Remortgage Deals

Having recently tried to play down the severity of the recession, the Chancellor of the Exchequer, Alistair Darling, has recently admitted that it is likely that the recession is set to last for around two years. His most recent opinion has been shared by the Business Secretary, Lord Mandleson.

Darling said that the downturn had been sharper than he had expected it to be, and is expected to cut his growth forecasts, according to reports. Even the Prime Minister, Gordon Brown, said that he had failed to foresee the financial crisis that was gripping the country, and said that there was no alternative to using taxpayers’ money to try and bail out the banking industry.

Opposition leader, David  Cameron, said that the public has now lost confidence in the government, but in a recent report Labour said: ‘The Government is clearly taking a risk with public finances. Is it a calculated risk, and a better option than passivity? This is our view.’

However, Mr Cameron has stated: ‘It is confidence that will be key to the recovery. We also have to get the Government finances under control, a proper plan for regulating the banks to make sure we have sensible policies so we get confidence back.’

Downing Street officials have recently admitted that the Chancellor of the Exchequer, Alistair Darling, was too optimistic when he recently predicted that the UK economy could start recovering as early on as the middle of this year. Downing Street has now said that this was the government’s best view at the time the statement was made.

Darling made the statement towards the end of last year, claiming that the economic downturn could be over within as little as eight months. Many economists were very sceptical upon hearing the Chancellor’s speech, and since this time the Prime Minister, Gordon Brown, and the Business Secretary, Lord Mandelson, have both indicated that the recession and downturn could be a long and painful one.

A spokesperson for the Prime Minister said recently: ‘The Treasury have to set out their best view, which was their best view at the time of the PBR. It was a view that was very much in line with the view taken by the Bank of England. But they also acknowledge that there is obviously uncertainty around any forecast.’

Gordon Brown was recently asked whether the recession could last as long as two years, and he replied: ‘I think that depends on the level of international co-operation.’ He added: ‘If we spend a pound in Britain, it can have twice the effect if other countries are doing the same.’

Prime Minister, Gordon Brown, and chancellor, Alistair Darling, have recently indicated that whilst it is not being considered as a main option there is a chance that they may consider ploughing billions of pounds more into the banking system from the public purse. The government has already ploughed £37 billion of taxpayer’s money into banks last year, and may end up putting billions more in.

Mr Brown said that the previous cash injection given to banks had been primarily to save the banking system from collapse. He stated: ‘I don’t think you can judge the success of recapitalisation by what happened in one month. I think you’ve got to judge it as a necessary means in which by saving the banks - and saving is the right word - we restore the ability for them to fund businesses and mortgages, and that will happen over the next period of time.’

The Shadow Chancellor, George Osborne, stated: ‘If the Government has to revisit bank recapitalisation then it will be a stunning admission that their whole approach to the recession isn’t working. Gordon Brown’s recession policies are becoming an expensive failure.’ Vince Cable from the Liberal Democrats added: ‘We cannot have a situation where the taxpayer makes open ended financial commitments to the banking system when the banks then wilfully put their own short-term self interests ahead of the national economy.’

However, Alistair Darling stated: ‘When I announced our original plans in October, I said it would be necessary for us to continue to take whatever measures were necessary to ensure that we get lending in the system.’

All sorts of industry groups and government officials, including the Governor of the Bank of England, Mervyn King, and the Chancellor of the Exchequer, Alistair Darling, have warned that consumers in Britain have a very tough time ahead of them in terms of their finances. Household finances amongst families in the UK have been seriously compromised due to a wide variety of rising costs, and this has left many really struggling to make ends meet.

Things were bad enough when the interest rate kept going up between August 2006 and July 2007, which left many homeowners struggling to keep on top of mortgage repayments. However, whilst the interest rate did start to come down towards the end of last year household finances were hit with a myriad of other rising costs, which counteracted any positive effect from the rate cuts. This included soaring energy costs, with energy firms now having hiked up prices twice this year alone, rising water costs, soaring food bills, and rocketing petrol prices.

This is why it has become more important than ever for households to try and reduce their outgoings and make their money really work for them, as many could otherwise find themselves being tipped over the financial edge. Whilst it can be difficult to find ways to reduce the amount that you are paying out each month there are some hints and tips that could help you to save money, and it is worth implementing any that could help you to make savings, no matter how small the saving may appear to be. It is important to remember that every little helps, and with a few simple changes you could find that the savings start to add up.

• Cut back on the cost of your water bills: Like other bills water rates have gone up recently, and some families could find that they are paying over the odds for their water. You may find that a water meter is a far better option and works out far cheaper, especially for smaller households that do not use as much water. Do a little research to see whether you could save money on the cost of your water.

• Look at alternative energy providers: All of the big six energy providers have now hiked up their gas and electricity prices for the second time this year, and many households have seen their monthly bills rocket. It is well worth using one of the various price comparison sites in operation to see whether there is another provider that covers your area and could provide you with cheaper energy bills.

• How often do you use your mobile? Many people have a contract mobile phone even though they do not use the phone very often. If you contract is coming to an end and you do not really use the phone all that much you should consider whether it may work out cheaper to opt for pay as you go rather than paying for a contract.

• Do you need to make calls on your landline? Many mobile phone deals offer hundreds of free minutes, and a large number of people use their mobiles in place of their landlines as a result of this. Consider whether you actually need a landline, as it may be pointless if you make and receive all of your calls on your mobile. Or you could consider having a landline for incoming calls only so that you are not tempted to use the phone to make calls.

• Shop around for home insurance: It is important to have home insurance in place but it is also important to ensure that you are not paying over the odds for your cover. Do a little research and compare home insurance deals from a range of providers to see if you can get the same level of cover for a much cheaper price – you will be surprised by how much the cost of cover can vary.

• Try and cut the cost of your broadband bundle: If you are one of the many households that has a broadband, television, and landline bundle you may find that there are savings to be made here. Check out the broadband speed and television package that you have and consider whether you actually need the speeds and channels that you are paying for. If not, then consider dropping down to a lower speed and a more basic television package to cut your bills.

• Shop around for your shopping! These days the discount stores such as Aldi and Lidl offer a greater choice of products often at far cheaper prices than the major supermarkets. See if you can get into the habit of getting as much of your shopping as possible from these discount stores, and then getting the remainder from the larger supermarkets.

UK customers who had savings with the collapsed Icelandic bank, Icesave, have been told by the government that they will receive a 100% guarantee on any savings that they had in that bank. Officials have said that the Icelandic government has refused to guarantee the money of UK savers and has frozen their assets.

At present the safety net for 100% guarantee on savings stands at £50,000 in the UK following a recent increase in the threshold from £35,000. However, this will not apply to Icesave customers, who will receive a guarantee on all of their savings so that nobody loses out. A Treasury official said: “We guarantee that no depositor will lose any money as a result of the closure of Icesave.”

Chancellor, Alistair Darling, said: “The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here. Because this is a branch of a foreign bank the first call would be on the Icelandic compensation scheme which, as far as I can see, hasn’t got any money in it. The British scheme would top that up to £50,000, but people over and above that would lose out.”

The Prime Minister of Iceland said that the Icelandic government would do all possible to help raise funds to assist with compensation. He said: “The government of Iceland is determined not to let the current financial crisis overshadow the long-standing friendship between Iceland and the UK.”