Archive for March 2010

4th Quarter GDP Better than Expected

March 31, 2010

Tuesday brought some surprising news for economists: fourth quarter growth figures were revised upwards!  Now, it seems the UK economy grew by 0.4% and what is more, this was the final revision.  Having started with a minute 0.1% , we now know that the country exited the recession faster than had been thought!

However according to another survey consumers are still worrying about the economic outlook for the country.  In March, consumer confidence fell somewhat yet the risks of a double-dip or ‘W’ shaped recovery are still not significant.

Some accused media hype surrounding Alistair Darling’s latest Budget announcement as the reason for consumer fears.  Around his announcement, much was made over Britain’s large deficit and the Chancellor’s lack of drastic plans to clear this debt quickly (he currently plans to halve it in four years).

The pound edged up on the good GDP news.

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Euro Saved by Greece Bail Package?

March 26, 2010

EU leaders have reached an agreement to help Greece with a package of €22 billion.  The country, with a vast deficit which is eating on the euro currency has, in the past months, been at the centre of EU debates.

While the currency exchange market was speculating on Greece’s future and that of some other Eurozone countries, the euro took enormous pressure.  Indeed, there were even record amounts of euro -selling from international investors, enough to make a few EU leaders call for an end to over-selling and the damage that speculation can do.

Now, Greece will receive a boost to fix its problems, but is it enough?  Currency investors certainly seemed to be mollified by the news as the euro rose by around half a cent on the news against the US dollar and by nearly half a penny against the pound.

Levy on German Banks Proposed

March 23, 2010

Germany’s government has put forward a proposal which is likely to be carried out later this year: a levy on the big banks that received bailouts towards the end of 2008 (the height of the financial crisis for those who were asleep over the last 18 months).  Around €500 billion was handed out to banks to prevent complete collapse and it was the taxpayer who bore the costs.

Now, Germany wants to prevent banks from taking more risks and wild speculation on currency exchange, shares and other financial markets.  It wants banks to lose any reliance they might have had that the state will step in and mop up the mess if another disaster should occur.

So far, other large economies have not been so hardline – the UK government has introduced a ‘super tax’ on financial sector bonuses while the US has introduced a similar plan.

Lloyds Expects Profits in 2010

March 19, 2010

Lloyds Banking Group have announced that they think they will make some good profits in 2010.  The news, which surprised the markets, sent European shares up – with banks in the lead.

Lloyds is 41% owned by the Government, since it required a big bailout in 2009 at the height of the financial crisis.  Many (including taxpayers, one might presume) are sure to be happy at the news that the banking giant is now looking set to make good profits.

Meanwhile, the currency exchange market is still unhappy about Greece.  And the UK.  Thanks to a comment from a Bank of England official, that the risk of a ‘double-dip’ is still possible for the UK economy, the pound dipped in this morning’s trade.

UK Government Rejects Deficit Cut Calls

March 16, 2010

The daggers are out in the run-up to the Budget next week.  The deficit crisis is still on everyone’s mind, with the prediction that this year alone, Britain’s deficit will reach a whopping 12.5% of GDP, very close to that of ailing Greece.

Now, the European Commission is due to complain that the UK needs to take more drastic action to cut its deficit to the target rate of 3% of GDP within the next four years.  Currently, the Labour party’s plans to cut the problem would mean that it would reach somewhere near 4.7% by 2015, slightly outside of the EU rulebook – yet they argue that if Government spending is cut too rapidly, then the economy would suffer too much.

Not surprisingly, the news has put added pressure on to the pound – apparently the market is already looking for excuses to sell the currency and the European Commission’s complaint has provided the perfect reason.

Pound Stable…for Now

March 11, 2010

The pound managed to stay flat against the US dollar and the euro in this morning’s trades, as currency exchange traders lost momentum on sterling sell-off.

However, more weakness is forecast for the pound…here are some the reasons why:

Gordon Brown VS David Cameron – no clear winner

The upcoming general election looks set to result in a ‘hung parliament’ – a situation which means no party is a clear winner over the other.

Weak UK Economy

It seems as though fresh data is announced every week, and lately much of it isn’t exactly ideal.  The most recent numbers to cause investors to avoid the pound were those showing worse-than-expected manufacturing output.

Poor Public Finances

Actually, the deficit in the UK isn’t that far off from that of Greece.  Gordon Brown has now called for civil servant pay freezes – but is it enough to stem the problem?

Personal Loans become More Expensive

March 10, 2010

According to a recent report, the cost of taking an unsecured loan has become up to 42% higher over the last two years.  Therefore, banks are not only making it harder to borrow money but they are making it more expensive too!

A lot of banks and building societies have changed the rules on unsecured loans so that only existing customers can access them.  Risk-taking is no longer in fashion, it seems!

For people who are desperate to borrow there are still alternative lenders on the market, offering fast cash loans, bad credit loans, car loans and so forth.  They are worth looking into but before taking any type of credit product it is worth thinking about whether you can actually afford it!!  This is especially the case with payday loans, which are notoriously expensive to keep up.  However, they do provide emergency funding – most lenders transfer the money to you within 24 hours.