Interest rates set to rise

It looks like the Bank Of England is trying to prepare the public for a rise in interest rates back up to what it feels is a normal level - which will mean the rates returning to a level of about 5% from the current 0.5%...

BoE official Paul Fisher is quoted as saying:

"...what we need to do is to trigger the mindset in people that that's where rates will eventually go back to,"

As if 'people' were stupid enough to think that this artificially low figure is the norm... I would have thought that the message would have been loud and clear if the BoE simply raised the level by 0.25% or 0.5% rather than just talked about it... If they were worried about 'people' panicking, they could have always stated that their 'target' figure is 5% at the same time as announcing an actual raise.

The way this has been done makes it sound like they are unsure of the impact of raising the rate and want to get an idea of what the reaction will be before they do it. The likelihood is that the raise will be implemented in small steps, but no indication whatsoever is given over how long this will take.

The background to policy changes are a relatively static economy showing little growth, a low sterling market value and creeping inflation - with the VAT hike about to strike, one must question the impact this statement by Paul Fisher will have on the householder. There is not much in the economic climate that is going to encourage householders to part with their cash (other than Christmas, which as far as I am aware is not as a result of Government policy..)

Personally, I think we are still in uncertain territory here in economic terms with the threat of the dreaded 'double-dip' still a possibility. I am making the most of the low interest rates by overpaying my mortgage, not by consuming more goods - any change in the interest rate for me will just mean an adjustment to my overpayment.

£7bn from UK to bail out Ireland

Chancellor George Osborne has said that Britain was prepared to commit seven billion to the Irish bail-out plan. The EU and IMF agreed on Sunday to help bail out Ireland with loans to tackle its banking and budget crisis in a bid to protect Europe's financial stability.

"What we have committed to do is to obviously be partners as shareholders in the IMF in an international rescue of the Irish economy,"

Osborne told BBC Radio 4....

"But we have also made a commitment to consider a bilateral loan that reflects the fact we are not part of the Euro ... but Ireland is our very closest economic neighbour."

Osborne was questioned about reports that Britain was going to contribute around seven billion pounds to Ireland, he replied:

"It's around that (figure), it's in the order of billions not tens of billions but the details of the entire package, not just the UK contribution, but the euro zone and IMF contribution, that is all being worked out as we speak and we should by the end of the month have the details on that."

Osborne was keen to stress that Britain should not have to provide further help to Ireland or any other Euro zone countries that got into trouble. However this contribution by Britain is causing trouble at home amid an atmosphere of spending cuts - there are claims that this bail out makes a mockery of the hardships Britain will endure as a result self-imposed austerity measures. The criticism is heightened by claims that this is a problem that arguably should be resolved primarily by the Euro-currency countries.

Short-term debt

As the economic crisis reaches a new stage, many individuals may suffer from unemployment and loss of earnings in the coming months. In many cases, workers may be forced to take lower-paid jobs and be forced into debt whilst trying to adjust to the new level of income.

In most cases, significant changes to life-style will be required, others may consider a short-term debt solutions like pay day loans. There are problems with this type of borrowing in that it can be a relatively expensive way to borrow and may result in several loans being taken out without the principal being effectively cleared. This type of debt should be cleared promptly and may require payday loan consolidation.

You may need payday loan help if your borrowing has got out of hand, and the only long-term solution is to seriously curb your spending. If you are experiencing problems with short-term (expensive) debt, you should make this a priority. Take an overview of your total income and outgoings and make adjustments that will allow you to love within your means.

Interest Rate warning!

Official figures just released show that the economy is growing at its fastest rate for a decade. Growth over the past six months reached 2 per cent, the fastest pace of expansion over two consecutive quarters since 2000, according to the Office for National Statistics .

Economists warned that the 'good news' could be result in interest rates rising earlier than expected. Andrew Sentance, a member of the Bank of England's monetary policy committee, said "I am in favour of gradually moving interest rates up from their very low level which I think can be done without disrupting business or consumer confidence."

