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: lowest level, gdp, slight improvement, improvement, house prices, course, relief, mortgage

Improvement seen in consumer confidence levels

Over the past year consumer confidence in the UK has plummeted, with soaring inflation, rising living costs, rocketing petrol and food costs, and the effects of the global credit crunch on the housing and financial markets all impacting upon confidence levels and leading to the ongoing economic downturn. However, officials have suggested that there has been an increase in consumer confidence levels for the second month in a row. Read more

Tags: improvement, drop, VAT reduction, confidence levels, consumer confidence, money, increase

Nearly all Brits need a financial workout

Almost all of Britons would benefit from a financial workout, according to the results of a latest survey.

The findings from Abbey show that only one in every 100 Brits manages the various aspects of their personal finance well.

With a higher score indicating the greater the room for improvement in their personal financial management, the average score for the UK population was 43.

Steve Shore, Abbey director of banking, said: “Less than a third of people score less than 30 which suggests that the majority of the population could do with a financial workout.”

Women scored 46 compared with 41 for men and Wales and the South West were the most financially fit.

The research looked at the financial behaviour of British consumers and gave them a score according to the products they held, the competitiveness of these products and how often they shopped around for better deals.

Meanwhile, recent research from Abbey has revealed that the odd jobs economy for children is worth an estimated £696 million.

Tags: british consumers, improvement, uk population, Wales, personal finance, steve shore, director

Women put off by financial jargon, IFA says

Women tend to be “put off” by complex finance, an independent financial advisor claimed today.

According to AJS Wealth Management, female consumers prefer the “tangibility” of hard cash rather than the discussion of financial terms and higher-end commercial discussions.

Director at AJS Anna Sofat said: “One of the things [our] research threw up was that women are put off by finance; they like money. I think it comes back to tangibility.

“Money is here and now; finance is a bit high-faluting, full of jargon and complexities that they don’t necessarily want to get their heads around – not that they can’t, they just don’t want to.”

This apparent disparity between the sexes appears to reflect a difference in average wages. According to a recent report by National Savings & Investments, women still make four per cent less than male counterparts in total.

Only a marginal improvement, of three per cent, has been registered over the past seven years, as the statistics show that female salaries still have catching-up to do.

Tags: investments, complexities, financial terms, improvement, female salaries

Brits worried about finances

The majority of us are more concerned about banking and our current financial situation than other threats to our security.

According to research by Abbey, the perils of global warming and international terrorism worry us less than managing our money.

Nearly one in four of us identify concerns about cash as the biggest threat to our quality of life, with only four per cent of us highlighting the environment as a pressing issue.

The Abbey Lifestyle Report looks at trends and concerns across the UK and this year’s report found that the majority of Brits are optimistic about the year ahead.

“People are generally positive about their quality of life in 2007 and the much-publicised issues around crime and the environment don’t seem to be denting this optimism,” said Sue Hayes from Abbey.

“The real concern for people is money and we are hoping that this is a signal that people are planning to get more engaged with their finances in 2007.”

Students were found to be the most optimistic demographic in the country, with 49 per cent believing that 2007 will herald an improvement to their quality of life.

This is in contrast to pensioners, with only 21 per cent holding the same belief.

If money worries are getting you down the best thing to do is face up to your problems and take control of your finances.

Tags: Opinion poll, finances, improvement, perils, worry, international terrorism, Terrorism, majority