Loans and Finance

Loans and Finance

Text

News and information about loans, money, debt, finance and business issues.

Thursday, March 31, 2016

ONS Revised Q4 GDP To 0.6%

The ONS, as it always does, has yet again revised some stale dusty old figures.

Now, if the ONS is to be believed, the UK economy grew 0.6% in fourth quarter of 2015 a revision upwards from the previous revised figure of 0.5%.

Given that these figures are now three months old, what use is it to anyone to revise once again old out of date numbers?

Out of date, unreliable economic statistics are of no use to man nor beast!

Tuesday, March 29, 2016

Bank of England Kiboshes Buy To Lets

The Bank of England is doing its best to put the kibosh on the buy to let market.

The FT reports that the Bank is tightening lending rules. New measures to restrain the market include subjecting loans to a stress-test scenario whereby mortgage rates rise to 5.5% and more stringent affordability tests which take into account the borrowers’ costs of letting out the property – including tax liabilities.

All very well and dandy, but realistically in the extremely unlikely event that rates rise to 5.5% in the next few years, any buy to let landlord who couldn't meet the payments would simply dump the property.

Tuesday, March 22, 2016

CPI Unchanged at 0.3%

As per the ONS the Consumer Prices Index (CPI) rose by 0.3% in the year to February 2016, unchanged from January 2016.

The largest downward contribution came from the transport sector, from price changes for items such as road passenger transport, second-hand cars and bicycles.

Rising food prices, particularly for vegetables, offset this.

Whilst this appears to be all very well and good ans table, it is worth remembering tat house price inflation (excluded from the above measure of inflation) stands at 6.7%.

Thursday, March 17, 2016

"Rock Solid" Deutsche Bank Collapsing Again


Despite protestations from Deutsche Bank in February that it was rock solid, its announcement yesterday of a $7BN loss for 2015 and forecast loss for 2016 somewhat undermine that upbeat assessment.

Unsurprisingly there has been yet another collapse in its shares.

Wednesday, March 16, 2016

Follow The Budget Live - #Budget2016

Tuesday, March 15, 2016

Greek Unpaid Taxes - A Whopping Euro86BN!


Whilst the Eurozone, IMF and ECB wrangle with Greece about future bailouts, it is worth noting that one means of Greece dragging itself up out of the financial gutter is for its citizens and businesses to actually pay their taxes.

Given the above statistics this is something that simply isn't going to happen anytime soon!

Monday, March 14, 2016

Help To Save

Apparently, if media leaks are to be believed, one of the policies that the Chancellor will unveil in this Wednesday's 2016 Budget will be the Help To Save scheme.

Aimed at low paid workers, it would provide a 50% bonus to those who manage to save up to £50 a month at the end of two years.

Around 3.5m people in low paid work and receiving working tax credit or universal credit would qualify, with the maximum level of help set at £1,200.

Whilst this idea is all very well and middle class patrician, it has two significant failings:

1 People won't get their bonus until two years have passed. Unlike the middle classes, those on low pay don't have the luxury of being able to plan ahead for two years wrt what they can safely put away for a rainy day; as more often than not every day is rainy.

2 Central banks are currently obsessed with negative interest rates, designed to discourage people from saving. This policy is the diametric opposite of that.

Friday, March 11, 2016

Draghi's Failed Bazooka - The War on Cash Begins

Draghi's attempt to stimulate the markets yesterday, via the ECB lowering rates to zero and boosting QE, crashed and burned in spectacular fashion yesterday.

All gains by the markets and the Euro went into sharp reverse by the end of the day, as people sought shelter in gold.

What is left now for the ECB and Draghi to do?

The war on cash will now being in earnest:

1 Negative interest rates are coming

2 There will be depositor bail ins, and

3 Cash (starting with high denomination notes) will be abolished.

One way or another the ECB will try to take control of the people's finances, and use it for their own "best interests".

In layman's terms that is dictatorship!

Thursday, March 10, 2016

Cameron Doesn't Understand Economics

In a speech at a car plant today, Prime Minister David Cameron will point out that some Brexit advocates have acknowledged that it will entail a short-term economic shock, and argue as per Open Europe:
Let’s just remember what a shock really means. 

- It means pressure on the pound sterling. 

- It means jobs being lost. 

- It means mortgage rates might rise. 

- It means businesses closing. 
- It means hardworking people losing their livelihoods.
In my humble opinion the above scenario is highly unlikely.

Sterling may temporarily "wobble", but that wobble will be short term and cause no damage to the economy. Interest rates will not rise, because we are close to zero inflation. Consequently, mortgages will not rise.

Regarding businesses closing and jobs being lost, that is happening now. I would also refer people to the recent EU youth unemployment statistics, the EU is not a job friendly institution!

Hence Cameron's scaremongering is simply wrong!

Wednesday, March 09, 2016

Europe Isn't Working


Monday, March 07, 2016

Whither Battersea Power Station - Pigs Might Fly?


Poor old Battersea Power Station never seems to catch a break.

Long since decommissioned as a power station, the site has been left to rot for decades on the promise of hotels, theme parks and apartments being built within its skeleton.

Currently the site is being redeveloped into flats. However, the downturn in Asia Pacific's fortunes has lead to a decline in demand for the unfinished apartments.

LondonlovesBusiness reports that Battersea Power Station’s developers have slashed the prices of the apartments since January, with discounts as high as 38% on some properties.

According to property firm Propcision, since last year 197 properties in the development have been listed for resale by Battersea Power Station Estates.

According to City AM, a four bedroom townhouse on the site was listed in July last year for £6m, but was reduced to £4m in January – a decline of 38%.

Another flat on the site which originally went on sale at £850,000, is now available for £600,000.

A Battersea Power Station spokesperson said:
Some of our purchasers have decided to re sell their properties; as far as we are aware, in the first phase, only 10% have reassigned and they have enjoyed a growth of on average 30%.”
It will be interesting to see what the finished development looks like in the coming years, and the demographics of the occupancy.

Friday, March 04, 2016

Pension Fees Compensation


Another means by which claims companies will try to make money at the expense of hapless savers and pensioners!

Wednesday, March 02, 2016

The Great British Pension Raid

Good luck to those of us born after 1961, for the government intends to make us wait longer until we retire.

The younger you are now, the longer you will have to work (up to 80 for the youngest) before you receive a state pension.

Ministers have announced a radical review of the pensions regime because the current system is not "affordable in the long-term".
The review will be chaired by Sir John Cridland, the former head of the Low Pay Commission, and will assess whether the current pensions system is "affordable in the long-term".

The results of the review will be published in May 2017.

The Chancellor is also considering plans to scrap higher rate tax relief on pension contributions as part of the Budget this month and move towards a "flat rate", which could be as low as 25%.

To add to the misery of those saving for retirement, or living off savings in retirement, interest rates may well go negative in an attempt to stimulate consumption.

Good luck everyone, it's simply not worth living to old age anymore!

Tuesday, March 01, 2016