Interest rates have been at historically low levels since the credit crisis took hold, with the Bank of England keeping rates at 0.5 per cent since March 2009. It had been previously reported that there would be little chance of a change before the end of next year, but on the back of yesterday's strong growth figures some economists are now predicting a base rate of at least 1 per cent by the end of 2011.

As always with interest rate rises, the bad news for borrowers is good news for savers. The majority of savings accounts currently on the market fall some way short of offering customers a decent return on investment. Recently I came across a saver who had £11return on a three year bond of £3000.

David Kern, chief economist at the British Chambers of Commerce, reminded us that we have not yet seen the real impact of the Governments deficit cutting measures. True to form, the coalition are claiming the upturn as a result of their actions whilst the previous administration claim that this is as the belated result of their actions... The truth is that few people (from either party) predicted these most recent results, and at the end of the day, the economy wends its own merry way regardless of those that believe they are at the helm of national affairs.

Inflation Steady at 3.1%

Inflation has continued to exceed the Bank of Englands target of 2%, standing at over 3% since July in line with market expectations.

Lower prices for air fares, petrol and second-hand cars were offset by rising costs for clothing, footwear, food and drinks. For individual families, the worrying trend indicated here is the fact that 'luxuries' are getting cheaper, necessities are becoming more expensive...

The BoE have continued to hold the base interest rate at 0.5% (as they have for the last 19 months), but opted against pumping out more cash. Nevertheless, the threat of the return of 'Quantitative Easing' is ever-present. To date, the bank has injected £200 billion into the economy, by purchasing government bonds and high-quality private sector assets to boost lending.

Base Rate holds at 0.5%

The record low rate of 0.5% is set to stay for another 12 months or so according to best estimates. It is felt that 2011 could see a rise, but it is far too early to make a realistic prediction.

This is good news for variable rate mortgage owners, but I guess a bit of a sickener for those with a fixed rate, as it looks unlikely that they will get any benefit from their fixed rate for quite a while. Of course, most new mortgages are fixed rate as the bank have no wish to pass on the benefits of the Bank of England base rate. This in itself is a topic worthy of a great deal of debate....

For those who are benefiting from a variable rate, my advice is to overpay your mortgage (subject to advice from your properly qualified advisor of course!!) if you can. I switched to a variable rate mortgage shortly before the financial crisis took hold, so my repayments are extremely low. However I have taken the step of deliberately paying a similar rate to what I was paying before the crisis in an effort to pay off more of the principal debt.

The uncertainty around what will happen to the rate is heightened by the uncertainty about the knock-on effects of Government cutbacks which must be made by this new administration.

The mood for now seems to be 'steady as she goes' as we launch our economic ship into uncharted and potentially stormy seas...

Our 'shallow' economy

I don't really want to come across all left wing and anti-capitalist, but there is a worrying element to the drivers behind the Western economy that may indicate that it is becoming unsustainable.

In thinking about what drives us to earn and consume, it is becoming clear that it is 'unsustainable' consumer behaviour that drives larger and larger sections of our economy. These can be illustrated by the clamour to posess the latest 'Apple' product whether it be a phone (never knowingly advertised as a device for making phone calls of course..) computer, or media player. It is also illustrated by our taste in transport, ever faster, slicker, uber-designed capsules for transporting us around the globe - in reality used for dropping the kids off at school and getting in the shopping. Do we need to spend between £10,000 and £20,000 for a main vehicle let alone a 'second' car that will be the kids taxi and motorised shopping cart?
Have you also noticed that a TV used to cost a little over £100, yet now you can get a 'bargain' widescreen HD-ready TV for just £500?

