You people in the UK are becoming resigned to the fact that they expect to have to rent properties rather than own their own properties. Over a half of the 8,000 people questioned in a study by Halifax said that they thought it would be more common for people to rent a property rather than to buy one within the next generation. The amount of people that think this has almost doubled year on year.
A lot of the belief comes from the fact that the loans and mortgages are very hard to come by for lots of people unless they have a substantial some of money to invest in a deposit for their mortgage. The lack of deposit rules out all but the wealthiest of younger adults who just don’t have the money to get on to the property ladder and can’t save enough after they have met their current financial commitments.
The report by Halifax reveals that while there are lots of government schemes to help people on to the first rung of the property ladder, especially with a view to re-igniting the economy, around 40 per cent of those questioned were not aware of them.
Consumer confidence is on the rise so it seems if you look at recent spending figures for the UK. According to figures from Barclaycard the amount of money that people are spending rose by 4 per cent in May compared to the same time last year.
It is hoped that this will spark yet another ray of light on the British economy as another possible sign of economic recovery. The spending figure is expected to be way above the CPI when the figures are released next week which is expected to be just over 2.5 per cent.
It is unclear if there is a sharp rise in confidence or whether it has been helped by businesses slashing prices to try to generate sales. A large amount of the spending was on treats, with people happy to spend their money to feel better and have fun. Popular choices for what people chose to spend their money was on flights, as they went on holiday and at home visits to cinemas and theatre shows.
Online shopping has seen growth, internet sales are seeing huge amounts of growth as more and more people look to the internet for cheaper products that are a more convenient purchase. High street shops haven’t felt as much benefit as they lose ground to internet shopping.
May is often a huge time for DIY and home improvement stores as people look to start projects on their home over the bank holiday weekends but the weather has put a huge dampener on this for lots of people. The weather could have been a huge factor in the amount of people choosing to leave the country to chase a little sunshine, causing a boost to spending on flights.
While the economy is showing signs of growth, confidence is still very fragile. Sharp increases in costs from things like utility bills and fuel costs could make people go from feeling ok about spending money to worrying about it because of their bills.
Almost two thirds of small and medium sized British businesses say that the UK should stay in the European Union because it is vital for business according to a new survey.
The survey by BNI, which is a 13,000 member strong organisation for small businesses in the UK shows that there is a huge amount of support for the EU by company owners who feel that they need the exports that Europe brings to keep their company’s afloat.
The survey shows that Europe is a natural extension of their trading turf. It also showed that businesses in the UK preferred dealing with European companies that had similar ways of doing business.
While many businesses struggle to secure loans to expand their business in the UK, it is easy to see why they which to be able to continue to pursue business within the EU. Europe accounts for over 50 per cent of all of the UK’s exports according to government figures.
Seven of the UK’s largest banks have changed the way that they charge people for returned direct debit payment, which could save customers a lot of money. It is believed that the unnecessary charges could be costing customers as much as £200million each year.
Until now banks often process direct debits in the early hours of the morning, sometimes soon after midnight. If a customer’s salary or other payment is processed into the bank after the direct debit has occurred the customer would be charged by the banks for a lack of funds, despite the funds being in the account on the same day.
Now what the 7 banks that have changed are doing is that if a payment fails, rather than immediately issuing charges and returning the direct debit as unpaid, it will retry the payment later on in the day to see if additional funds have cleared into the bank. This should also mean that people should be able to deposit cash on the same day to cover the cost of the payment to insure that the payment is processed on time.
The Bank of England has held interest rates at a record low and also decided not to implement more quantitative easing.
Sir Mervyn King has pushed for QE, who has been arguing the case for more monetary stimulus in recent months but was out voted on every occasion, however it is unclear how he voted today until the minutes are published. Minutes from the 2 day meeting will be published on June 19th.
Today was his last Monetary Policy Commission meeting as Governor as he is now due to retire. He has been heading the Monetary Policy Commission that sets the base rate of interest for the country for the last 16 years. King has voted at every single meeting that decided the country’s interest rates since the Bank of England became independent in 1997.
Mark Carney has been appointed by George Osborne as the next Governor of the Bank of England. The position is normally held for an 8 year period but Carney has hinted that he may step down after 5 years.
The British government need to increase its efforts to aid infrastructure projects in a bid to help the UK’s economic growth according to the OECD (Organisation for Economic Cooperation Development).
The OECD forecasts the economic development of many of the countries that belong to the EU, providing them with an economic outlook. They lowered their 2013 growth predictions from 0.9 per cent to 0.8 per cent and also lowered their 2014 prediction by 0.1 per cent to 1.5 per cent. It said that the UK economy still faced strong headwinds from a recession plagued Eurozone and that slow income growth was also a worry.
The OECD said in its report that investing more in infrastructure would enhance growth prospects for the UK. This recommendation comes just days after the IMF recommended that the country should borrow as much as £10billion to invest in infrastructure spending and business tax cuts to bolster the recovery.
The Cooperative bank has been forced to put lending on hold to small businesses that submit new applications as part of measures to try to repair some of the void left in its capital after its credit rating was pretty much destroyed overnight. The bank’s credit rating was downgraded by 5 steps despite protests by it that it was perfectly fine.
The bank has had to put any new loan applications on hold for small businesses which looks bad when this is the exact opposite of what is being encouraged by the government in a bid to stimulate the economy, although it has said existing applications will still be processed while it is in talks with the Prudential Regulation Authority about how to bolster the banks shortfall in capital.
It is believed that one possible solution would be for the bank to see the bank separate its good and bad assets, to hopefully improve the standing of the bank sans toxic assets. The discussions with the PRA could last between four and six weeks.
It’s no secret that much of the country is feeling the effects of the current financial climate but it is quite surprising just how close to the wire lots of families are.
According to new research by Halifax 13 per cent of people said that a rise in monthly living costs of £24 or less would be extremely troublesome and nearly half of the households (46 per cent) said that they would struggle to cope if at all if their bills rose by £99 or more per month.
According to the research it is people in their forties and fifties that are the worst affected; nearly 20 per cent of them said they wouldn’t be able to cope if their bills rose by as little as £24 or under.
People across the UK have been struggling with the ever climbing cost of living which isn’t being helped by inflation. Everything from utilities bills, fuel bills and most importantly food bills seem to continuously rise. Even the mortgage companies have started to raise their interest charges despite the base rate of interest remaining at 0.5 per cent where it has been since March 2009.
The CBI has said today that its economic forecast for Britain is changing from being flat to a position of growth, which could see an end to the country’s period of recession.
The CBI has forecast that the GDP (gross domestic product) will grow by 1 per cent during 2013 and that it should climb by 2 per cent during 2014. The forecasts by the CBI are adding to the growing number of signs that the economy could finally be recovering.
The ONS (Office of National Statistics) revised its figures for last year, the new figures indicate that Britain actually managed to avoid the double dip recession.
The Bank of England held off of utilising more quantitative easing today under renewed enthusiasm about the current direction of the UK economy. The UK has avoided a triple dip recession during the first quarter of this year and there have been encouraging signs of life in the economy.
The base rate of interest was also held at 0.5 per cent, which is the level it has been at since March 2009.
According the ONS (Office of National Statistics) industrial production climbed by 0.7 per cent in March, which is an encouraging yet small sign of a possible return to growth in the UK.
The vote on QE was taken by the Monetary Policy Committee before it was clear that the UK had managed to escape a triple dip recession, but they felt that the signs were strong enough to opt out of injection more cash into the economy. According to the minutes of the meeting Sir Mervyn King, David Miles and Paul Fisher voted in favour of injecting more cash but were overruled.