Wealthy Britons are said to be the worst hit financially by the recession, with the wages of those earning more than £50,000 having risen by 8% below inflation. The Institute of Fiscal Studies (IFS), the economic forecaster predicted that the top 10% of earners will be nearly £3,000 a year worse off by 2015 in real terms, due to the economic turmoil that kicked off in 2008. Thankfully, the experts say the falls in real income for middle and higher earners have now come to an end. At the opposite end of the spectrum, sadly poorer Britons that depend on state support will continue to see their incomes squeezed for years. The striking economic impact of the recession is thought to have a major influence on the next election and ministers are concerned that even those the economy is gradually starting to recover, the benefits are not being enjoyed by many workers, especially those in the private sector.
National Savings and Investments is aiming to identify over 898,000 premium bonds winner who have not yet claimed their prizes, worth a total of £44m. One of the best unclaimed prizes is worth £100,000, but all NS & I knows is that the bond holder is female, lived in London and she has £25-worth of Premium Bonds, and she has been out of contact.
London’s exclusive property prices have been given a wake up as even the richest sector of buyers are feeling the pressure of London’s inflated property market, with prices falling in Knightsbridge and Belgravia. Although house prices in Knight Frank’s latest prime central London survey showed an increase this year and are above the market low in March 2009, they eased 0.2% in Belgravia and 0.3% in Knightsbridge as an injection of realism entered the market. At the same time, Knight Frank has witnessed much more popularity in properties valued below £2m which avoid the Chancellor’s Budget stamp duty hike. There is a change in the market and while buyers are keen to agree to purchases, only if prices are reasonable. Overall sales of London prime property climb by 17% in the first few months of this year but the boost was focussed in lower price brackets. Luxury flats in London are boosting demand with prices rising 3.5% higher than at the beginning of the year.
Figures show that lending by British banks fell by £300m in the first few months of the year, despite attempts by the Government and the Bank of England to encourage lenders to make loans, and despite support from the Funding for Lending scheme. The Co-op bank borrowed almost £1bn from the BoE in the first few months of the year but continued to pull back lending, and joins RBS, Lloyds and Santander which all slashed net lending again. The largest reduction in lending came from Santander UK which recorded a £2.3bn reduction in lending. There are major concerns over this drop in lending, considering at the end of March the outstanding balance of FLS funds drawn down by banks stood at £16.5bn. The Funding for Lending scheme has been set in stone for over a year and it is alarming that the usage of the scheme has dropped substantially since the end of 2012. Yet the banks argue that many smaller companies are unwilling to borrow in the middle of economic uncertainty and big companies often do not need to thanks to the strong bond market. Arguably the FLS is tilted towards supporting smaller firms as the level of funding banks can access next year depends on lending this year with SME lending preferred.
Britain has a stronger chance of pushing employment levels up for the 2.4m non-working women who would like jobs, if more can be done to accommodate flexible working, according to the Chair of the government appointed Women’s Business Council. Women face barriers at every level of their career from school upwards according to Rub MacGregor Smith, CEO of Mitie, the 250 outsourcer). Her council which includes business people from all sectors will today publish the results of its yearlong research, and recommends aiming to abolish the many obstacles that exist for workers of all ages, and also hopes to boost enterprise, saying there could be 1m more enterprise if women started businesses at the same rate as men. The report shows that if the female labour force participation rate could be raised to the male rate, it would add 0.5% points a year to growth, adding 10% to GDP by 2030. The council says that a cultural change is required in career advice, which the government shook up last year. Flexible working needs to be encouraged so that employment contracts reflect the job rather than when and where it is done avoiding terms such as part time and full time.