Don't get me wrong, I am not knocking consumerism, I am a 'victim' and active participant... I am trying to point out that one day we might wake up to the reality, and stop buying these luxuries, at which point, our entire economy is in danger. The additional point to make is that the products themselves are contributing to the demise of the species. I don't have figures for the damage done to the environment by cars alone, but you don't have to be a greenpeace protester to be aware of these facts:

• We have too many cars
• Cars are bad for the environment
• Any 'convenience' factor of having access to a motor vehicle is now surely seriously outweighed by the damage it does to our planet.

The problem is that the voices of reason will not be heard above the clamour for the latest gizmo or gadget that is going to make one individuals life so much better at the expense of everyone else. This is where democracy fails us, no politician can speak up against the manufacturers that fuel the economy. The battle can only be won, one consumer at a time...if we all stopped doing it tomorrow, the economy would stall catastrophically - every great 'empire' has it's weakness in the end - I believe that this is the major weakness in the Western World, our rapidly increasing desire for bigger, better, faster, more advanced 'stuff' will end up with consumers eventually questioning their own sanity.

The Recovery

The recent financial crisis is becoming a faded memory, but there are some significant points about what has just happened that will have an impact on the coming years. Oddly enough, during the recession, UK householders actually experienced a significant increase in spending power because of the incredibly low interest rates. Any mortgages that have been linked to the Bank of England base rate have dropped significantly allowing families to ride the storm with comparitive ease (assuming that income has been maintained).
Mortgage rates are not set to move just yet, but it must be accepted that these low rates cannot be retained indefinitely and sooner or later will rise at least part way back to the previous level. THIS is when the impact will start to hit home a little more. Personally I have decided to overpay my mortgage while the level is so artificially low, in my opinion, regarding this boost as avaiable income may be a huge mistake. The rate has been below 1% for nearly 18 months, and I am guessing that this has put a couple of hundred pounds or more into many households pockets during the recession. If this money has been incorporated into the household spending, when the base rates resumes it's previous levels, this extra budget will have disappeared, and spending must follow suit otherwise we may find ourselves exposed to debt.
My own plan is to gradually cut back on the overpayment as the interest rises until I am left with no overpayment. The added bonus of the overpayment is of course, that I am paying off the capital at a faster rate than if I pay the minimum rate that my mortgage demands. The result of this is that the actual interest on the diminishing principal is falling too.
In the light of financial measures that will be taken to resolve the national debt issues, average incomes are likely to be more or less static for the next few years, a rising interest rate may leave families feeling the effects of the recession that they previously managed to avoid.

related posts:
bank rate drops to 1% (Jan 2009)
declining base rate (Feb 2009)
interest rate news (Jan 2009)

UK budget revealed today

VAT to rise by 2.5% to 20% next January - a rise in VAT makes far more sense than Gordon Brown's cut in VAT. Please note that life essentials are not VATable, basic foodstuffs and kids clothes are not taxed - this means that the revenue generated is not made off the backs of the poorest tax-payers. Gordon's cut in tax made absolutley no impression on the poor - it was surely only done to massage inflation figures.

Tax threshold to go up by £1000 - (but this won't come in for another 12 months ) Adding to the tax threshold is to be welcomed, but maybe indicates a less than iron grip (a token gesture which will need recouping elsewhere), and while he was at it, why not take the chance to screw more taxes out of drinkers, gamblers and smokers as well as taking a pot shot at the bankers. (levy to be made on bankers, expected to raise a couple of billion)
(no change to tax on the tobacco and alcohol)

Rising capital gains for higher rate-payers with immediate effect - this should raise a bit of revenue, and no-one is going to defend the rich who are getting their hands on yet more capital... nice move, but a risk of alienating some in the Conservative party...
There will be some capping of housing benefit, and some changes to Child Tax Credit which will affect those earning more than £40,000.

I think this gets the 'well done, but could do better' from me - so early in this governments tenure, it would have been easy to come in hard with an awsome budget that would make a real dent in the deficit, I believe what we have been given maybe a budget that will make a tiny dent in the deficit, meaning that a few more austere budgets will be needed. Every new budget is a step closer to re-election and obviously no-one is going to want to deliver a Mr Nasty budget when there is an election around the corner...

