wishing to take out a mortgage after the problems that famously hit lender Northern Rock.

However, she said: “The companies that traditionally provide for the less well off, such as the door step lenders, won’t be affected because their system is so different.

“They rely on the agent network and I don’t think that is likely to be affected at all.”

She added that the sub-prime market makes up around “ten per cent” of the UK mortgage industry and it is clear this has been impacted by problems in the US.

Tags: sub prime mortgage crisis, United Kingdom, tightening, credit crunch, uk mortgage, repercussions, cent