Financial Favourites

Worrying news from the BBC:

Bad credit card debts may reach as much as 9% of all outstanding balances by the end of next year, an accountancy firm has said.

“Bad debts in the sector have reached historic highs,” according to PricewaterhouseCoopers (PwC). The figure stands at about 6% now.

This comes despite a “cooling passion” for credit cards, with borrowing down 3% to £64bn in the past year.

The number of credit cards in circulation has fallen by 8%, it said.

Full article: http://news.bbc.co.uk/1/hi/business/8349153.stm

According to a BBC News report:

UK house prices were higher year-on-year in October – the first annual rise for 19 months, the Nationwide has said.

Property prices were 2% higher in October than in the same month the previous year, with the average home costing £162,038.

But the pace of monthly price rises has eased – going up by 0.4% – and the building society said that values could level out in the autumn months.

This could be due to more sellers returning to the market, it said.

Full story – http://news.bbc.co.uk/1/hi/business/8332861.stm

Another report on the economy from BBC News:

A leading think-tank is predicting it may take another five years for income per head to return to the level it was before the recession hit in early 2008.

The National Institute of Economic and Social Research (NIESR) sees total UK GDP falling 4.3% in 2009 before growing 1% in 2010 and 1.8% in 2011.

This echoes earlier NIESR forecasts but suggests a slower rate of recovery.

NIESR expects government borrowing to hit £165.7bn this year, less than the £175bn the government predicts.

The research body sees income per head – GDP per capita – taking until March 2014 to return to the level it was in the first quarter of 2008, when the recession kicked in.

Full Story

BBC News reports:

UK public sector borrowing in June was almost twice as much as a year ago, after the downturn shrank tax receipts.

Borrowing reached £13bn – a record high for the month of June – compared with £7.5bn in June 2008, the Office for National Statistics (ONS) said.

Total outstanding government debt rose to £799bn, or 56.6% of UK GDP – the highest since records began in 1974.