Related Posts
Dec 2009 budget

Home Information Packs (HIPs) scrapped

In May, the UK government scrapped the scheme that obliged house sellers to have a costly 'Home Information Pack' produced to give to prospective purchasers. The scheme had some good principles behind it, but it has long been the aim of a campaign by estate agents to have the scheme scrapped, however the EPC (Energy Performance Certificate) will be retained. In the meantime the housing market seems buoyant - average prices seem to be rising and instructions to sell are also on the increase, it is widely felt that HIPs was getting in the way of prospective sales, and removal of this obstacle could free the market up a little.
In an economy that is so closely linked to the financial markets, it is hoped that measured stimulation of the housing market could help to stabilise the conomy as a whole - it is difficult to see what 'industries' will get us out of the current doldrums as the UK is desperately short of any industry of any type...

A Con-Lib Alliance is is then...probably

With fine details yet to be thrashed out, a Conservative - Liberal Coalition is undoubtedly going to be the UK's next government. Gordon Brown resigned (again) yesterday after saying he would resign in September anyway. I must say I feel a little sorry for Gordon as I feel that his resignation yesterday was his own decision, the one the day before was I am sure foisted on him as a last-ditch attempt at attracting the Liberals. No doubt a scheme dreamt up by arch-idiots Mandy and Campbell.. Only a few days ago, Campbell was trying to claim that Gordon had the 'perfect right to be Prime Minister'. Only the great unelected (Such as Mandy & Campbell) could believe a man twice unlected could legitimately hold the right to an elected position. At least that should be the last we see of them in the corridors of power for a while (unless you include the House of Lords of course).
I have long believed that the House of Lords holds a valuable place in UK politics, and that's probably because I don't have the great faith in 'Democracy' that the majority seem to have. However, since they put Mandy in there (what to do with a man you have sacked, reinstated and sacked again?... make him a Lord!!), I am that much more in favour of it's abolition.

So what does the future hold for the UK? Presuming that the EEC survives the growing economic volcano, it will be a period of cuts and protest, Cameron has acknowledged this right at the start. The real trouble starts if we are plunged into a second recession in the EEC bankruptcy fallout. If Greece and other teetering nations cannot be bailed out, there is no knowing what will happen. Looking at this purely politically, the labour party did not lose as many seats as they might have, and the liberals did not gain as many seats as they might have, so the door is still open for a reversal of fortunes if the coalition does not deliver what the electorate want. Economically, we are in for a tough time and that could also unsettle the electorate especially when the government clashes with the unions as it will inevitably do. The unions would do well to bear in mind that we are in the midst of hard times. The attitude of 'Unite' over the British Airways dispute is not likley to draw much sympathy. True, some privileges have been withdrawn, but in the light of dwindling revenue in the travel industry particularly, further pressure by the unions is unwelcome and unwarranted. Public service unions are going to clash with the goverment over cuts in services, but at the end of the day, we have to get the national debt back on to a manageable footing before we build up public services again. This next two or three-year period is not the time to cry over losing your increments and priveleges if you have managed to retain your job. Pay will be down, revenues will be down, employees that can't accept that, and still feel that their pay must be comparable with someone else's, run the risk of comparing someone else's pay with their dole money...
There is still a very real danger that this coalition may prove unsustainable when real pressure is applied, we wait to see what will happen.

A new direction?

