Economy Update

The latest news is that the UK economy is managing to steer a course around the rocks of a double-dip recession. Standard & Poors have endorsed the UK by retaining their triple A rating, having previously reduced both the USA and France to double A ratings.
Although we are some way from being able to state that the economy is firmly in recovery mode, there are a few green shoots showing through. There are still going to be bouts of closures and redundancies to be endured, but the overall picture is tentatively positive.

Of course, the UK is also still 'enjoying' the extended base-rate 'holiday' as the 0.5% rate is retained for the foreseeable future. Keeping this lower rate as a long-term policy helps to reinforce the 'steady as you go' feeling that has been a feature of the UK economic recovery. Admittedly, it is not great for net investors, but I suspect that there are very few of those around at the moment..!

Credit Cards

Guest post

I know way too many people who abuse their credit cards, and then end up accumulating debt that is way more than they are able to handle. Thankfully, I was taught fiscal responsibility at a pretty young age, and think I have a good handle on my bills. This does not mean that I don't use my creditcard, in fact, the opposite is true. I use my credit card for most of the purchases I make. The difference between what I do and what others do is that I do not buy anything outside of my means just because I have a credit card that can delay the payments. I only buy things that I would be able to pay for in cash or using my debit card. I choose to use my credit card because, this way, I am able to accumulate points that I can use towards paying off my balance, gift certificates, hotel reservations, or even airline tickets. I always make it a point to pay off my balance in full each month, so I am never accumulating interest, which is really just a death sentence in the credit card world. This is not to say that I haven't accidentally developed a bill that was much higher than I anticipated. I always know that, even when I am really not happy about it, I have enough money to cover it somewhere. Generally I have enough in my checking account to pay the bills, but in those unfortunate circumstances where I do not, I can always transfer money from my savings account to cover the difference. I even have it set up so that if I forget to go on and pay the bill it automatically deducts from my checking account. I can see how sometimes you start to rack up your bill quickly if you are not carefully monitoring your spending, but I also have a hard time understanding how people make huge purchases that they know they do not have the money to cover with their cards. I have seen very few circumstances where that has ended well for the buyer, and I hope to avoid ever having to do that with my credit card.

Budget 2012

The Government have learned a lesson this year, the lesson is that if you leak all the good stuff before the budget is announced officially, the media will concentrate on all the stuff you don't want highlighted...
The Good Stuff includes an increase in the amount we can all earn before tax, a staged reduction in corporation tax, removing child benefits from higher earners (not everyone will regard this as 'good stuff'...) and new taxes for gambling and gaming machines.
The biggest 'shock reaction' was to news that pensioners are not going to continue to enjoy their previous tax breaks. In actual fact, pensioners are merely being brought in line with everyone else when it comes to tax - although it has been called a 'granny tax' and presented as pensioners losing money, it has been done in such as way that the pensioners will not enjoy increased tax allowances until they are in line with working incomes.
The other big talking point has been the removing of the top-tier 50p tax rate - said to be intended to actually increase tax revenue - time will tell whether this is true, but whatever else it is, it is certainly a bold step. All-in-all, this looks t me like a budget that gives a lot to low earners, a little to middle-earners and what looks like a boost to top earners too. Of course, it will not please pensioners, but it also manages to boost small businesses too with the reduction in corporation tax.
Time will tell whether this is a 'good' budget, but I think I am willing to concede that it is not a bad one...