Banks write-off £40m a day in personal debts
Posted on August 31st, 2010
Banks and building societies were writing off almost £40m per day in family debts in the second quarter of the year, according to new figures.
A report from the Bank of England found that lenders wrote off as much as £3.5bn of debt between April and June, equivalent to £38.5million per day, the largest amount on record for a single quarter.
Credit card debts accounted for the largest proportion of that figure, with lenders writing-off £2.1bn of debt that they do not expect to see repaid. £1.2bn of the figure was attributed to overdrafts, personal loans and hire purchases whilst just £184m were written-off mortgage debts.
“In a recession, it is inevitable there will be write-offs as a result of people`s financial circumstances changing,” said a spokesman for the British Bankers` Association.
Debts called in by parents
Posted on August 27th, 2010
According to research, `the bank of Mum and Dad` is now calling in its debts – as parents ask for larger amounts of money back from their children, The Telegraph reports.
The findings revealed that one in 10 grown-up children either gave or lent, on average, 8,250 to their parents last year. This figure is 1,750 higher than it was in 2008.
More than one third of parents admitted to using the money they received from their children to repay their own debts, while a similar amount used the money to cover their everyday expenses.
A spokesperson for Debt Advisers Direct commented: “We would advise anyone struggling to afford their day-to-day living costs and/or their debt repayments after the recession to seek professional debt advice. Read more…
Think Tank Warns On 8% Interest Rates
Posted on August 22nd, 2010
A think tank has warned that interest rates could rise to as much as 8% if inflation continues to exceed the Bank of England’s 2% target.
Andrew Lilico, chief economist at the Policy Exchange, said the Bank of England may be forced to dramatically hike the base rate due to rapidly rising inflation.
Dr Lilico thinks the UK is likely to suffer from a double dip recession, followed by a boom, driven by huge monetary growth, leading to the strongest economic growth since the 1980s.
“Once the economy gets growing sustainably, there will be a huge expansion in the money supply, which will lead to inflation,” he said in a research note.
The Bank of England has pumped £200 billion into the economy through quantitative easing.
But Dr Lilico warned that this policy had quadrupled the money base, and he claimed that once the economy starts growing again, lending will expand and there will be “too much money chasing too few goods”. This
Teenagers `scared of debt`
Posted on August 18th, 2010
Nearly two thirds of teenagers are `scared` of debt, according to a survey for discount website MyVoucherCodes.co.uk.
Fully 64% of 1,482 teenagers (aged 14-17) questioned said that they`re actually scared of debt. 53% said they don`t trust lenders.
21% said that they didn`t plan to take out a loan or have a credit card – ever. Of the people who didn`t want to take out a loan, 89% added that a mortgage was the only kind of debt they`d ever consider taking on.
Asked about their attitude to debt, 13% said they didn`t want to end up in the same situation as their parents. Read more…