UK General Election 2010
As new power axis begins to emerge, this election has delivered a hung parliament necessitating an unholy alliance to bring in measures that will require a strong and resolute governorship.
There are a number of observations we can make at this point, namely that this hung parliament does not look good for a time during which some unpopular policies will have to be endured in order to rectify the financial crisis. The financial crisis that we now face is a massive national debt, and a global economy facing uncertainty following the problems in Greece and the possible effects on the Euro - some commentators are even predicting a new recession following on immediately after the one we have just left behind us. Let's state for the record - anything can happen in a free economy - another recession is not as unlikely as it might seem, and this time...who will bail us out?
Domestically, we are hamstrung without strong Government. To be quite frank, right now my advice to David Cameron would be to make it look like you were trying to make a fist of it...then step back and let a Lib-Lab alliance actually take the parliamentary reins. A totally unsustainable government would then have a disastrous six months after which you could come back with a massive majority. I am very much bearing in mind the warning issued by the governor of the Bank of England that the next party to come to power will be so unpopular as to be unelectable for a generation.
This would be a costly and risky strategy, and I am banking that no politician can resist power even when it is likely to be hamstrung and short-lived.
There is no real danger of a Lib-Lab alliance however, I am personally of the opinion that the two losers of an election have NOT earned the right to rule. Like it or not, the fate of the country currently rests with the Conservatives having won the election without managing to 'win' a majority of seats. I use the term 'won the election' very deliberately - there is no doubt in my mind that the Tories have won, at least in the sense that they got the most votes and surely no-one else thinks there is another party that has won?
We will no doubt see a Tory/Lid Dem alliance take the reins, and maybe the labour party should prepare themselves to return to power when this alliance falls on it's face? I don't know how this can possibly work, however economically all three leading parties recognise there is a hard road ahead and spending must be reined in. In fact, when you think of it further belt-tightening domestically, coupled with the threat of national bankruptcy in European countries sounds like a certain recipe for a second recession close on the heels of the one we are just recovering from.
The period that is to come was always going to be hard.. a weak government (as a hung parliament surely is) will not have the backbone to administer the unpalatable medicine, and could well end up just offering a placebo.

Related posts:
Economic Fix?
Slow Recovery
End of Recession

Job market changes

Where are the jobs in 2010?

Figures were recently released indicating that 1 in 5 mainland UK workers actually worked for the Government in some capacity or other, and this is the area that shows the most growth. Jobs in the Environment Agency and the National Health Service, and local government planning and social services have risen over the past decade.
In contrast, as might be expected, traditional skills are on the decline. Also, competition in the electronics industry has seen manufacturers moving out of the UK. The knock-on effects have impacted many different job roles from Machinists to Quality Control inspectors. The shift in jobs has seen some de-skilling of the work-force with many employers now complaining that their employees are not sufficiently skilled to carry out their allotted tasks.
The percentage of state employed workers in Ireland has been reported as closer to 1 in 4, which I guess means that for the moment, jobs there are more stable. Government employment is a good thing when it comes to stability, and generally the State is a good employer. However the UK government has declared a pay-freeze as a result of the financial crisis, and this will have a profound effect on the economy.
A time of decline can often be a breeding ground for new small businesses to emerge, government needs to ensure that it creates an environment that encourages these new businesses to flourish.

Who will fix the economy?

With elections looming in the UK, the underlying theme remains 'How are we going to get the economy back on track?' and politicians are in an uncomfortable position.
The road to recovery requires expenditure which means that the electrorate will have to pay through taxes. Over recent decades we have become used to our standard of living steadily increasing year on year, the truth is, that if we want to repair our economy, we will have to make sacrifices. This is not a popular election cry and this is why no-one is willing to proclaim it publicly. The three major parties will try and sneak a victory (The Liberals are looking like a force to be reckoned with after the first live televised debate), and then bring in the taxes when they are settled into office. This tactic will needlessly delay the recovery, and all done in the name of democracy... Another way in which the agony will be prolonged is the increased likelihood of a hung parliament and Gordon Brown was visibly 'cosying up' to Nick Clegg on the live TV debate seemingly preparing to pal up when there is no outright winner in May...
My primary concern as ever with this 'democracy' that we enjoy.. is that the first objective of the political party is to get itself elected, any real decisions that are going to help the economy (as opposed to policies that will placate the voters) get booted to the back of the room.
We wait to see what promises will be made and broken whilst the economy gets on with with fixing itself...

