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UK house prices continue upward march
by Josh Hall | 30 Jun 2009
The average UK house price increased by 0.9 per cent in June, according to new figures released today.
UK economy suffers worst contraction in 51 years
by Josh Hall | 30 Jun 2009
The UK economy shrunk by 2.4 per cent during the first quarter of 2009, according to new figures released today.
Conservatives 'would scrap or replace IR35'
by Josh Hall | 30 Jun 2009
A Conservative government would reconsider IR35, with a view to either scrapping or amending the legislation.
Barclays warns bank charges case spells end of free banking
by Rosie Beasley | 26 Jun 2009
A lawyer for Barclays has warned law lords that free current account banking would be in jeopardy in the event that the banks lose the overdraft charges case. Jonathan Sumption QC, who is representing Barclays in their appeal against an earlier decision that overdraft charges are not exempt from 'unfair contract' rules, stated that the huge charges were necessary and intrinsic to the "funding of the whole current account system." It has been suggested that, in the event that the charges are found to be unfair, the UK could adopt a system similar to that found in most other Western countries, in which a flat monthly fee is charged for the use of a current account. The ruling currently being appealed stated that charges could be examined for fairness by the Financial Services Authority. Tens of thousands of customers have already lodged complaints against bank charges, with many receiving full refunds. Claims are currently on hold while the case is heard. A final judgment is not expected until late this year or early 2010.
by Rosie Beasley | 26 Jun 2009
The rift between Chancellor Alastair Darling and Bank of England governor Mervyn King grew wider yesterday as Mr King revealed that he has not been consulted on an important new White Paper on financial services reform due to be delivered by the government. Speaking to the Treasury Select Committee, the central bank governor also said that there had been no meeting between the Bank, Treasury and Financial Services Authority regarding the contents of the legislation. These three organisations form the tripartite group responsible for the bulk of monetary and fiscal oversight in the UK. King and Darling have clashed in recent days over disagreement on the extent to which the regulatory system should be reformed. In a speech to City luminaries at Mansion House last week, Mr King insisted that the system must be completely overhauled, with more power being granted to the Bank of England. But Mr Darling said the system would remain basically as it is, with no significant increases in the regulatory burden faced by banks. The White Paper is due to be presented by the government next week, and will form the basis of future wide-ranging banking legislation.
Fed says recession is 'slowing'
by Rosie Beasley | 26 Jun 2009
The United States Federal Reserve has said that the pace of the recession is "slowing" in the US, as it kept interest rates unchanged. But it said that the American economy would continue to be weak for some time, and that it expected inflation to remain "subdued" for the near future. Markets were unsurprised by the Fed's decision not to change base rates, with the Dow and FTSE remaining largely unaffected. Analysts say the announcement backs up general opinion that the worst of the recession is probably over, but that any recovery is likely to be drawn out. Earlier this week the Organisation for Economic Co-operation and Development (OECD) praised the actions of world finance leaders, saying that measures like quantitative easing have helped to avert a global depression. The Fed, the United States central bank, bought $1.2 trillion of government debt in the largest quantitative easing programme at the time.
Fixed mortgage prices continue to increase
by Rosie Beasley | 25 Jun 2009
The price of new fixed rate mortgages is increasing at a surprising rate, according to a report today in the Telegraph. The average cost of a two-year fix is now 5.04 per cent, up 0.14 per cent since Monday. This rapid increase has led man to suggest that deals of this kind could break the 7 per cent barrier within a matter of weeks, with 6 per cent likely to be breached within a fortnight. The increases come after many lenders slashed their prices in line with the Bank of England's precipitous reduction in base rates. But this rate cutting now appears to have ceased. Almost 90 per cent of those currently lookigng for a new mortgage deal would prefer a fixed rate deal, in order to 'lock in' the historically low rates. But recent rises will hit professional landlords particularly hard, as the increasing cost of borrowing prevents many from taking advantage of low property prices. The latest bout of increases was led by Nationwide, which bumped the prices of its entire mortgage range earlier this month. Virtually all of the major lenders followed suit soon after.
by Rosie Beasley | 25 Jun 2009
UK house sales volumes has continued to rise, according to new figures released today. The survey, published by HM Revenue and Customs, suggests that sales volumes increased by 7 per cent during May, with 62,000 residential properties with a value over £40,000 having been sold. Mortgage approvals are also rising, according to Nationwide and the Halifax, leading some analysts to believe that this is the beginning of a sustained recovery in the housing market. But activity is still well below the record levels of last October, and sales always enjoy a seasonal bounce during spring. May's increase was not as significant as the huge 40 per cent rise seen in March, but many are now suggesting that the worst of the housing crash is behind us.
OECD offer encouraging forecasts
by Rosie Beasley | 25 Jun 2009
The Organisation for Economic Development (OECD) has suggested that the global economy will soon bottom out. The OECD, which includes the 30 most highly industrialised nations in the world, has revised its forecasts upwards, suggesting that the particularly notable plummet seen in the two quarters preceding May 2009 may mark the worst of the recession. But it still notes that the UK is suffering a particularly "sharp recession", and predicts that there will be no growth in the UK economy during 2010. This is in contrast to the Treasury's own predictions, which many analysts suggest are over-optimistic and will need to be revised. According to the OECD, UK economic output will shrink by 4.3 per cent during 2009 - up 0.6 per cent on its last forecasts. In its statement the OECD also praised the actions of financial leaders, suggesting that to avoid a global depression constituted "a major achievement of economic policy."
Soaring unemployment bad news for buy-to-let
by Rosie Beasley | 22 Jun 2009
Unemployment has suffered a further rise in numbers to 2.26 million - a 12 year high. This could spell disaster for landlords who rely on rental income to support their buy-to-let investments.
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