News headlines for 5th May 2012

Economics

The number of retailers falling into administration this year has jumped 180% as tough high-street trading hits well-known names, including Peacocks, La Senza and Blacks. The latest Insolvency Service shows that 67 retailers went under in the first quarter of 2012, compared to 24 in the last 3 months of 2011. The Guardian p. 27

RBS has sought to differentiate itself from its biggest UK high-street rivals by taking an aggressive approach to mortgage lending this year. Days after Lloyds Banking Group and Santander UK revealed plans to rein in lending, RBS made it clear that it intended to expand its mortgage book, essentially ‘mopping up market share from competitors’ where possible. Financial Times p. 13

Property

The average price of a home fell sharply in April according the Halifax House Price Index, dropping to their lowest level in nearly three years (£159,883). Although there had been a rise of 2.2% in March as buyers rushed to take advantage of a tax break that expired at the end of the month, this was effectively wiped out by the 2.4% fall in April. Financial Times p.4 and The Times p.47

Personal Finance

Borrowers wanting an interest-only mortgage will find it even harder to get one from 8th May when the Co-operative Bank (and sister brands Brittania and Platform) withdraw from the market for new customers. Those already holding a Co-op interest-only mortgage will be able to switch to another product on the same basis, for the same amount of borrowing, when their current deal ends. They also have the option to take it with them if they move. The Guardian money section p.2

Almost 70% of workers in Britainhave little or no knowledge of the government’s plan to enrol people automatically in their company pension scheme from 1 October. Up to 10 million employees will be put in the scheme, but currently 68% of employees are unclear about the changes. Evidently, there needs to be more communication between employers and employees with regards to pension schemes. The Guardian money section p.2

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