On the slow road to recovery

There is no way that this existing financial crisis is going to blow over in just a few months, there are hard times coming as the huge Government cash injections need to be accounted for. Of course, the Government pays for nothing and if they were to lose the coming election (which looks at least possible at the moment) then the tax-payers will still be picking up the bill whilst the politicians are still arguing about their expenses (there are apparently more expenses revelations on the way..).
Having said all that, there are indicators that the economy itself has hit rock-bottom and is now crawling it's way back up with a degree of determination. Figures for GDP released early have now proved to be slightly pessimistic and have been amended. Output growth figures are reportedly the highest since 1994, but it is worth noting that when you hit rock bottom, the only way IS up after all...

RBS issues bonuses again

The headlines are damning in themselves - Bank makes over £5bn loss and issues over £1bn in bonuses, but to be fair the reality is not as simple as that. The trading arm of the bank made a significant profit, keeping the overall loss down to a mere £5bn... and the bonuses were given out only in this section. However, I can't help feeling that an entity that is 84% owned by the UK government is morally obliged to lead the way in moderate bonuses instead of forking out a million to each of 100 single employees.
In fact the CEO of the bank had the good grace to decline his own bonus and that in itself tells us something. He has grasped the concept that this type of reward is obscene in the view of normal people, so why is it that this culture is so well established that we cannot stop it?
My argument is that if performance-related pay is unavoidable - who is it that pays out when their arm of the business makes a loss?
The only answer is that the people who are taking these bonuses are:

1. under the impression that they are irreplaceable
2. will jump-ship if they are not given obscene amounts of money
3. are only willing to work for obscene amounts of money - ie. do not believe in the principle of a fair days pay for a fair days work, and are not willing to share profits with any other part of the organisation for whom they work.
4. are under the impression that they are personally responsible for every success of the company, but not responsible for any losses.

This is normal in the 'city' granted, but it is more difficult to swallow when the facts of the matter are put somewhat differently. These bonus fat-cats were no doubt the first to whine for Government intervention to save their precious firms, but the last to want to lend a hand now they have been rescued from the horror of a life of working for a normal wage. They are straight back on the horse demanding satisfaction in the form of un-earned sacks of cash.
I am largely against regulation, but I do think there has to be some balance in the way that vast amount of cash is handed out to a very small selection of individuals. On the other hand I am all for responsibility, if losses are made I want to see some claw-backs from the hay that was made whilst the sun shone... I believe,the only way that these types of payments can be made acceptable, is if:

• more of the money is made available to even the lowest of the low within the organisation, it should not be reserved for the 'elite' because without the 'grinders', the top dogs wouldn't get anywhere.
• where a bonus equal to more than the lowest salary is 'due', it should be paid over five years, if in subsequent years, losses are made, the remaining unpaid bonus is offset against losses.

Only with these type of measures can bonuses be considered acceptable by the general public.

Saving money in the recession

There are any number of useful online resources for saving money in the current economic decline. These range from helpful sites like MoneySavingExpert.com to comparison sites which help you to not only get deals on insurance, but to reduce your weekly shopping like with 'MySupermarket' which allows you to compare the major retailers.
Another helpful site is the Energy Saving Trust website which helps you to reduce your energy bills as well as giving information on grants and offers. There are sites like Kelkoo which compares retailers of electronic goods, Quidco is a site that gets cashback from retailers across the board, and MyVoucherCodes features deals and discounts from both online and offline retailers.
All these sites are worth checking out if you are serious about shaving some expenditure from your personal budget - I have not supplied links (they would have to pay me for that!!), but doing a quick online search should take you to the relevant sites.
I have a couple of other sites that you may also find useful, PetrolPrices.com allows you to search for the cheapest petrol and diesel in your locality, and Freecycle is a site that works along the lines of the old 'SwapShop' TV programme.
Let me know if you have any other suggestions for sites that have genuinely helped you to save money. (Please don't suggest sites for cheap viagra!)

Related posts:
the decline of my debt
how to get out of debt
Are we in too much debt?
credit card warnings

Bank distances itself from Government

I believe that it was during the Thatcher reign that the Bank of England formally became independent from Government, yet the BoE and Treasury have naturally continued to seek unified responses to the economy. As we enter the run up to an election in a few months time, the BoE is caught between whether to prepare for a continuance of current policies or a new broom sweeping through. The only sensible approach to take is to keep a watching brief, hence interest rates remain unchanged, and it is widely expected that the government-inspired asset-buying program will be put on hold.
Analysts agree that it is likely that interest rates will remain low for at least until the end of this year, as it is likely that the bank will want to establish a convincing upward trend in the economy before allowing interest rates to rise.
The opposition are promising their own fiscal package if they gain control after the election, and the government will probably present a budget in March, either measure is likely to tighten policy after some of the 'loosest' fisacl policy ever seen... The general outlook, despite the statistically positive rise in GDP, is cautious if not downright glum. GDP did not rise anything like as much as was hoped and inflation has taken a hike over Christmas - this will not be helped by ceasing of the VAT 'holiday'. There are still tough times ahead despite the encouraging signs.

Popular Questions:
How long will the credit crunch last?
UK bank rate drops to 1%
Economic meltdown
Are we in recession?

So the Recession is over?

It's officially over... statistically we are no longer in recession. So why is it that the economy is still repressed, jobs are hard to find and money is hard to come by?
It's simple really, recession is merely a comparative measure - it only looks at productivity compared to last quarter. Now we have been in this recession state for a long time (the longest sustained period of recession for fifty or sixty years), so that means productivity has declined quarter on quarter for an entire year or more. An upturn is good, but a small upturn is actually little better than a leveling out of the bad times - we have sunk so low, but things are not going to get any worse (on average) for now. That scenario whilst generally positive should not be mistaken for a return to how things were - I'll say it again.. it just means that for now, things aren't getting any worse. For a proper recovery, best estimates are in the region of two years or so before we can effectively put this recession behind us and get 'back on track'.

Naturally, some politicians will pick up on the positive signs and try to paint a rosy picture, but the reality of slashed jobs, and static wages is the best that most of us can hope for for the next couple of years. I know I tend to paint a grim picture, but there is good reason. There are people sitting at home wondering why, if the recession is over, they are staring at house repossession and little prospect of work. I don't think it is right that the people who have suffered, and are yet to suffer as a result of this financial crisis should be overlooked in our eagerness to announce the end of recession like it were an event to be heralded. Sure the end of the decline is to be welcomed, I only hope there is enough of an economy left to build productivity back up again.

Related posts:
Is there really a credit crunch?
Is this a recession?
How long will the credit crunch last?
UK reports GDP decline

Debt Update

Over the years, I have documented how I have brought my own credit card debt down from about £7,000 to round about £1000. I did this using will-power and 0% credit cards, the first of which was a Virgin credit card which had a 16month offer. The trouble is that now it has come down to 'manageable' levels, the debt is threatening to get out of hand again...
At the lowest point last year, the total debt was down to about £600, and now that I no longer have a 0% interest credit card, the total is slowly creeping up again, and I am once more paying interest... albeit very small amounts.
If I am going to completely eradicate, this debt, I am going to need one more 0% interest credit card, and one more effort to rid myself of this burden once and for all. However, a bit like an addict, I must always be aware of the lure of the credit card and must seek to be free of debt for the future not just for now...
My first step will be to make sure my existing credit card accounts are closed if I am no longer using them - This helps to ensure I have a good credit rating, old unused accounts with high credit limits can count against you. The second step will be to compare 0% balance transfer credit cards that are currently available to find the best offer. The third step will be to exercise the will-power to pay off the balance and start saving money.